If you’ve been looking into hosting your own stay, you’ve likely started combing the internet for how-tos and best ways to this that and everything in between. You’ve also probably seen the words Airbnb, STR, Vrbo, and vacation rental used all over the place, and sometimes interchangeably. But why? What exactly do they mean? Are they different or the same? Anyone new to the industry is understandably confused, but don’t worry we’re about to clear the air and break it down.
What is an STR?
An STR or a short-term rental is typically a furnished apartment, condo, or house that is rented for short periods of time usually for days, weeks, and even months but under 6 months in duration usually to be considered short-term. Growing in popularity amongst travelers for quite some time now short-term rentals (STRs) have served as an alternative to hotels for their at-home feel and the lower price point they often carry. They’ve also served as an opportunity for hosts to earn passive income on the side, aiding in making ends meet, providing for living and/or retirement expenses, and additional income to spend as they please.
If you’ve got a property and are thinking of turning it into a short-term rental, we’d love to help you optimize your experience! Learn the must knows before you get started or chat with us today!
How is an STR different from a traditional rental?
Traditional rentals are those rented for longer periods of time beyond what was classified as short, typically around a year or longer. Traditional rentals offer a stable income for those renting them out, however, their properties usually see more wear and tear and therefore more depreciation than short-term rentals where the owners are able to check in more frequently and hold their renters more accountable for any kind of damages. The income potential for short-term rentals varies, but it’s in this variation that the possibility and probability of greater returns lay, not to mention owners can get access to their property any time they want by simply blacking out any days they wish to return.
What is a Vacation rental?
A vacation rental can and is used interchangeably with short-term rental (STR) because they are in fact the same thing, just another way of describing each other. These stays are rented for a short duration of time and are typically a furnished apartment, condo, or house as mentioned before. Although referred to as “vacation” rentals those who rent these places are not always on vacation, the intent of the trip doesn’t impact or change the way you’d refer to the place.
What is an Airbnb?
Airbnb is a company with an online platform where hosts can list their stays and travelers can book. Utilizing site and app, the Airbnb group has the largest amount of listings and is the most popular amongst other similar services. They’ve become the Kleenex of tissue being used interchangeably with any short-term rental property. Any stay on the Airbnb site is referred to as an Airbnb. However, not all short-term rentals are Airbnbs, as in not all short-term rentals are offered through the Airbnb site. This brings us to our next word, Vrbo.
What is Vrbo?
Vrbo is another company with an online marketplace for short-term rentals (STRs). Vrbo, an acronym standing for Vacation Rentals By Owner, and pronounced “VER-bo” is the second most popular listing and booking site for short-term/vacation rentals. Usually offering typical family stays, large vacation homes, and entire places (versus shared spaces additionally offered through Airbnb).
Airbnb and Vrbo are not the only sites that offer these kinds of stays however, they just so happen to be the most well-known and utilized. Booking.com, TripAdvisor, Expedia, HomeToGo, Tripping, FlipKey, and Vacasa are just some of the sites that offer similar services for hosts and renters.
Airbnb vs Vrbo
Although they have virtually the same business idea there are several key differences between these two platforms to consider whether you’re a host or a renter. We’ve outlined a few of the more important ones below:
- Service fees
- Cancelation Policies
- Reviews and Audience
Services Fees
Guests to Airbnb stays can expect to pay roughly 14% of their subtotal in service fees. On the other hand, for guests to Vrbo properties, 6-12% of their subtotals are service fees. Airbnb charges hosts a 3% commission rate with some variation depending on the location (hosts in Italy typically pay higher) and how strict a host’s cancelation policies are. Vrbo hosts, however, are charged a 5% commission rate plus a 3% credit card processing fee, unless they chose to pay $499 annually for unlimited bookings plus the 3% credit card processing fee.
Cancelation Policies
The range of cancelation policies varies on each so whether you’re a host or a guest you’re bound to find a system and stay that works for you.
Vrbo offers hosts the option to select:
- No Refund: Bookings cannot be canceled once processed.
- Strict: Bookings canceled at least 60 days before the start of the stay will receive a full refund.
- Firm: Bookings canceled at least 60 days before the start of the stay will receive a full refund and bookings canceled at least 30 days before the start of the stay will receive a 50% refund.
- Moderate: Bookings canceled at least 30 days before the start of the stay will receive a full refund and bookings canceled at least 14 days before the start of the stay will receive a 50% refund.
- Relaxed: Bookings canceled at least 14 days before the start of the stay will receive a full refund and bookings canceled at least 7 days before the start of the stay will receive a 50% refund.
Airbnb offers hosts the option to select:
- Flexible: Guests can cancel up to 24 hours before check-in for a full refund, and hosts won’t be paid. If they cancel after that, hosts will be paid for each night they stay, plus 1 additional night.
- Moderate: Guests can cancel up to 5 days before check-in for a full refund, and you won’t be paid. If they cancel after that, you’ll be paid for each night they stay, plus 1 additional night and 50% for all unspent nights.
- Firm: To receive a full refund, guests must cancel at least 30 days before check-in. They can also get a full refund within 48 hours of booking if the cancellation occurs at least 14 days before check-in. If they cancel between 7 and 30 days before check-in, you’ll be paid 50% for all nights. If they cancel less than 7 days before check-in, you’ll be paid 100% for all nights.
- Strict: To receive a full refund, guests must cancel within 48 hours of booking and the cancellation must occur at least 14 days before check-in. If they cancel between 7 and 14 days before check-in, you’ll be paid 50% for all nights. If they cancel after that, you’ll be paid 100% for all nights.
- Long-term: This policy applies to all stays of 28 consecutive nights or longer and overrides your standard cancellation policy for those stays. Guests who cancel a stay can get a full refund only if they cancel their reservation within 48 hours of booking and at least 28 days before their check-in date. If a guest cancels after that, you’ll be paid for all nights spent plus 30 additional nights from the date of cancellation. If a guest cancels with fewer than 30 days remaining on the reservation, you’ll be paid 100% for all of those remaining nights.
Reviews & Audience
Along with these differences, the platforms also vary slightly in how they handle review periods (14 days for Airbnb and up to a year on Vrbo-although after one party submits a review the other has 14 days to submit theirs). Their general audiences also differ with Vrbo attracting on average large families and older audiences, while Airbnb attracts a younger crowd seen to be more adventurous as well as business travelers. Each platform has its pros and cons its a matter of finding out which one works best for your needs and desires.
Summary
Essentially, short-term rentals (STRs) and vacation rentals are the classifications, Airbnb and Vrbo are the channels they are offered on. If you’re starting your STR journey there are many terms and strategies to learn and consider so don’t get tripped up by the small stuff. STRs can give you a unique opportunity to earn more than traditional rentals, although they do require more frequent tending to and organization in turning over the property. Don’t let that scare you though, there’s a world of resources to help you perfect the process and the perk of more money and more time can’t be beat.
Don’t have a property but still want to reap the benefits? There are plenty of strategies to get involved.
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