Lately, the short-term rental market has experienced a significant boom in interest, popularity, and sales. At the forefront of this trend, is the well-known travel-tech company, Airbnb. Analysts project that Airbnb’s annual revenue for the year will be close to $3.6B. So, some other popular travel companies have now become Airbnb’s competitors by proposing sites like Airbnb. This thriving industry may reach a market value of $36.6B in the United States by the end of this year. Statistics like these make the competition fierce.
You don’t have to pay to list your rental property on their site because Airbnb uses a pay-per-booking model. When your property gets booked, you pay a 3% fee of the total price paid by the guest.
Airbnb’s low booking fees provide hosts an inexpensive short-term rental platform. Furthermore, they offer many listing options to property owners. For instance, a host can list a shared room, a private room, the entire home, a campsite, a tree house, or RV.
HomeAway and VRBO are online accommodation platforms that compete with Airbnb. Since HomeAway acquired VRBO in 2006, the two companies share the same listings. Unlike Airbnb, these companies only offer private vacation homes. So, you won’t find shared spaces listed on either site. Hosts can buy an annual subscription plan, or select the pay-per-booking option. The cost of the annual subscription is $499. Also, a 3% credit card processing fee applies to all bookings. Under the pay-per-booking model, the commission fee starts at 8%. This includes the 3% cc processing fee percentage.
Example (annual subscription model):
Example (pay-per-booking model):
Hosts who list their property 6 weeks or more, and earn $10,000 in revenue, should opt for the annual subscription. The pay-per-booking option is best for hots who don’t meet these criteria.
HomeAway and VRBO statistics:
TripAdvisor, the largest travel research company in the world acquired FlipKey during 2008. Like Airbnb, TripAdvisor and FlipKey use the pay-per-booking model and for the same rate of 3%. Powered by a loyal audience of reviewers and review readers, this website like Airbnb joins a vacation rental marketplace with their owned review data.
Because of TripAdvisor and FlipKey’s low booking fees, they are also very affordable. In contrast, they charge vacationers a premium – more than any of the sites compared here.
TripAdvisor and FlipKey statistics:
Booking.com has the most users and listings than any other vacation rental platform. On the same note, they also charge the highest booking fee than any other competitor. Hosts who list their rental with Booking.com pay a 3% credit card processing fee* as well as a 15% booking fee.
*The credit card processing fee represents payment for a secure merchant account.
Usually, it’s for VRP or Square, and that service generally charges a 3% fee. Airbnb’s competitor does charge a large booking fee. But, they’re the only site not to charge any fees to travelers. This offers guests a huge incentive to book a vacation home on the site.
The total number of listings proves how competitive the short-term rental market is. So, some hosts decide to list their properties on all these listing sites to increase their exposure. Yet, this strategy can lead to double bookings, if not timely managed. The vacation rental market can be lucrative for some hosts. But, there always remains the issue of the occupancy rate. There is no guarantee your listing will achieve your desired occupancy levels.
While not a vacation rental marketplace like the three Airbnb competitors above, Blueground is an alternative to property owners looking to use their rental as a source of passive income. The Blueground model offers much more predictability thanks to being the primary tenant. The property tech startup takes over empty apartments in six US cities, Istanbul, Dubai and Athens while equipping the spaces with premium furniture and marketing the properties to senior business executives. We not only find renters, but we also manage, maintain, and clean your property.
Landlords who don’t have the time and resources to dedicate to being an Airbnb host often use Blueground as a solution. Other property factors include having an unfurnished space, a very large property portfolio that needs outsourcing or if the property is located in a highly-regulated vacation rental market.
Our Channel Management team also utilizes Airbnb and other major classifieds sites to gain maximum exposure for your property all while coordinating availability up to the minute.