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Owners and tenants beware: Airbnb vs. Vrbo

Navigating the differences between Vrbo and Airbnb can be confusing for both guests and owners. O...

Navigating the differences between Vrbo and Airbnb can be confusing for both guests and owners.

Often owners will list their property on both sites and if the two platforms are not analyzed, guests can unknowingly pay more for a property on one site compared to the other.

Conversely, owners will realize less net proceeds from their bookings unless they understand the numbers and structure their listings to account for those differences.

Learning curves

We’ve just completed an out-of-province rental project and it took time to accurately determine the differences.

Neither platform makes it easy to make that comparison.

We found Vrbo was charging us a fee of eight per cent and then discovered that by submitting a $500 annual payment, that was reduced to only a three per cent credit card processing fee.

That is an option that might not be offered in the near future, so it might be advisable to subscribe now.

As most owners who are listing the same property on both sites would have a desire to achieve similar net proceeds, a guest will find that they will pay less on Vrbo.

In some cases, a platform will automatically collect a tax, and in some cases it’s necessary for the owner to log in and program the applicable options to cover their tax requirements.

Comparing the tax expenses

Both parties will find the following table I put together helpful to determine those differences (this table is applicable to British Columbia; taxes in other jurisdictions will vary):

Airbnb Vrbo
Fee Guest Pays 15% 8.7%
Fee Owner Pays 3% 8% (or pay $500 fee then 3%)
8% Provincial Tax 8% 8%
3% MRDT 3% 3%
7-day Booking Discount 10% 10%
8% Prov. Tax on Clean Fee $575 x 8% $575 x 8%
3% Prov. Tax on Clean Fee $575 x 3% $575 x 3%
Clean Fee (example amount only) $575 $575
GST Does not Collect 5% Collects for Owner
Rebate Paid to Owner 4.5% 0%

It’s also worth noting that despite the hefty cost of Airbnb, it does not provide any live telephone support. Any questions have to be filtered through a cumbersome email process.

Unless an owner invests time analyzing their after-tax proceeds in each case, there could be a pretty big surprise at the end of the year.

The difference between the two daily base rates needs to be established by the owner.

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