Airbnb is an amazing example of a gig economy platform that allows you to receive a passive income for renting out your spaces to travelers. By acting as a broker between a guest and a short-stay rental owner, Airbnb helps both parties find each other and conclude a deal. Nonetheless, like all things good, the courtesy of Airbnb does come at some cost. This article explores the commission rules of the Airbnb site.
Read also some tips on how to contact Airbnb and get help.
What is an Airbnb Fee?
The Airbnb fee is the sum of money that Airbnb gets upon a successful reservation of a listed property. That fee is automatically withdrawn from the payout a host receives from the platform after the traveler’s check-out.
Why Does Airbnb Impose a Commission?
Airbnb is one of the largest online accommodation marketplaces so far. As a registered business, the platform needs to employ professional staff and pay taxes on its revenues. To cover its expenses, it does have to charge some commission from its users.
Moreover, fees help Airbnb keep on going and continuously provide satisfactory services to both hosts and guests. Money received from charges is necessary to:
- provide 24/7 customer support,
- pay for advertisements on Google and social media,
- guarantee compensations and insurance for both a consumer and a host,
- invest in the platform’s improvement and updates,
- enrich its educational database.
What Do Airbnb Commissions Look Like?
Airbnb establishes two different fee schemes. When you register a short-term rental listing on Airbnb, you will be asked to choose between the two commission models.
The first tariff is called “Split-Fee.” Under such an approach, both the host and the guest have to pay their portion of a service fee.
The second tariff is called the “Host-Only Fee.” As the name suggests, in this scenario, it is only the property host that has to pay a commission for Airbnb brokerage services.
Split-Fee Scheme: an Airbnb Fee is Distributed between the Host and the Traveler
Most Airbnb entrepreneurs prefer exactly this fee scheme these days. If you pick this tariff, the total fee for a deal will be distributed between the host and the guest. The platform will withdraw some amount from the homeowner’s payout and also charge a commission from the guest.
Homeowner Service Fee
The Airbnb platform commonly charges a standard 3% fee from rental managers/owners for its brokerage. However, sometimes, this amount can be higher. For instance, an elevated commission applies to Airbnb Plus homeowners, short-stay rental properties in specific regions like Italy, and accommodations that incorporate Super Strict Cancellation Policies.
The host’s toll is calculated from the booking subtotal that consists of the night rate plus any optional additional charges a host establishes for the offering (such as a cleaning or pet-friendliness fee). In spite of that, a host fee does not involve Airbnb fees and taxes. Arithmetic is simple: if a guest pays $100 to book your property through Airbnb, the platform will take its share of $3, so you will ultimately get $97 upon a completed deal.
Guest Service Fee
As a rule, guest service payments hover at the mark of 14.2% of the deal’s subtotal that presents the final price of the booking + a cleaning fee + any other additional guest charges (if applicable), excluding Airbnb fees and taxes. The final charge will depend on various factors. Guests can see the final fee when making a reservation and also when confirming the payment.
Host-Only Fee Scheme
This structure is very beneficial for guests – who will face no charges from the platform – and not so cost-effective for homeowners who now have to take the burden of Airbnb service commissions on their own shoulders.
Under the Host-Only Fee approach, the entire fee amount is abstracted from the payment to the owner. Usually, it revolves around 14-16%. Nevertheless, Airbnb Plus hosts or homeowners with Super Strict Cancellation Policies can encounter even a heavier charge. Curiously enough, this tariff for hosts in mainland China is only 10%.
So, if you adhere to this model, you will generally pay $14-$16 as a host fee from every $100 you earn with the help of Airbnb.
While the host-only fee scheme is optional for most individual entrepreneurs, it is mandatory for those hosts who lease out hotels/inns, and also for those who list on Airbnb through special linked software (for example, who use a channel manager or other program application to connect to the Airbnb platform).
However, even this strict rule has certain exclusions. Such as, software-linked hosts whose listings are primarily found in Canada, the United States, Argentina, Mexico, Uruguay, Bahamas, or Taiwan are not mandated to stick to the host-only fee scheme. Instead, they still enjoy the freedom to select between the split and host-only modes.
Things to Consider About the Host-Only Fee Model
At first glance, the host-only commission looks scary as it grabs a significant part of your earnings from Airbnb. Still, good has come out of evil.
Firstly, if you choose to save your potential clients from the necessity to pay a percent to Airbnb, you will look more reliable and attractive in the eyes of a prospect. Moreover, this will give you an edge over rivals who opt for a slit-fee regime.
Guests that are freed from a service commission have peace of mind that they will not eventually encounter any “bad-surprise” or hidden charges and the pricing remains clear and transparent. So even though all service charges will be your only responsibility, you may end up with an increased flow of reservations that will help to recoup these expenses. After all, you can always slightly raise your nightly rate to cover the cost of Airbnb commissions.
The good news is that if you choose a host-only fee model, Airbnb will put a special badge on your listing page to let travelers know they are free from paying a service charge if they choose your rental.
Secondly, the given model is massively employed by other popular online accommodation brokerages including Booking.com and Expedia. So a host-only fee principle allows you to better keep track of your pricing (the price you settle will be the exact total payment users see). It also helps you display the same rates for your vacation rental properties across all sales channels where you advertise.
Even if you drift toward a host-only fee scheme, you still can include an extra cleaning commission to your offer to be paid by the guest. A cleaning fee is a great way to defray the costs of maintaining and repairing your rental and preparing it for the next stay. Charging a cleaning fee from your end-user means that you will not have to spend your hard-earned money on keeping your rental property lovely, leaving more revenues to be used for your own pleasures.
Still bear in mind that introducing an extra cleaning payment will affect the client’s booking total. Make sure you do not overcharge; otherwise, your vacation rental will no longer appear so attractive to a potential guest. Consider setting a minimum cleaning charge as not to scare away the prospects, yet mitigate your cleaning expenses.
Does Airbnb Impose Other Charges On Hosts?
Listing on Airbnb implies paying a host service fee only. As a vacation rental host, you are unlikely to pay any other commissions except those mentioned in this article. However, pay attention to the fact that homeowners with Airbnb Luxe properties may pay a higher commission of up to 5% on their luxurious offerings.
A bit different fee structure is established for so-called Airbnb Experiences where a deduction from the host’s payout can be as high as 20%. An Airbnb Experience is an activity or entertainment that can be organized or provided by a property homeowner during the stay.
Depending on the jurisdiction, VAT may be added to all the above-mentioned fees. The service charge will already include VAT where applicable.