When it comes to hosting, Airbnb is undoubtedly the first platform most hosts choose.
Airbnb is global, it’s easy to use, and it requires very little time or effort to set up. However, it’s normal for many hosts and guests to wonder - How much are they really being charged in commission? What percentage does Airbnb take?
In this article, we’re going to break down the costs of using Airbnb and how it impacts guests and hosts.
With a clear understanding of Airbnb service fees, owners and managers can determine a pricing strategy that makes sense for their listing.
Read more: How To Manage Vacation Rental Property
What Are Airbnb Service Fees?
An Airbnb service fee is a fee charged to hosts and/or guests by Airbnb in exchange for the services the platform provides. These services include marketing, administration, and 24/7 customer support
Airbnb fees are charged as a percentage of the subtotal value of each booking made. These fees are applied automatically and hosts will see this fee deducted from their host payout in their transaction history on Airbnb, while guests will see it applied at checkout when completing their reservation.
What Are Airbnb Host Fees?
The average Airbnb host fees vary largely depending on the host, and the type of Airbnb (for example Airbnb Luxe and Airbnb Plus are subject to different fees).
Hosts can decide to pay their Airbnb charges through two methods.
- The host-only fees or
- the split fee. This is where the fees are split between the host and the guest.
Another factor that affects the host fees is whether or not your property is connected to software (such as Lodgify or other channel managers). If it is you might also be expected to pay more as the split fee isn’t always allowed.
Location is also a factor that influences the host fees. For example, exceptions are sometimes made for properties located in the U.S., Canada, Bahamas, Mexico, Argentina, Taiwan, and/or Uruguay. Even when they are connected to software, some properties in these locations may still be allowed to use the split fee.
Airbnb also takes your cancellation policy into consideration when calculating the host service fee amount. If you have a strict cancellation policy, you can expect it to be around two percent higher than more flexible policies.
What Percentage Does Airbnb Charge Hosts?
The host-only fee structure makes the host responsible for covering the service fee. It allows you more control over your nightly rates and it keeps travelers happier without being bombarded by an unexpected guest service fee at checkout.
For hotels and software-connected hosts, this fee is mandatory unless most of those hosts’ listings are located in the United States, Canada, the Bahamas, Mexico, Argentina, Taiwan, or Uruguay.
For the host-only option, the host will pay between 14-16% of the subtotal of the reservation.
Guests won’t pay a service fee, but hosts may choose to raise their nightly rate to indirectly transfer some or all of the service fee to the guest.
For the split fee structure, most Hosts pay a flat service fee of 3% of the booking subtotal. The subtotal is your nightly rate plus your cleaning fee* and additional guest fee, if applicable, and doesn’t include Airbnb fees and taxes.
Some hosts prefer to have a more transparently-priced property. By choosing the Airbnb host-only fee, guests will not have an extra service fee tacked on to their total amount as the expense will fall fully on the host.
Airbnb’s Service Fees page states that the minimum host-only fee starts at 14% and can increase up to 20%. Additionally, a 2% fee may be added on top of this if the host has a Super Strict cancellation policy.
If your property already has a high VAT, tax, or cleaning fee it might be useful to opt for the host-only fee option so as to not scare off guests due to an excessive amount of additional expenses.
What Are Airbnb Guest Fees?
Airbnb guest fees come into play when the host chooses the split fee structure. The split fee shares the Airbnb service fee between both the host and the guest, with the guest bearing the majority of the fees.
The major downside is that travelers can feel scammed when this large extra fee only pops up at checkout but, with this fee structure the hosts can set the rate of the room lower than it would have been with the split-fee structure.
Under the split-fee model, hosts are charged around 3% of the subtotal of the reservation, excluding taxes. However, Airbnb could charge a higher fee for Airbnb Plus hosts, hosts with listings in Italy, and hosts who opt for the Super Strict cancellation policy.
Guests will pay the majority of the service fees.
What Percentage Does Airbnb Charge Guest?
Most guest service fees are under 14.2% of the booking subtotal (nightly rate + cleaning fee + additional guest fee, if applicable—excluding Airbnb fees and taxes). This fee varies based on a variety of factors and is shown during checkout before you book so you know what to expect.
Why Does Airbnb Charge Service Fees?
As mentioned earlier, Airbnb fees are charged to handle the administration costs of the host. Airbnb states that their fees cover:
- 24/7 customer support
- Marketing to guests via Google, social media, and more
- Protection for you and your place
- Educational resources for Hosts
Are Guests Aware Of These Fees?
Yes. Services fees and cleaning fees are calculated and shown to guests during checkout when completing their reservations.
Can I Avoid Paying The Airbnb Service Fee?
To put it simply, no. The amount is subtracted automatically from your payout, so there’s no way to avoid it.
Note that if you do try to hack or find a loophole out of paying your service fees, you’ll be in violation of Airbnb’s usage rules and risk getting removed from the site.
Can I advertise my property for free on Airbnb?
Yes, advertising a listing on Airbnb is completely free for hosts. Airbnb markets your property for you by listing it on their high-traffic website without any additional cost to you. Airbnb doesn’t have paid advertising for their listings.
How Much Of The Market Does Airbnb Take?
Airbnb accounts for upwards of 20% of the entire rental market. With the entire market valued at roughly $87 Billion in 2020, Airbnb’s total revenue sits in the realm of $20Billion.
In 2021, 300 million bookings were made on Airbnb, a 55% increase in 2020. There are over seven million listings on Airbnb, run by four million hosts.
With Airbnb’s year-on-year growth rate in 2018 topping 30% in the first quarter alone, it’s safe to assume these statistics are only going to rise in the coming years.
Thus, it’s beneficial for hosts to leverage a channel manager to get the benefits of listing on Airbnb. Booking Ninjas channel manager supports Airbnb and you can easily list and sync your rental property to Airbnb.
Schedule a demo to learn more about Booking Ninjas PMS.
Read more: How To Start a Vacation Rental Business: Complete Guide