Let’s compare the pros and cons of listing your STR on platforms like Airbnb and VRBO versus using direct booking software like OwnerRez, Lodgify, Guesty or Hostaway.
As a short-term rental host, should you use direct booking software like OwnerRez or sign up for Airbnb and similar websites?
The truth is, it depends. There’s lots to think about when making this decision for your STR. As direct booking tools and third-party websites both have ups and downs, most STR owners may consider a mix of the two.
If you’re unsure what to do, let’s have a look at both sides of the coin for third-party rental websites and direct booking tools.
The pros and cons of listing on Airbnb
Third-party booking platforms like Airbnb and Vrbo make the process of renting your STR simple. On pages like this, all you have to focus on is getting your listing in tip-top shape and getting as many eyes on it as possible.
But is there a catch? Let’s look at the best and not-so-great parts of being a host on Airbnb.
The pros of using Airbnb as a host
It’s easy to manage & feels familiar for guests
If you have any social media accounts, you can probably manage your Airbnb account with no problem.
One good thing about using one of these platforms is that guests are comfortable with them. There is a sense of security around them booking a home through them. They know hosts have been verified and the properties are legit. This is especially important considering it’s crazy how scams happen both to guests and hosts in this business).
So one thing to consider is whether or not you do decide to direct book, having a presence on these platforms will give your guests further confidence in you and be able to book through Airbnb if that is their preference. They will have to pay higher guest fees over there though so in the end, they will hopefully direct book with you, after vetting your property further on one of the other platforms.
The listing is free — until it gets booked
On Airbnb, you only pay a commission per booking instead of a flat fee or subscription. This is great news for those starting out since it can be hard to commit to a monthly payment when you’re not seeing consistent income yet.
Your money is protected
Airbnb offers escrows, deposits, and multiple ways to safely get your money — as long as you stay within the platform. You don’t get this same protection quite as easily if you’re dealing with guests directly on your website, although there are ways you could protect yourself, like deposits and rental agreements.
The legal side is taken care of (somewhat)
When you use a platform like Airbnb, you don’t need to set up additional contracts or insurance. It’s all included in your service.
In the case of Airbnb, their Host’s Guarantee means that any damage caused by your guest could be covered by Airbnb in case something goes wrong and the guests don’t reimburse you. Just know that getting reimbursed can take weeks or months depending on who you talk to that’s been through that experience.
And not everything ends up being reimbursable. For example, Airbnb does not cover damage from pets, yet it requires hosts to accept all service and emotional support animals. Service animals are great and definitely deserve to be allowed to help their owners. On the other hand, emotional support animals is such a broad description and guests are abusing the term in order to bring along their regular pet as hosts don’t have any say in the matter at the moment.
The cons of using Airbnb as a host
You trade comfort for flexibility
While it’s easy to use Airbnb and reach users there, you have to adhere to their rules to stay on the platform. For some, this may not be a big deal; but you may want to customize your home listing a certain way, and that’s simply not possible.
Another example is your communication: With your own website or channels, you can choose how to engage with your guests, but on Airbnb, you have to stick to their messaging system to stay protected throughout the transaction.
You are also at the mercy of their guest vetting. Unless you know the right questions to ask and get responses quickly from guests, you may be penalized if you try to cancel a “red flag” guest or one that’s not a good fit for you.
Penalization could mean the loss of your “super host” status which in turn, moves you further down in searches. Having your own website with direct booking capabilities gives you the freedom to more easily vet guests and turn away ones you aren’t comfortable with without fear of it hurting your business.
You’re competing for attention
While platforms like Airbnb make it easy to reach a big audience, your listing is surrounded by competitors. And it’s hard to stand out when your potential guest is looking at dozens of other properties near you.
In order to stay competitive, you may have to lower your prices. So you risk reaching less than ideal guests who are simply looking for a deal rather than picking their best match.
In my research, lower pricing = more difficult or damaging guests. So having the ability to price yourself at a rate that protects and leads to higher quality guests that will respect your space, is very important.
It’s impersonal
This is a pro for many. But the way I see it, giving your STR a life of its own starts with a customized brand — your imagery, color palette, themes, and anything you add to your business to make it stand out.
On Airbnb, you stick to a cookie-cutter listing, share a few photos, and add property details. That’s it. On the flip side, if you have a website and social channels, you get to present your property on your terms and give users a feel of what they get online. This helps to hone in on your target guests and makes it easier to connect with them to grow your business.
Etsy comparison: Have you ever bought something off of Etsy and loved it and someone asked you where you got it? What was your most likely response? “I got it off of Etsy.” The person that actually labored and created the amazing product gets zero credit. The marketplace gets the credit. Same way when it comes to people booking on Airbnb. 9 times out of 10, they are going to refer to the platform when asked “where did you stay for that trip?” — “We stayed in an Airbnb!” vs. having a business outside of that platform, where you will have an easier time creating a memorable, stand-alone brand that people can more easily promote and share with others by sending them directly to your website!
The pros and cons of direct booking for your short term rental
The pros of renting your property with direct booking software
Your guests aren’t looking at competitors
If you’re using direct booking, guests are already on your platform. So you’re not competing for their attention. This means you may get away with higher rates and fewer bookings to make your business more profitable without hustling too much and without wearing down your property.
You’re in charge of your interactions with guests
Airbnb and others limit your interaction with guests to their platform in order to keep you safe. But this can make communication feel dry and forced.
On the other hand, direct booking lets you connect with them directly and make their overall experience more personal and friendly. This is especially great for building long-term relationships with guests, leading them to come back to your rental in the future or even yearly! And why should Airbnb get those fees for return guests when your property is the one that won them over – save the fees and make it easy for guests to book directly on your own website.
You usually pay a fixed price instead of commissions
Subscriptions for direct booking software are generally affordable. For reference, OwnerRez’s Professional plan starts at $35/mo paid annually — full disclosure: There’s a lower “Starter” plan at $12, but you also pay a commission per booking among other things.
The fixed price in a subscription model makes it easy to fit in your budget. However, if you’re starting out, it may be hard to justify committing to the fixed expense of a subscription without consistent bookings. Only you can make the decision as to what is best for your rental business. For us personally, this means using OwnerRez from the get-go on our website as we believe in the long run, it will pay off. Plus, we plan to market heavily on Instagram and direct people to our website from the start.
You can protect yourself and your property more easily
You can require a legit security deposit, have your guests sign a liability waiver, have them agree to a rental contract, and so on when it’s all through your own website and booking platform.
As I mentioned earlier, you can better vet your guests and require additional verification and deposits from them, or you can simply cancel them without risk of penalty to your status on a third-party platform. This means greater peace of mind that the people you are allowing into your home are high-quality guests. Learn more about ways to protect yourself here.
On the fun side, you can even have them fill a questionnaire to give you a peek at their expectations and help fulfill them for an enjoyable experience. Your “welcome form” can include questions like what they’re most excited about in your town, what their favorite drink or snack is, and more practical stuff like sleeping arrangements for larger parties.
The cons of renting your property with direct booking software
Setup is (more) complicated
All you have to do to get started on Airbnb is make an account. But using a direct booking tool means setting up your marketing, getting your software up and running, and handling a lot of logistics. While neither of these is hard per se, they’re more involved than Airbnb’s listings and can require some figuring out for the tech side.
Insurance and payment protection are up to you
Since you’re not using a management system like Airbnb, it’s up to you to get proper insurance and protect your investment. Plus, you’ll need liability insurance in case anything happens to your guests. Although, truth be told, you may not want to rely 100% on Airbnb’s liability insurance; so even if you go with third-party platforms, you probably want to have your own insurance outside of theirs.
You also have to track bookings and payments for bookkeeping. An accountant could help sort this out so you don’t face any issues with your taxes.
There’s no clear winner when it comes to direct booking or Airbnb for short term rental hosts
Depending on your goal, a good business strategy for your property could include a mix of both third-party and direct booking to get the best of both worlds. For newer hosts, Airbnb is a great place to break into the rental business and get some experience before breaking out on their own.
And for seasoned property owners or those looking to make this more of a business than a side hustle, looking into direct booking could help grow and increase revenue. But third-party listings can still drive significant income if done right.
