Vrbo Is Going to 12%. How Property Managers Should Reprice (and What to Check First)

What changes for property managers specifically

• Commission: around 5% today for PMS-connected managers, 12% after the switch.
• Card processing: if you process payments yourself, you still pay your processor, typically around 3 to 4%. Vrbo’s “payment processing fees are going away” message applies to hosts who take payment through Vrbo, not to you.
• Timing: Vrbo’s notices say October 29, but its own FAQ says the change “will roll out in early November” and that you’ll be told when it applies to your account. Ask your rep for your exact date.
• Bookings already on the books: reservations made before your switch-over keep the old rate. Only new bookings pay 12%.
• Annual subscriptions: managers on annual subscriptions report that their Vrbo rep has told them the current term will be honored until renewal, then move to 12%. Vrbo’s published documentation doesn’t cover this, so confirm it with your rep.

Put together, a manager paying 5% commission and 3% processing goes from 8% total to 15% total. On a $1,000 booking, that’s $70 less in your pocket, about 7.6% of what you used to keep.

The markup math most people get slightly wrong

The natural response is a Vrbo channel markup. The natural way to size it is to add up the fees: 12% commission plus 4% processing, so mark up 16%.

That leaves money on the table, because both fees are charged on the marked-up price, not the original one.

Say your base rate is $1,000 and you want to keep the full $1,000 after Vrbo and your processor take their cut:

• With a 16% markup, the guest pays $1,160. Fees of 16% take $185.60. You keep $974.40.
• To keep the full $1,000, you need a markup of about 19%. The guest pays $1,190, fees take $190.40, you keep $999.60.

The formula is: markup = 1 ÷ (1 − total fees) − 1.

There’s a second question hiding here: what are you trying to protect? Keeping your full base rate is one goal. Keeping what you used to net on Vrbo is another, and it needs much less. A manager who used to pay 5% plus 3% only needs about an 8.2% markup to get back to their old Vrbo take-home.

Neither answer is wrong. But pick one on purpose, because the gap between 8.2% and 19% is the gap between staying competitive on Vrbo and pricing yourself down the search results.

The rate parity catch

Before you set any Vrbo-only markup, read the new terms.

Vrbo’s updated host terms (Section 4.5.7) require your Vrbo offer to be “at least as complete, accurate, current, detailed, and favorable” as on other channels, and Skift reports the terms cover your own website too. Covered items include rates, discounts, fees, and ancillary services.

Read literally, that means a markup that applies only on Vrbo would put you out of line with the terms. As of October 7, Skift reports that Vrbo plans to ease the rate parity rule after pushback from managers at VRMA in Nashville, but the details aren’t public yet.

What to do:

• Ask your Vrbo rep, in writing, whether a Vrbo-only channel markup is allowed under your terms, and what the eased rule will look like.
• If it isn’t allowed, the alternative is raising your base rate across every channel. Your direct bookings then earn the extra margin instead of matching Vrbo’s lower net.

Should you switch to a 50/50 payment schedule?

Some managers are moving Vrbo reservations from full payment at booking to 50% at booking and 50% closer to arrival. The logic is solid.

Why it helps:

• Less refund exposure. If a guest cancels inside the refundable window, you refund 100% but you don’t get the processing fee back. On a $2,000 booking at 3%, that’s $60 lost if you charged it all upfront. With 50/50, only the first $1,000 was ever charged, so you lose $30.
• A lower first commitment. If you price at the top of your market and you’re adding a channel markup, a smaller upfront charge may make the booking easier to say yes to.

What to check before you switch:

• Line up the balance date with your cancellation policy. Charge the second payment on or after the day the booking becomes non-refundable. Otherwise you’re back to refunding processed money.
• Plan for failed second payments. Cards expire, get replaced, or hit limits. Decide in advance how many retry attempts you make, how fast you contact the guest, and when the booking cancels.
• Owner payouts. If your owners are paid on booking, a split schedule changes their cash flow. Tell them before it happens.
• Platform support. Confirm your PMS and Vrbo connection support a split schedule on Vrbo reservations, and check how Vrbo’s own cancellation terms interact with it.

Decide what Vrbo is for now

At 5%, Vrbo was a cheap place to fill nights. At 12% plus processing, it costs about the same as the other big platforms. That changes the question from “should we be on Vrbo?” to “which bookings should Vrbo be getting?”

A useful split:

• New guests who’ve never heard of you: that’s what the commission buys. Vrbo is earning its fee.
• Guests who have stayed with you before: they already know you. Paying 12% to Vrbo when they rebook is paying for an introduction that already happened.

This is where direct booking matters, and it’s worth being honest about how. If rate parity holds, you may not be able to offer a lower price on your own site than on Vrbo. But at the same price, a direct booking puts the 12% commission in your pocket instead of Vrbo’s. The win is margin, not discounts.

A short checklist before your switch-over date

1. Get your exact switch-over date from your Vrbo rep.
2. Get the rate parity position in writing before setting a channel markup.
3. Decide what you’re protecting (your full base rate or your old Vrbo net) and size the markup with the formula above.
4. If you move to 50/50, set the balance date at or after the end of the refundable window, and set up failed-payment handling first.
5. Tell your owners what’s changing and why their statements will look different.
6. Make sure your repeat guests know how to book with you directly.