Airbnb is the most popular platform for vacation rentals, with millions of hosts and guests. But what Airbnb host fees do you need to pay?
When you own a short term rental, your ultimate goal is to bring as many bookings as possible in order to maximize occupancy, revenue, and profitability. To do that, you need to list your property on Airbnb, as millions of travelers are looking for accommodation there. However, before doing that, you need to know that hosts incur specific fees and costs to use the listing website.
Table of Contents
- Airbnb Host Fees Overview
- How Much Do Airbnb Host Fees Cost?
- Does Airbnb Charge Hosts Other Fees?
- How Can You Make More Despite the Airbnb Fees for Hosts?
In this article, we aim to help beginner investors understand and calculate the fees they will need to pay to use the Airbnb platform. It’s important to know the pricing structure and how it will affect your income, cash flow, and ROI before starting.
To this purpose, we’ll review the Airbnb pricing structure and options, the size of the fees, how they are calculated, and the included services. Then, we’ll look into ways to lower the impact of these fees and make plenty of money from your vacation rental. We’ll also show you how the Mashvisor tools can help you optimize the performance of your short term rental property.
Let’s learn what Airbnb host fees are all about!
Airbnb Host Fees Overview
Airbnb provides a service to short term rental property investors and charges a fee for this service. The good news is that this fee is calculated from the booking subtotal when a guest makes a reservation and stays at your property. It is automatically deducted from your payout before you receive it.
It means you only pay the platform when someone books your rental; you don’t pay for anything if you don’t have bookings.
Airbnb uses the money collected from owners for the following:
- 24/7 customer support
- Listing marketing on Google, social media, and other channels
- Host and space protection
- Host educational sources
Related: The Ultimate Beginner’s Guide to Airbnb Analytics for Hosts
How Much Do Airbnb Host Fees Cost?
Airbnb has two pricing structures from which most Airbnb hosts can choose: split-fee and host-only fee structure.
The split-fee structure is what most Airbnb hosts select. When the website was initially launched, that was the only option.
If you opt for the split-fee structure, both you (the owner) and your guests pay an Airbnb service fee. The website deducts the fee from your payout, so you don’t have to do anything to cover your dues. Airbnb also charges the guest a guest service fee.
Under this structure, these two fees apply:
- Host Service Fee: As an Airbnb host, in most cases, you pay a 3% service fee to Airbnb. It can be higher for Airbnb Plus Hosts and Listings and hosts with super strict policies for when a guest cancels. The fee is charged on the booking subtotal, including the nightly pricing, cleaning fee, extra guest fee, pet fee, and all other fees, excluding Airbnb fees and taxes.
- Guest Service Fee: Most Airbnb guests pay a service fee of 14.2% or less. It is also derived from the booking subtotal. The exact rate of the service fee depends on several factors. Airbnb guests will see the service fee details on the website after checking out and before booking so that they can decide if this fits their budget or not before confirming.
Host-Only Fee Structure
The host-only fee structure is a new addition to Airbnb host fees. It’s a simplified pricing method that Airbnb has introduced relatively recently.
The host-only fee structure means the website deducts the total service fee from the host payout and does not charge a service fee to guests. The host-only cost varies between 14% and 16% of the booking subtotal.
So, if your monthly income from your Airbnb investment property is $2,000, you’ll pay between $280 and $320 in Airbnb host fees, while your guests pay $0 to the platform. For comparison, under the split-fee structure, you only have to cover $60, and guests will pay up to $284.
While the host-only fee pricing is optional for most Airbnb hosts, it’s required for hotels and hosts who use a channel manager or other software to link to Airbnb. Software-connected Airbnb hosts with US, Canada, Mexico, the Bahamas, Uruguay, Taiwan, and Argentina listings are exempt. It means hosts can still choose between the split-fee and host-only fee structure.
Why would a host ever choose a model where they need to pay a higher fee? Because it comes with certain advantages.
Benefits of the Host-Only Fee Structure
First, Airbnb says that if you pay for the guest’s service fee, you may get more bookings. The idea is that guests like clear, transparent pricing without surprise fees. Airbnb will attach a special tag on your listing to tell renters that you pay their service fee which will attract more reservations for your listing compared to competitors who don’t offer this.
So, even if you pay a higher service fee, you’ll get more bookings, which can help boost your Airbnb occupancy rate and make more money on the platform. Eventually, this pricing model helps enhance the performance of your Airbnb property.
Second, major online travel companies, such as Expedia, use the host-only fee structure. Going for this option gives you more control over your property’s prices. Plus, you can show the same rate for your rental on multiple channels. This ability can get you more money for your rental over time.
All in all, using the host-only fee structure ensures your Airbnb has competitive rates at all times. Plus, the listing may be more appealing to travelers accustomed to no service fees on other platforms.
However, you will see a fee increase from 3% to 14% or even 16%. You have to factor this into your Airbnb rental property analysis and see how it affects your bottom line before you decide to cover the costs on behalf of guests.
Does Airbnb Charge Hosts Other Fees?
The Airbnb host fees outlined above are the only fees and charges that owners need to pay to use the listing platform.
The only two exceptions are Airbnb Luxe hosts and Airbnb Experiences. Hosts using Airbnb Luxe, an exclusive program offering luxury retreats, pay between 3% and 5% of their total booking price. Meanwhile, hosts cover a 20% service fee on Airbnb Experiences.
How Can You Make More Despite the Airbnb Fees for Hosts?
Benefiting from the exposure and marketing services of the largest vacation rental platform comes at a cost. In some cases (like Experiences), Airbnb host fees can reach up to 20%, which can have a sizable effect on your revenue, cash on cash return, and cap rate. However, there are certain things that you – as a host – can do to improve your income and profit despite all the fees that you need to pay.
Here is how to enhance the ROI of your Airbnb business:
1. Buy a Top-Performing Property
A profitable Airbnb investment journey starts with purchasing the best property. If your rental can bring in a lot of bookings at a high rate, you will not care much about the fees you need to pay to the platform. Plenty of cash flow will be left for you to enjoy at the end of the month.
To find the best short term rental markets and the top properties, you can use the tools available on the Mashvisor platform. The Market Finder can help you locate the most profitable areas for vacation rentals for sale based on your budget and other factors and requirements. With the Property Finder, you can find the top-performing opportunities in any market with a few clicks of a button.
Meanwhile, the Airbnb Calculator helps you estimate what rental income you can expect from a property before buying it. After all, if your Airbnb will bring you $5,000 per month (as opposed to $2,000 generated by a less profitable property), what do you care about the few hundred dollars you’d need to pay in fees?
To start searching for the best Airbnb markets and properties for sale across the US market, sign up for a 7-day free trial of Mashvisor followed by a 15% discount.
2. Optimize Your Airbnb Pricing Strategy
Another way to maximize your revenue despite the Airbnb host fees is to apply a comprehensive pricing strategy for your listing. First of all, you need to set a competitive rate based on what comps in the area are asking for. It will help boost your ranking on Airbnb and get more bookings, as guests would rather pay a bit less for a similar property.
Second, you need to continuously adjust your pricing to reflect ongoing changes in supply and demand in the local market. It can be attributed to high and low seasons, special events, weekends, etc. This is known as dynamic pricing and helps you strike the right balance between daily rates and occupancy.
While this would take a lot of Airbnb market research and analysis, Mashvisor has a tool to help optimize and automate the entire process. The Dynamic Pricing tool allows investors to connect their Airbnb listings to their Mashvisor account to get readily available Airbnb data on the rates that competitors charge and the results they get.
Moreover, there is the option to allow the tool to automatically adjust your nightly rates on your Airbnb listings directly. In this way, you can maximize your income and make it passive.
Related: Which Is Better: Airbnb Smart Pricing or Mashvisor Dynamic Pricing?
3. List Your Property on Other Channels
Getting your Airbnb listed on other channels can be an efficient way to get more guests in your Airbnbs. It might also help you save on host fees, depending on the specific platform.
Some of the best Airbnb alternatives are:
Booking.com attracts more than 400 million monthly visitors and is one of the top accommodation websites worldwide. It’s free to list your Airbnbs on Booking.com, and your listings will be posted on Google Maps and Agoda, among others.
The website’s listing services cost about 15% per booking, which is pricier than the Airbnb host fees. But you don’t pay a commission on a booking if the guest doesn’t show up.
Another benefit is that guests can book your Airbnb instantly, without the need to communicate with them. The platform allows you to set your prices and availability and open and close your listing whenever you wish.
Last, Booking.com doesn’t charge fees to guests, so your rental might look more attractive and bring more reservations.
TripAdvisor goes back to 2008 when it bought FlipKey and became a massive resource of restaurants, bars, attractions, and vacation rentals. Listing your Airbnb rental on TripAdvisor can be lucrative as there are about 400 million travel reviews on TripAdvisor.
Booking on TripAdvisor is convenient for guests as they get access to short term rentals, flights, rental cars, and other services from a single place.
TripAdvisor charges owners a 3% fee, while guests have to pay 12%.
If you’re renting out a spare bedroom rather than an entire home, you can consider Homestay.com. The website has 63,000 rooms available in 176 countries. It focuses on private rooms and single traveler accommodations.
You can set your own price on Homestay. The platform charges guests a 15% booking fee based on the price of your rental.
4. Implement a Channel Manager
A channel manager is a vital tool for an Airbnb host listing their property on multiple platforms. The tool syncs property listings, calendars, and availability across all your advertising channels.
Some benefits of channel managers include:
- No double bookings
- Reduction in the time you spend on listing and calendar management
- Communication with your guests through one inbox
- Synchronization of all calendars in real time
5. Create Your Own Booking Website
You can reduce your dependence on Airbnb and the fees you have to pay to them by building your own booking website. Having your booking website means you can get direct bookings. These are essentially free because you don’t pay Airbnb owner fees or commissions to booking platforms. It means more cash going into your bank account.
Also, you have direct control over your Airbnb marketing. For example, you can gather guest emails and target them to rebook in the future.
Related: Top 7 Qualities of the Best Real Estate App for Property Investors
6. Participate in Vacation Rental Forums
Joining short term rental investment forums lets you communicate with other Airbnb hosts. Doing so helps you boost the performance of your investment property by learning from others. And you can also indirectly market your rental properties.
Commenting regularly in the vacation rental community will encourage others to send you business from time to time. So, it’s wise to build your credibility online in these forums.
7. Make Special Offers to Guests
Your Airbnb business can benefit majorly from offering special offers to guests. A surefire way to get repeat business is to offer a 10% discount to previous guests on their next visit if they bring friends or family along.
Moreover, you can deploy special pricing for last-minute reservations, as it’s better to get your property booked for a slightly lower fee than to keep it empty. You should lower your nightly rates for long term stays, too, as you can save on marketing costs and cleaning.
8. Work With a Lifestyle Blogger
This method can take effort, but it’s a good option for long term growth, and most Airbnbers in your market are probably not doing it.
You can find a lifestyle blogger in your area with a large social media following. Contact them and offer a free stay on your property. In return, ask them to review your property and post about it.
It may take a few attempts until you find an influencer willing to do that, but it will be totally worth it. Your listing can go viral and continue bringing reservations for years with no further marketing and advertising.
Starting a Profitable Airbnb Business
Understanding Airbnb host fees is a critical part of the investment process. Armed with this information, you can make a data-based decision to maximize your income and profit.
Using the tools available on the Mashvisor Airbnb analytics platform is another great way to get started on the right foot.
With the help of the Market Finder, the Property Finder, and the Airbnb Calculator, you can find a property for sale that has the potential to turn into a profitable business opportunity. Meanwhile, the Dynamic Pricing tool can help you optimize and automate your pricing strategy post-purchase to always make the most money from your short term rental.
While Mashvisor cannot lower the Airbnb fees, it can make so much money for you that you don’t even care about the charges you need to cover on Airbnb.
To learn more about how Mashvisor can help you start and run an optimal Airbnb business, schedule a demo with our team of experts.