A new method called QM-VM2 is presented that efficiently combines statistical mechanics with quantum mechanical (QM) energy potentials in order to calculate noncovalent binding free energies of host-guest systems. QM-VM2 efficiently couples the use of semi-empirical QM (SEQM) energies and geometry optimizations with an underlying molecular mechanics (MM) based conformational search, to find low SEQM energy minima, and allows for processing of these minima at higher levels of ab initio QM theory. A progressive geometry optimization scheme is introduced as a means to increase conformational sampling efficiency. The newly implemented QM-VM2 is used to compute the binding free energies of the host molecule cucurbit[7]uril and a set of 15 guest molecules. The results are presented along with comparisons to experimentally determined binding affinities. For the full set of 15 host-guest complexes, which have a range of formal charges from +1 to +3, SEQM-VM2 based binding free energies show poor correlation with experiment, whereas for the ten +1 complexes only, a significant correlation (R = 0.8) is achieved. SEQM-VM2 generation of conformers followed by single-point ab initio QM calculations at the dispersion corrected restricted Hartree-Fock-D3(BJ) and TPSS-D3(BJ) levels of theory, as post-processing corrections, yields a reasonable correlation with experiment for the full set of host-guest complexes (R = 0.6 and R = 0.7, respectively) and an excellent correlation for the +1 formal charge set (R = 1.0 and R = 0.9, respectively), as long as a sufficiently large basis set (triple-zeta quality) is employed. The importance of the inclusion of configurational entropy, even at the MM level, for the achievement of good correlation with experiment was demonstrated by comparing the calculated ΔE values with experiment and finding a considerably poorer correlation with experiment than for the calculated free energy ΔE - TΔS. For the complete set of host-guest systems with the range of formal charges, it was observed that the deviation of the predicted binding free energy from experiment correlates somewhat with the net charge of the systems. This observation leads to a simple empirical interpolation scheme to improve the linear regression of the full set.