With the gaining popularity of vacation rental traveling, listing an extra room in your house, or listing your entire home is a great way to earn extra money with minimal effort.
It's no surprise that...
the vacation rental space has become very competitive, and so finding the right platform for your needs can be challenging.
What are the advantages and disadvantages of some of the major platforms?
How can you maximize your returns while maintaining peace of mind?
We're comparing the size, exposure, price structure, and additional perks of dominant players in the space to help you choose the best platform for your needs and expectations.
Let's get started!
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Size vs Exposure
The size of the platform that will host your listing(s) is very important. More page visitors and increased exposure generally leads to more bookings and more revenue for you. In addition to the number of views you receive, audience quality and intention are also crucial factors.
Did you know?
Booking.com is the #1 visited and widest used listing site in the travel space. The platform is a worldwide giant with over 29 million total reported listings, in 229 countries and territories, available in over 40 languages.
Booking.com has a historical reputation as a site for booking hotels, though the company also has a substantial presence in the vacation rental space. In fact, with 5 million homes, apartments, and other unique lodgings listed, Booking.com beats Airbnb in size. Each day, more than 1.5 million room nights are reserved at Booking.com, which places this platform on top of our list in terms of the potential exposure you'll get.
Airbnb, on the other hand, is the company that brought short-term vacation rentals to the mainstream and made home-sharing popular for travelers, especially in urban destinations. At only 10-years-old, Airbnb has built a presence in over 190 countries and is worth over $30 billion today. Airbnb is a community-driven super-brand, delivering the messages of “Live Like A Local”, “Belong Anywhere”, and “Airbnb Is Built On Trust” across all channels. For millennials, their choice for a vacation rental is Airbnb and they are the generation that takes more business trips than any other generation (Learn more about Millennials and the changing face of the vacation rental industry here).
Despite having a smaller footprint than Booking.com...
Airbnb isn’t exactly tiny, and Airbnb's community model has a targeted audience of travelers who look almost exclusively for vacation rentals when they travel and value the perception of Airbnb as a trust-based marketplace. Airbnb is now expanding to allow hotels to list on its platform, so expect dynamics to evolve here.
Wait, there’s more.
Home Away is another big player in the space and is part of a bigger network. Home Away is the parent to many companies as VRBO, Owners Direct, Homelidays, VacationRentals.com.
The HomeAway family, a suite of 50 international sites in the vacation rental space, is owned by Expedia and has a significant global presence, with over 1 million listings in more than 190 countries. If you host on HomeAway, you can expect to appear in Expedia search results soon, which will definitely get your space increased exposure.
Although not as dominant in the vacation rental space as the three players above...
TripAdvisor merits an honorable mention. With more than 800,000 vacation rental properties listed in over 190 countries, TripAdvisor remains a force to be reckoned with. Similar to Expedia and Booking.com, TripAdvisor automatically translates any property listings to appear on its 26 sister sites including FlipKey, House Trip, Holiday Lettings and Niumba.
We've talked about getting more people to see your listing in order to book.
Now let's focus on getting the most revenue out of each booking. In other words, maximizing bookings and earnings, while paying the as little as possible in channel fees to your chosen platform(s). Each company has its own pricing structure, and there's a wave of new startups that avoid all fees to make their service free for travelers and/or hosts.
Here's the breakdown from the majors:
Charges percentage-based fees per booking; 3% fee for hosts, and a 5-15% fee for guests. This commission structure is certainly host-friendly, but keep in mind, whatever price you list at, your guests will see that price marked up when they go to book. If you aim too high, you run the risk of driving down conversions.
Charges a percentage-based fee on each booking; a 15% fee for hosts (ouch!) and no fee for guests (wohoo!). If you're wondering, this pricing structure comes from Booking.com’s hotel DNA. 15% to the host may sound like a lot, but because guests pay no additional fees, guests tend to think of Booking.com as a guest-friendly platform. As a result, by listing on Booking.com, you stand to increase your earnings through more bookings.
Which was acquired by Tripadvisor in 2008, has the same host fee as Airbnb does, but a higher guest fee. Hosts pay 3% fee per booking, and guests pay 8-16% fee per booking. With higher fees and less visibility, FlipKey is not our first choice. If you decide to list on more than one channel, however, there’s no harm in adding FlipKey as a hedge to the more dominant listing sites.
Does things a little differently. As a host, you have two options to pay; pay-per-booking (8% fee), or an annual subscription of $499 (up from $399 last year). This might be a good option if you're listing year-long rentals and plan to make over $7,000 from this. Guests pay 6-12% fee per booking.
BE AWARE OF THE ADDITIONAL FEES!
Note that HomeAway and Booking.com charge a 3% credit card fee if you use their payment processors (you can also use an external processor like Stripe for 2.7% + 30¢ per transaction if you want more control), whereas Airbnb and Flipkey don't. On some of these platforms, you may be subject to additional fees and taxes that you have to pay as a host based on varying city/state/country regulations. If we tried to record them all here and keep them updated, we’d be working on this article every day.
LOOKING FOR NO-FEE?
There are dozens of small niche vacation rental platforms with the value prop of making their service completely free to one side of the marketplace, or (although rarely), to both.
Here are a few:
1) No Guest Fee
Bring Fido (everything for you and your dog)
Vacationstayz (they have around 20,000 destinations)
Owner Direct (founded in 1994)
2) No Host Fee
Agoda (a part of The Priceline Group)
TravelStaytion (exposure to 25,000+ travelers)
3) Free For-All
Lastly we'll discuss...
Programs and Perks
Now hopefully you have an idea of which platform(s) you feel warmer towards.
Here is the last important criteria that we'd like to share.
Say you've joined one or multiple platforms. What more can these platforms offer you to help your place stand out?
We explored several aspects beyond just hosting that can help boost your listing based on what the big players in the space do. With your exposure and pricing figured out, let's talk about being the chosen one.
1) Gain The Title
On Airbnb, if you have an average star rating of at least 4.8+, if you reply to most messages within 24 hours, and if you don't cancel bookings and host at least 10 stays each year, congratulations, you’ll become a SuperHost! The SuperHost title gives your listing(s) a competitive advantage in that your listing will be prioritized in search results. Plus, the SuperHost badge affixed to your listing and profile on Airbnb gives prospective guests additional peace of mind. They know they’re booking with an expert host, so as a SuperHost, you can generally expect to see more bookings. Airbnb has over 400,000 SuperHosts, and they estimate that Super Hosts earn 22% more revenue than other hosts.
Booking.com has the Preferred Partner Programme. Hosts (partners) who qualify for this programme get an average of 65% more page views and 35% more bookings than others. Preferred Partners play slightly more in commission.
The HomeAway family has a smiliar program that they call Premier Partners. This title is also gained by quick responses, few cancellations, detailed photos and descriptions, top notch stars, and more.
2) Work even less
As an added benefit, Airbnb launched a co-hosting product. If want to be a host without the hassle, you can hire your neighbor or another local host to take care of your listing. While other platforms don't have such an option, you can use short term rental management companies to run your listing(s) for a fee or for a percentage of each booking.
3) A Strong Support System
Most major platforms have an online center where hosts can exchange information, learn, start conversations, and even meet each other. Booking.com hosts (partners) are connected through Partner Help, Airbnb's hosts are connected through the Airbnb Community Center, and Home Away hosts can connect through the HomeAway Community.
What's your conclusion?
Every platform has its advantages and disadvantages. Your choice will be different based on whether you're prioritizing getting your rooms filled up, paying the least amount of fees, or getting great service and support. Once you decide and list your place(s), congrats on your first step to becoming a host!
Learn the operations and logistics of being a consistently 5-star host, consistently.
One tip from us: when travelers arrive early or ask to check out late, offer them convenient places to store their luggage with Knock Knock City luggage storage to let your guests enjoy their days to the fullest!