Airbnb Vs. Direct Booking: How to Avoid Short-term Rental Fees
Discover the key differences between Airbnb and direct booking. Unlock strategies to minimize short-term rental fees and grow your hospitality business.
As a vacation rental owner, you must decide where to list your properties. Most hosts jump on prominent platforms with massive user bases, like Airbnb, to gain visibility. As a result, they limit their potential reach and pay double the amount of fees.
However, as the short-term rental industry evolves, owners need to break free from being the co-hosts and start building their own brands. This is their chance to do business on their terms, skip the middleman, and minimize the fees. The word for direct booking!
To give you a clearer picture, we'll analyze the pros and cons of Airbnb vs. direct bookings in this guide. We'll discuss payment plans, cancellation policies, customer communication, and special bonuses. So grab your favorite coffee, and let's dive in.
Airbnb is a giant platform with over 7 million listings and 4 million hosts worldwide. It counts over one billion guest stays to date, so it's hard to ignore it even if you want to.
However, although the platform started as an affordable solution for adventurous travelers, it has now become a pricey, commercialized, and unregulated mess. Here are its pros and cons:
- It's a global brand. Airbnb holds an impressive 49.5% market share in bookings. With a global presence in 190+ countries, it provides hosts with business opportunities across the globe. Their Superhost badge helps owners grow at pace.
- Helps you gain visibility. Airbnb's robust referral system is structured to encourage guests to refer friends and family and earn travel credits. These can be redeemed via Airbnb, helping the platform and you as a host grow. It's also proof of your quality service.
- Does your marketing. Compared to direct bookings, Airbnb uses a complex algorithm that focuses on guest needs, trip specifications, and listing details to increase your visibility. Additionally, it brings traffic to your listings through email marketing, search engine optimization (SEO), and advertising
- Handles payments for you. Once potential business travelers book your property via Airbnb, the platform holds the payment secure until 24 hours after the check-in. It also accepts different payment options (PayPal, credit, and debit cards), making your listing more accessible to a broader audience.
- Has lower fees. Compared to other vacation rental platforms like Booking.com and VRBO, Airbnb has lower commissions, including credit card payment handling fees.
- Offers vacation rental insurance. As a booking engine, Airbnb offers up to $3 million in damage protection for hosts, although they might need to pay for additional liability coverage.
- Requires a guest identity verification. This is quite helpful for verifying guest details and enhancing trust and safety.
- Commissions. It goes without saying, but Airbnb has commissions. You're paying the middleman to boost your Google search results, handle your marketing strategy, and accept payments.
- Guest-centric approach. Airbnb is reputed for taking the guest's side in dispute resolutions. As a result, vacation rental managers are obliged to pay significant amounts for minor issues.
- Bad guest reviews policy. As a property management system, it's reputed for not removing bad reviews, even if the hosts prove that guests violated policies.
- Hosts can't handle bookings themselves. In other words, they can't have their own cancellation policies, repeat guests, and legitimate business.
- Owners don't have a say in whom they host. Unlike direct booking guests, hosts can't scan the people renting their properties. As a result, it can feel like entrusting their homes to complete strangers.
- Hosts don't control customer loyalty without a strong online presence. Without building a personal connection with potential guests, a property manager can't easily attract repeat bookings. Compared to direct bookings, the personalization gets lost between the property and the middleman.
A direct booking website is the key for property owners wanting to create an elevated brand experience. It helps them tap into hidden revenue, grow their audience, and better control their hospitality business.
- Save on fees. Relying on online travel agencies like Airbnb and VRBO eats into your profits. Specifically, Airbnb takes a 3% fee from hosts and 14% from guests for each booking. At the same time, VRBO charges a 5% commission fee for the rental and an extra 3% for processing fees. On the other hand, building your direct booking site removes the fees, and you can reinvest that money into your business. For example, you can use it to offer incentives to potential guests or invest it in your properties. Alternatively, you can stack it to your take-home profit.
- Own your listings and control your business. More direct bookings equals more control over your business. Instead of following the one-size-fits-all approach - specific formats, limited characters, amenity lists - you can show off your rentals on your own direct booking website. Describe the history of your properties and why they stand out from the competition and showcase them with high-quality photos.
- Drive guests' loyalty. Global brands like Airbnb follow strict guidelines for processing and sharing guest data. This limits hosts' ability to reach out to guests, nurture direct relationships, and turn them into repeat buyers. On the contrary, a direct booking website encourages direct contact with guests. For example, you can share updates, offers, loyalty discounts, or guides for their stay.
- Build your brand. Property owners rarely benefit from Airbnb's loyalty branding. They're absorbed with algorithms and policies since their listing is one among millions. This makes it harder to differentiate from the competition and show how their rental is unique. Thankfully, having your own vacation rental website will help you reflect your personality and add a personal touch. You can either create a custom website with website builders or choose Houfy for fully customizable vacation rental websites.
- Control your cancelation policy. OTAs like Airbnb have standard cancellation policies, often too exacting for hosts. Whether you agree with them or not, you don't have a say; therefore, you lose control over a big part of your business. However, you can decide the exact steps of the booking process for your direct booking website as well as the cancellation policy for guests. For example, you can customize the cancellation fees for every reservation, offer no refunds for last-minute bookings, and even make notable exceptions for your loyal guests.
- Screen your guests. Have a say on who books your place without fear of losing your Superhost status or getting penalized. Although an online travel agency like Airbnb offers guest ID verification, it still doesn't guarantee safety. Thankfully, nothing beats a good old conversation with potential guests.
- You have to do your own marketing. Although a channel manager promotes you on social media, search engines, and in-app, having your own website domain means self-promoting.
- You have to handle payments yourself. This means that you should avoid double bookings with the help of your trusty availability calendars and be ready to reimburse guests in case of cancellations.
- You can't offer 24/7 communication. Unlike giant OTAs like Airbnb, you'll only be available to answer guest requests for several hours daily. This might result in some lost last-minute bookings.
Houfy's Example for Direct Booking Short-term Rental
If you want to develop your own brand as a property owner, Houfy is THE marketplace for vacation rentals and real estate properties. By connecting properties directly with guests, Houfy makes finding, renting, or selling vacation homes easy.
And the best part? Houfy is FREE so that guests can pay less for the same home. In return, property owners get a direct relationship with buyers, their own direct booking website, and instant quotes. Airbnb and VRBO simply can't compete!
Houfy verifies its hosts and offers Lite and Premium Plans for those looking to take their rental business to the next level. Finally, the platform offers last-minute specials, such as highlighting or showing your listings at the top of search results. Join today and get your first direct booking!
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