Australia: My learnings from Hospitable’s Vrbo Partner Connection and the Victorian Short Stay Levy
Firstly, thank you to PC and the wider Hospitable team for the hard work, quick responses and patience in answering my many questions while I worked through the new Vrbo Partner Connection.
Vrbo currently represents about 20% of my annual revenue, and I definitely want to grow that channel. I initially set my Vrbo markup at 21% because I did not know exactly what to expect from the commission, Hospitable fees, GST and Victorian Short Stay Levy treatment.
After receiving my first bookings through the connection, I wanted to share what I have learned so far. Hopefully this helps other Australian hosts, particularly those navigating the Victorian Short Stay Levy for the first time.
1. How the payment flow works
Hospitable acts as Merchant of Record and processes the guest payment.
For my Australian Vrbo Partner Connection bookings:
- Hospitable automatically deducts the 12% Vrbo commission
- Hospitable also deducts its 2.7% transaction fee
- The Victorian Short Stay Levy is collected from the guest
- The levy is included in the amount paid to the host
- The host must set the levy funds aside
- Vrbo later invoices the host for the levy
- Vrbo then remits the levy to the Victorian State Revenue Office
This is important because the levy may appear in the payout, but it is not host revenue.
PC and the team confirmed that Vrbo currently intends to recover the levy from hosts through invoices issued every six months. Although Hospitable technically has the ability to remit the levy directly, Vrbo requires the funds to follow its own invoicing process.
Knowing that Vrbo will invoice the levy is still preferable to having to calculate and remit it directly to the State Revenue Office myself. However, I hope Hospitable continues pushing Vrbo for a cleaner process because collecting the levy from the host again six months later creates unnecessary reconciliation work.
Vrbo’s Victorian levy guidance is available here:
https://www.vrbo.com/en-au/help/articles/vrbo-stay-taxes-lodging-taxes-australia#victoria
2. The Victorian Short Stay Levy calculation
The legal Victorian Short Stay Levy rate is 7.5% of the total booking value, including the levy itself.
To add the levy on top of an existing accommodation subtotal, the practical charge is approximately 8.11%.
The levy generally applies to:
- Accommodation charges
- Mandatory cleaning fees
- Administration fees
- Extra guest fees
- Pet fees
- Applicable GST
A refundable security deposit is not included in the levy calculation.
The basic flow is:
Guest pays the levy
Hospitable collects the payment
Hospitable passes the levy amount to the host
The host sets the money aside
Vrbo invoices the host every six months
Vrbo remits the levy to the State Revenue Office
The invoice period is based on the applicable Vrbo reporting process and the checkout date, so hosts should keep a separate levy liability record rather than treating the levy as revenue.
3. Vrbo commission, GST and my markup calculation
Hospitable automatically deducts the 12% Vrbo commission from the booking. It is not a separate commission payment that I need to make manually.
Hospitable also deducts its 2.7% transaction fee.
The remaining question for me is GST on the Vrbo commission.
I am not registered for GST. Vrbo’s general Australian guidance indicates that GST may be added to commission fees when the host has not supplied a valid GST registration. What I have not yet been able to confirm is how this applies specifically to bookings processed through Hospitable’s new Vrbo Partner Connection.
The possibilities appear to be:
- The automatic 12% commission deduction already includes any applicable GST
- GST is added to the 12% commission, making the effective deduction 13.2%
- Vrbo later issues a separate GST invoice or account adjustment
I do not yet know which treatment applies.
I also do not want to assume that GST will be invoiced every six months in the same way as the Victorian Short Stay Levy. GST on commission and the Victorian levy are different obligations and may follow different invoicing processes.
This uncertainty affects the markup required to preserve the intended accommodation and cleaning income.
If the commission remains exactly 12%
The calculation is:
Vrbo commission: 12%
Hospitable fee: 2.7%
Victorian levy added to the guest total: 8.11%
The retention factor is:
1 less 0.12 less 0.027 multiplied by 1.0811
This equals approximately 0.8508103.
The required gross up is:
1 divided by 0.8508103
This equals approximately 1.1754.
Therefore, the required markup is approximately 17.54% across both accommodation and cleaning.
If GST is added to the 12% commission
If Vrbo adds 10% GST to its 12% commission, the effective commission becomes 13.2%.
Using the same calculation, the required markup becomes approximately 19.22% across both accommodation and cleaning.
For now, I am keeping my markup at 21% as a small buffer until the first complete Vrbo commission statement or invoice confirms whether GST is already included, deducted separately or invoiced later.
I would appreciate confirmation from PC or the Hospitable Vrbo team about the exact GST treatment for an Australian host who is not registered for GST.
4. Do not forget to mark up the cleaning fee
Initially, I was thinking mainly about marking up the nightly accommodation rate. However, both the Vrbo commission and Hospitable fee also affect the cleaning fee.
If the actual cleaning cost is $150, the advertised cleaning fee should also be marked up.
Using the 17.54% markup:
$150 multiplied by 1.1754 equals $176.31
Using the 19.22% markup:
$150 multiplied by 1.1922 equals $178.83
If only the accommodation is marked up and the cleaning fee remains at $150, the host will still lose money because platform fees are deducted from the cleaning component.
5. Anonymous worked example
This is an illustrative example using fictional figures. It is not an actual guest booking and contains no guest information.
Assume:
- Seven nights
- Base nightly rate of $300
- Base accommodation value of $2,100
- Actual cleaning cost of $150
- Total amount the host wants to protect before platform costs of $2,250
Scenario A: 17.54% markup with a 12% Vrbo commission
Marked up accommodation:
$2,100 multiplied by 1.1754 equals $2,468.34
Marked up cleaning:
$150 multiplied by 1.1754 equals $176.31
Subtotal before levy:
$2,468.34 plus $176.31 equals $2,644.65
Victorian levy at 8.11%:
Approximately $214.48
Total collected from the guest before any separate Vrbo traveller service fee:
Approximately $2,859.13
Hospitable fee at 2.7%:
Approximately $77.20
Vrbo commission at 12% of the accommodation and cleaning subtotal:
Approximately $317.36
After accounting for the Hospitable fee, Vrbo commission, Victorian levy liability and actual $150 cleaning cost, the remaining accommodation income is approximately:
$2,100.09
That is approximately $300.01 per night, which is effectively the original target.
Scenario B: 19.22% markup if GST makes the effective commission 13.2%
Marked up accommodation:
$2,100 multiplied by 1.1922 equals $2,503.62
Marked up cleaning:
$150 multiplied by 1.1922 equals $178.83
Subtotal before levy:
$2,503.62 plus $178.83 equals $2,682.45
Victorian levy at 8.11%:
Approximately $217.55
Total collected from the guest before any separate Vrbo traveller service fee:
Approximately $2,900.00
Hospitable fee at 2.7%:
Approximately $78.30
Vrbo commission including assumed GST at an effective 13.2%:
Approximately $354.08
After accounting for the Hospitable fee, Vrbo commission, Victorian levy liability and actual $150 cleaning cost, the remaining accommodation income is approximately:
$2,100.07
Again, this is effectively the original target of $300 per night.
The example shows why the GST answer matters. If the effective commission is 13.2% rather than 12%, the 17.54% markup will leave a small shortfall.
6. Vrbo’s traveller service fee is separate
Vrbo may also charge the guest a traveller service fee.
This is separate from the host commission and may not appear as part of the host’s Hospitable financial breakdown.
I have not included the traveller service fee in the markup calculation because it is paid by the traveller rather than deducted from the host payout. However, it still matters when comparing the final guest price against Airbnb and direct booking prices.
A markup can protect the host’s net income while still making the Vrbo guest price less competitive, so hosts should compare the complete guest facing total across channels.
7. My $500 security deposit and identity verification
I use Hospitable’s Guest Portal to collect:
- A $500 refundable security deposit authorisation
- Guest identity verification
- Rental agreement acceptance
- Check in information
This process is also used for eligible Vrbo Partner Connection bookings.
The refundable security deposit should not form part of the Victorian Short Stay Levy calculation because it is an authorisation rather than accommodation revenue.
8. The earlier Review and Approve delay
Before enabling Instant Book, I experienced a delay with Vrbo’s Review and Approve setting.
Hospitable showed that the booking had been accepted, but Vrbo continued displaying it as a Booking Request or Enquiry.
Hospitable AI Help advised that Vrbo starts checking for reservation status updates once a day at around 9:00 am UTC. Updates are then processed gradually.
In my case, Vrbo changed the reservation to Accepted approximately 1 to 1.5 hours after the 9:00 am UTC sync started.
I only discovered the issue because the guest contacted me after receiving the automated confirmation and said the Hospitable Guest Portal link was missing.
That link was needed for the guest to complete the $500 security deposit authorisation and identity verification.
If another host sees the same behaviour, the accepted status may not appear in Vrbo until the next sync window. Unfortunately, the delay can interrupt the guest onboarding process.
This really should be much closer to real time.
9. I have now enabled Instant Book
I have now switched Vrbo to Instant Book through Hospitable.
My reasons were:
- Faster booking confirmation
- Less confusion for guests
- Better access to the Hospitable Guest Portal
- Fewer delays with security deposit authorisation
- Fewer delays with identity verification
- Potentially better booking conversion
- Less risk of losing a guest while waiting for approval
I am more comfortable using Instant Book because I still have Hospitable’s $500 security deposit authorisation, identity verification and rental agreement process supporting the booking.
10. Instant Book for early requests is not available through the connection
Vrbo offers a middle option called Instant Booking for early requests.
This can automatically accept bookings made within a defined booking window while leaving very early or very late bookings subject to review.
However, this option does not currently appear to be supported through Hospitable’s Vrbo Partner Connection.
Hospitable currently supports:
- Instant Book
- Review and Approve, also referred to as Request to Book
The more flexible Vrbo option does not appear to be available through the integration API.
Hosts should also be careful about changing this directly in Vrbo because Hospitable may overwrite settings that it controls through the Partner Connection.
11. Vrbo’s AI may override your cover photo and photo order
Hospitable sends photos to the Vrbo Partner listing in the same order they appear in Hospitable, including the selected cover photo.
However, Vrbo may use its own internal AI photo management system to select a different cover image and reorder the photos.
This means the Vrbo listing may not display the same cover photo or photo sequence selected in Hospitable.
Hosts can ask to opt out of Vrbo’s AI photo management.
The self service opt out form is:
https://expediaxm.qualtrics.com/jfe/form/SV_6heINmXaSAZ9nQG
The form asks for the property name and Vrbo listing ID. Hosts can also contact Vrbo directly and request that AI image selection be removed from their listing.
Hospitable’s guidance is available here:
https://help.hospitable.com/en/articles/13847107-managing-property-photos-in-hospitable
12. My practical checklist for Australian hosts
Based on what I have learned so far:
- Confirm the Vrbo commission percentage shown for your property
- Confirm whether Hospitable deducts the commission automatically
- Ask whether GST is included in the commission or added separately
- Apply the markup to both accommodation and mandatory cleaning fees
- Do not treat the Victorian Short Stay Levy as revenue
- Keep the levy amount in a separate liability account
- Prepare for Vrbo’s six monthly levy invoice
- Compare the complete guest price across Vrbo, Airbnb and direct bookings
- Test the Guest Portal after the first Vrbo booking
- Confirm that the security deposit and identity verification links reach the guest
- Allow for possible status delays when using Review and Approve
- Consider whether Instant Book provides a smoother guest experience
- Check whether Vrbo has changed your cover photo or photo order
- Opt out of Vrbo’s AI photo management if required
- Reconcile the first Vrbo invoice carefully before reducing any temporary markup buffer
Final thoughts
The new connection has taken some effort to understand, particularly around commission, GST, the Victorian Short Stay Levy, booking status synchronisation and guest onboarding.
However, Vrbo already represents about 20% of my annual revenue, and I definitely want to grow it.
Thank you again to PC and the Hospitable team for the hard work, quick responses and patience in answering my many questions.
My main remaining question is whether the automatic 12% Vrbo commission deduction already includes GST or whether, as a host who is not registered for GST, I should expect an additional GST deduction or invoice later.
Until that is confirmed, I am keeping my markup at 21%.
I hope this helps other Australian hosts, particularly those using the new Vrbo Partner Connection and navigating the Victorian Short Stay Levy for the first time.