Following up on our blog post from last year, I just wanted to update our comparison chart when it comes to booking sites like VRBO and AirBnB.
What many travelers don’t realize is that booking through these sites add SIGNIFICANT amounts to their vacations. By booking directly with the owner, you can save THOUSANDS of dollars. AirBnB quotes “service fees” of 12.9% on my listings. That means for your $3,000 rental, you are paying a $387 service fee! VRBO does the same thing. Their service fee is between 6-12% “for most bookings but can be above or below, based on the reservation”. So, they can charge you whatever they want and the fee is dynamic so one day it may be 7% and the same rental booked the next day could be 11%. At least on more expensive rentals they cap their fee at $499. AirBnB has no such cap. I’ve seen them quote fees of over $900! That means on your “$3,000” family vacation can easily turn into a $3,400 vacation once they hit you with their “service charge”. Some sites, like Trip Advisor and Booking.com charge even more, though some of them are built into the rental price and you don’t even see them.
Speaking of fees, travelers aren’t the only ones paying fees. Owners are paying a 3% processing fee to both VRBO and AirBnB. For owners on VRBO who aren’t on their annual subscription plan, they charge owners 5% on any bookings. What that means is that owners have to mark up their rates 3% to 8% to cover these added costs.
And that’s not the only difference. With the change in New Jersey’s occupancy tax laws in August, 2019, owners who book directly with their guests are now EXEMPT from charging the state’s 11.625% Sales and Occupancy taxes! Think about that….3-8% markup…..7-13% service fees….and 11.625% in taxes. Travelers are paying more for the same house…. in some cases up to 28% more!!!
What are you getting for your money? Well, added to their annoying marketing email list for one! But what else are those service fees getting you? The major listing sites love to talk about their “Million dollar guarantees” and warning of fake owners with fraudulent listings. But the reality is, in this day and age it is very easy to identify the true owner of a property. Simply go to the county’s website and look up the property address in the tax records and you will see the name and address of the owner. VRBO and AirBnB don’t even bother with this simple verification. Besides, if you are using the same credit card to book directly, your credit card company affords you the same guarantees. You don’t need to pay an extra $500-900!
Want to see what the comparison is like for our Summer rentals? Just take a look at this chart we put together…