How much are Airbnb host fees and what are the additional costs associated with listing your short term rental on Airbnb?
Renting your property out as a vacation rental can be a great way to increase revenue. This being said, this style of investment creates additional work and costs, you’ll need to manage professional cleaning, provide additional services to your guests, and of course, you’ll have to regularly find new tenants. Where you advertise your short-term rental then, will have a big impact on both the frequency and duration of bookings and dramatically impact your bottom line.
Airbnb is perhaps synonymous with short-term rental listings and for good reason; few other platforms can compete with over 1 billion booked stays and 5.6 million global listings in 100,000 cities. This is music to a landlord’s ears, as bookings are ultimately what will make or break your rental.
In this article, we take a closer look at Airbnb host fees and the additional costs associated with listing on this platform.
Airbnb provides landlords with an unrivaled potential customer base to which they can advertise their rentals. However, Airbnb comes with associated fees which cover services such as:
Airbnb currently offers two types of host service fees. These can be categorized as split fees and simplified pricing.
As the name suggests, split fees mean that the total service fee is divided between both the guest and the host.
The host pays a flat rate of 3% of the total booking cost and the guest pays a percentage of their reservation fee (this is somewhere between 5-20% depending on the length of stay, the location, and the cost of the reservation to start with).
While Airbnb is secretive about its calculation methods, they state that guests typically pay 14.2% when split fees are used.
To benefit from split fees, the majority of your short term rental properties must be located in one of the following countries:
If your short-term rental properties are located outside of the locations listed above, your host fees will be calculated using the simplified pricing model.
In this scenario, hosts pay 15% for the service fees and guests do not pay anything.
Airbnb introduced this plan to give hosts more control over their rates and it is especially useful if hosts are posting their rentals on multiple platforms. Instead of trying to figure out what the associated costs and fees will be, the pricing is more transparent upfront. Airbnb also promotes that there is no service fee associated with the listing, making it more attractive to potential guests. According to Airbnb, hosts that chose simplified pricing saw an average increase in bookings by approximately 17%.
Hosts in the countries listed above can choose to keep split-fee pricing or change to the simplified pricing plan.
As Airbnb calculates the service fee based on both the guest and host payout, cleaning fees are included in this. Depending on which pricing structure you use, you should adjust your cleaning fee accordingly. For example, if you are using the simplified pricing model, you may need to increase the cleaning fee to account for the extra percentage that you are paying to Airbnb.
While Airbnb is a well-established player in the short-term rental game, you may be wondering how the Airbnb host fees compare with other listing platforms. Many landlords who manage vacation properties choose to list their properties on multiple platforms to extend their reach, so it’s worth looking into.
Like Airbnb, VRBO also has two different models for host fees. These are pay-per-booking and subscriptions. The subscription model incurs an upfront cost of $499 that covers listings for the year. Pay-per-booking fees, on the other hand, start from 8%. This includes a service fee of 5% and a 3% credit card processing fee. Like Airbnb host fees, the VRBO service fee goes towards product maintenance and development and customer service.
Booking.com, while popular for hotel bookings, is also a suitable destination for home or STR listings. They work on a commission basis, meaning there is no annual subscription plan available. The fee varies depending on your country but they state that the global commission fee average is 15%. They also have a commission calculator which can help you determine the service fee you will pay.
TripAdvisor can also be used to advertise short-term rentals. For free listings, they charge hosts a 3% commission fee per booking. This is calculated based on total rent and other fees you specify for your property for things like cleaning.
As you can see, host fees vary significantly depending on the platform you decide to use.
Whatever listing platform you use for your short-term rentals, it is important to accurately track your income and expenses, from rent received to service and cleaning fees. Purpose-built property management software like Landlord Studio allows you to easily manage your rental property accounting with bespoke report generation, digital receipt scanning, and bank feed integration.
The Airbnb host fee contributes to the smooth running of the invaluable services that Airbnb offer, from customer support to protection for your property, should any damage be inflicted on it. Depending on the plan you decide to use, you can expect Airbnb to take a percentage of 3% or 15%.