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Business Operations Business Models

How Does Vrbo Make Money (Business and Revenue Model)

The Vrbo business model

Vrbo logo
Here’s what you should know:
  • What is Vrbo, and how does Vrbo work?
  • How does Vrbo make money?
  • Listing Subscription Revenue
  • Vrbo Commission Fees
  • Guest Service Fees
  • Vrbo profit and revenue
  • What is the Vrbo business and revenue model?
  • Vrbo funding, net worth, and valuation
  • Vrbo subsidiaries, acquisitions, and exits

How does Vrbo make money? Well, here is a full, in depth, breakdown of their three (3) revenue streams and the different products and services they offer, as well as the Vrbo business and revenue model, how much Vrbo makes per year, and how Vrbo works.

What is Vrbo, and how does Vrbo work?

Vrbo, originally known as Vacation Rentals by Owner or VRBO, is an online rental marketplace for connecting homeowners to travelers looking for vacation rentals.

Founded in 1995 by David Clouse, Vrbo went on to later get acquired by HomeAway on November 13, 2006, for an undisclosed amount.

Since that time, Vrbo now has more than two million active listings across 190+ countries on its platform.

So, how does Vrbo work? To use Vrbo, users can simply download their mobile app in the Apple App Store or Google Play store; or go to their website.

Once on their homepage, users can start browsing rentals by first entering in a location and customizing the filter presets on Vrbo’s homepage. Once the user finds a rental they are interested in, they can either save it to their favorites list or book it.

Some of Vrbo’s competitors include AirbnbHopper, TripadvisorKAYAKtrivago, Expedia, and other online travel booking websites.

Vrbo App in Apple App Store | Vrbo Business Model | How Does Vrbo Make Money | How Does Vrbo Work
Source: Apple App Store | Vrbo

How does Vrbo make money?

Vrbo has more than two million active listings on its marketplace, per reports. So how does Vrbo make money off of all these listings?

Below is a breakdown of how much money Vrbo makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 3 ways of how Vrbo makes money in 2022

Vrbo has a revenue model that makes money in three (3) ways; from subscription revenue, commission fees, and guest service fees.

#1. Listing Subscription Revenue

One of the ways Vrbo makes money is through the annual subscription fees they charge their hosts for listings on their platform.

As noted above, Vrbo has a reported 2+ million active listings on its rental marketplace. Of which are paying $499 per year to keep it active. Although it’s unclear how many of these listings pay the yearly subscription fee, or how many switched over to the pay per booking alternative (as talked about below).

What are the Vrbo host fees?

  • Vrbo hosts are charged $499 per year (per listing)

Note: Vrbo’s $499 per year listing subscription fee is only good for one (1) listing. Additional Vrbo listings will cost hosts and additional $499 per year, per listing.

#2. Vrbo Commission Fees

Alternatively, Vrbo also gives a pay per booking option for hosts.

So, instead of Vrbo hosts paying a $499 annual fee with 0% commission per booking, they can alternatively pay a 5% commission per booking with a $0 annual fee.

Vrbo owner fees:

  • hosts pay Vrbo a 5% commission per booking, plus a 3% payment processing fee
Vrbo marketplace | Vrbo Business Model | How Does Vrbo Make Money | How Does Vrbo Work
Source: Vrbo

#3. Guest Service Fees

In addition to Vrbo hosts paying fees, Vrbo also makes money by charging guests fees as well.

The service fee amount varies and is a percentage of the total reservation amount, minus the taxes and refundable fees. According to Vrbo, “the higher the reservation amount, the lower the percentage of the service fee.” You can see the varying percentage below.

What are the Vrbo fees for guests?

  • Vrbo guests are charged between a 6% to 15% service fee of the total reservation amount (excluding taxes and refundable fees)

Note: For Vrbo hosts using the pay per booking option and giving Vrbo a 5% commission fee per booking. That means Vrbo is making anywhere between 11% to 20% per booking. (commission fee + guest service fee)

Vrbo profit and revenue

In 2021, the Expedia Group reported that Vrbo, its subsidiary, generated an estimated $2+ billion in revenue.

Note: Because the Expedia Group, Inc., the parent company of Vrbo, is a publicly traded company, under the Securities Exchange Act of 1934, they must file continuous financial filings with the U.S. Securities and Exchange Commission (SEC). You can find all of Expedia Group’s publicly released financial reports, including annual reports, through Expedia Group’s investor section on their website.

What is the Vrbo business and revenue model?

Vrbo makes money through a few revenue models that they combine within their company, they are:

  • Subscription business model
  • Commission business model
  • Fee for service (FFS) business model
  • Business to business (B2B) business model
  • B2B2C (partnerships) business model

Vrbo funding, net worth, and valuation

According to Vrbo’s Crunchbase profile, Vrbo has not raised any funds.

On November 13, 2006, HomeAway acquired Vrbo for an undisclosed amount.

Vrbo subsidiaries, acquisitions, and exits

To date, Vrbo has not made any acquisitions, investments, or exits.