Category Archives: Vacation Rental Industry

Expedia Owned HomeAway Driving Customers Away?

In December 2015, Expedia bought HomeAway / VRBO for a reported $3.9 billion dollars. Its been just over a year now, and customers are growing in frustration according to a variety of sources, as they appear to be copying Airbnb’s commission model by applying guest and service fees.

Kim Bergstrom writes a great article explaining what is happening with VRBO, HomeAway, Airbnb, FlipKey, TripAdvisor and Expedia Service Fees.

GeekWire also has an excellent article explaining how VRBO/HomeAway now stacks up and competes against Airbnb. An excerpt sums it up well:

One of the biggest changes is the introduction of a traveler’s fee — also referred to as a “service fee.” Travelers who book through the HomeAway checkout process are now charged a fee that averages between 4 percent and 9 percent of the rental amount, not exceeding $499, the company says. Airbnb charges a similar fee.

How Much Does Airbnb Charge?

The exact commission rates both the rental owner and guest pays to Airbnb is becoming more nebulous, we will try to break it down here, for approximately what the rates are as of 2017:

Here are quotes taken from the Airbnb website pertaining to fees and commissions, and our opinion on what it means.

Guest Service Fee:

Many guests are unaware they are being charged a fee just to book a rental unit using Airbnb. This fee does not go to the rental owner/manager, it goes to Airbnb. If one had to guess at what the average rate is, given the information provided, I think it is reasonable to speculate it at 10%.

“To help cover the costs of running Airbnb, we charge guests a service fee every time a reservation is confirmed. The amount of this service fee varies and is based on a percentage of the reservation subtotal (before fees and taxes).”

“The exact amount of the service fee is displayed before guests confirm a booking. Guest service fees are typically 6-12% but can be higher or lower depending on the specifics of the reservation.”

Host Service Fee:

Not only does the guest pay a fee, but also, so does the host, the rental unit owner/manager. Here is what they say about the Airbnb Host Service Fee:

“To help cover the costs of processing guest payments, we charge hosts a service fee every time a reservation is completed. The amount of this service fee is calculated from the reservation subtotal (before fees and taxes).”.

They do not list a range for what this fee is, they simply say to visit your account transaction history, and check how much was actually taken out.

I did one booking using Airbnb, rented a room, and as a host, I was charged just over a 3% commission, it seems they rounded up to the nearest dollar.

A 3% fee is not bad, so why not just publish that they charge a 3% fee? We will speculate, that the more bookings a host gets using Airbnb, the more this fee will increase. Hosts are less likely to complain about higher fees the more they make. If anyone has information confirming or conflicting with this guess, please let us know?

Therefore, we will speculate this fee is averaged out to be around 5%. But wait, there’s more:

VAT Fee:

Certain cities, countries and regions will be charged VAT fee’s. Sometimes both the host and the guest are charged.

“Airbnb charges VAT on its service fees for customers from the Albania, European Union, Iceland, New Zealand, Norway, South Africa, and Switzerland. In Japan, JCT applies to the hosts and the guests. Airbnb is also required to collect VAT on its services fees from all users who contract with Airbnb China.”

We won’t speculate on this number, as it is too variable, and it does not appear that any of it goes towards Airbnb’s business. But my guess is, if they are charging a VAT fee, if it pertains to your country, then probably both the guest service and host service fee’s will go up to account for the extra transaction work.


We think a total fee of 15% per booking, paid by both guest and owner, is a pretty fair estimate of how much Airbnb charges. So essentially, if you book a 7 night stay at a rental costing $285 per night, you pay a total of $2000 for that stay… approximately $300 of that transaction will go to Airbnb.




Vacation Rental Founder’s Net Worth

Brian Chesky, co-founder of Airbnb is valued to be worth $3,300,000,000 according to Wikipedia. Joe Gebbia, the other co-founder is estimated to be worth $1,900,000,000. Airbnb was founded in late 2007.

Brian H. Sharples, founder of HomeAway and VRBO doesn’t have a billion dollar net worth, its more in the $30,000,000 range, but he does pull down a cool $6,000,000 a year in salary and bonus’s by some estimates, was founded in February 2005.

Jeffrey Hock, CEO of, the leading free vacation rental platform founded in 2004, congratulates the late-coming vacation rental platform founders for their success.

That said, since Free-Rentals is not a publically traded company, Mr. Jeffrey Hock is under no obligation to disclose his net worth.

Yet, one brave investigative journalist managed to obtain a photograph Mr. Hock’s walk-in-closet while lost in the South wing of his mansion looking for a bathroom. This picture is the only known indication of the Free-Rentals founders net worth. Godspeed Mr. Hock.


HomeAway VRBO Alternative?

HomeAway owned VRBO has hit an all time low in customer satisfaction. Consumer Affairs website has given VRBO a 1 star rating, which is the lowest they can go. Customers are certainly not happy, and it shows if you read through the 850 or so reviews. Sitejabber users posted 450 reviews gives both HomeAway and VRBO just 1.5 stars.

Here is a sample of some of the reviews…

This reminds me of the time Netflix tried to raise their prices for mail-in and streaming subscribers. I completely agree with everyone else’s comments on this site… Really, It’s just a terrible business decision from VRBO.

Just awful and THEY PUT YOU AT THE BACK OF THE SEARCH LIST IF YOU DO NOT GO WITH THEIR PLANS, and now that I have signed up, I have not gotten one inquiry and it is over a month. I paid in excess of $2000 for my two homes for 2016 and feel I have just been **.

I join the masses of owners who have expressed their concerns over changes in Homeaway/VRBO. I am happy to see I am not the only one that is saying “What the hell is going on”. I have been happy for 6 years and now went from happy to zero with them. Just got off the phone with them, so far EVERYTHING they told me is not true.

The February 2016 traveler fee is a disingenuous move on the part of HomeAway thus making potential clients suspicious of property owners, creating a loss of business for property owners because it increases the rate by a significant percentage.

Clearly, sentiment has turned sharply negative in the past 6 months, and it will be interesting to see if HomeAway / VRBO can pull out of their nosedive and regain the trust of their core customers.

For those seeking an alternative to VRBO, check out is 100% FREE! No yearly fees, No commissions, No hidden costs.

Airbnb Revenues Exceed All Major Hotels

Now that Airbnb raised $100 million in new funding, and its valuation at twenty five and a half billion dollars, Marriott International has countered by purchasing Starwood Hotels for $12.2 Billon USD. The Priceline Group made its move by claiming to have listed 21 million rooms for rent.

According to Skift:

“Airbnb’s reported third quarter room nights sold (23.8 million), gross bookings ($2.2 billion), market cap ($25.5 billion) and revenue ($340 million) with major online travel agencies as well as TripAdvisor and HomeAway.

Airbnb’s $340 million in third quarter revenue has left HomeAway, which is being acquired by Expedia Inc. for $3.9 billion, far behind at $130.7 million in revenue. As with comparing Airbnb to hotel chains, gauging Airbnb (largely urban rentals of primary residences) against HomeAway (mostly vacation home rentals in resort areas) is choppy, at best.

Still, despite its projected 2015 operating losses, Airbnb’s revenue picture and traction is clearly on the upswing.”

Company Valuation/Market Cap Q3 Revenue
Marriott International $18.59B $3.6B
Hilton Worldwide $23.2B $2.9B
Accor Hotels $10.2B $1.58B
Wyndham $8.9B $1.56B
Starwood Hotels $12.4B $1.4B
Hyatt Hotels $6.9B $1.B
Airbnb $25.5B $340M
Choice Hotels $2.9B $241.5M

Source: Wall Street Journal, public documents

How To Choose A Vacation Rental Service

otaloThere are literally thousands of vacation rental listing websites to choose from online either when seeking accommodations or having a room you want to rent out short term. But which of these websites is best for you to use as a guest? which is best to list your room as a host?

Aggregate directory of vacation rental listings Otalo has as excellent comprehensive overview of most of the top vacation rental websites, and facts and stats about each.

Holiday Rentals Search Engines

hometogoA new player has come to the seen with a metadata search engine for the holiday rental industry. They are a Berlin based start-up called, and they just raised €6 million in Series A funding from DN capital and Acton Capital Partners, which is in addition to the €2 million previously raised from various angel investors.

HomeToGo claims to be the biggest metasearch engine for holiday rentals, aggregating from over 150 rental websites and listing more than 2.7 million vacation rental units. But they have existing completion from with 2.5 million units, with 1.8m units, and with 416,000 units.

Comparison of Vacation Rental Sites

Here is a list of worldwide vacation rental websites and the fees and commissions they charge.

Website Guest Fee Host Fee Listing Fee 6 – 12% 3% Free 0% 10% $1 (TripAdvisor) 0% – 10% 3% $0 – $299 Free Free Free ?? 10% – 20% Free
PerfectPlaces 0% 0% $119.95 0% 0% $148 – $248
Roomorama 8 – 12% 0% Free 10% 3% Free 0% 0 – 2.5% $349 – $999
    Travelmob 0% 0% $98
Wimdu 12% 3% Free