Airbnb started life in 2007 on the living room floor of a San Francisco apartment. Fast-forward nearly fifteen years, and it has revolutionized the travel industry.
“Let’s Airbnb it” has become a common phrase for travelers and holidaymakers looking for unique accommodation experiences. And it’s a more exciting alternative to a regular hotel stay.
This meteoric rise in popularity has arguably made Airbnb one of the forbears of the sharing economy and has helped its value grow to an estimated $113 billion in 2021. But how do the Airbnb host fees impact those looking at starting up an accommodation? Once a cheaper option for guests, the service fees are increasing as the market changes.
If you want to use Airbnb to find as many guests as possible, you’ve probably got a few essential questions. “How much does Airbnb charge hosts, and are there any accommodation alternatives to save money?” If you are a guest that is curious about what these new Airbnb fees are, stay tuned. We’re breaking down Airbnb fee structures so you can focus on your vacation rental experience.
How Much Do Airbnb Hosts Make?
Are you considering the option of hosting your property? Then, the question “How much do Airbnb hosts make?” is top of mind.
Across the USA, the average Airbnb host earns $99 per night for a private room and $242 per night for a unit with up to 4 guests. It’s thought that a guest checks into an Airbnb listing every single second of the day.
This sounds like rich pickings for a host payout. But it comes at a cost — the service fee. This is a charge which hits both the guest and the host.
What Percentage Does Airbnb Take With Guest and Host Fees?
Search results don’t hide the service fee from potential guests, but it takes second fiddle to the per-night price for booking. The reservation process tends to display this cost in a larger typeface.
These numbers undoubtedly catch a few people when they decide to proceed and book, but Airbnb has tweaked the user interface to make the pricing more transparent.
You might be wondering, “What percentage does Airbnb charge guests? And, how much does Airbnb charge hosts?” Airbnb designed the service fee to cover the cost of Airbnb’s advertising service and its 24/7 customer support. Here’s how the Airbnb service fee percentage breaks down:
- Host pays between 2-5%
- Guest pays between 5-18%
These numbers vary wildly for a few reasons.
For instance, the host service fee depends on whether they’re on the Airbnb Plus program and if there’s a strict cancellation policy in place. There are also different fees depending on where you are in the world.
Guests pay different fees depending on their location, but the typical charge is 14.2%. The host can also charge guests a cleaning service fee. They add this to the total cost during the booking process.
Airbnb Charges For Hosts: 2 Types of Service Fees
Following some changes in 2020, there are now two types of Airbnb fees to consider. Choosing the right type of service fee as a host primarily depends on your audience, business model, and how you’d like the guest booking process to look. Still wondering how much does Airbnb take? Let’s break down the host-only fee and split fee.
Host-only Fee Structure
This type of Airbnb host service fee is the default whenever a new host creates an account. The hosts pay for the entire Airbnb service fee. This means the guest doesn’t have to pay an additional guest fee when placing a booking. The minimum host service fee starts at 14% but can increase to 20%.
The split fee matches the old Airbnb model explained above, where the guest and host share the service fee. The host pays a small percentage deducted from the total booking amount, and the guest pays more.
Airbnb charges service fees to earn a commission. Raising Airbnb host fees has caused proprietors to add additional service fees. You might see additional guest fees in your booking subtotal, like a cleaning fee, booking fee, or even a hot tub fee — depending on what the location offers.
Wondering why guests have a higher Airbnb charge for service fees? Airbnb wants to attract more hosts and guests. Guest service fees help hosts charge less for a nightly rate. This allows for locations to have more bookings. This leads us to our next topic, Smart Pricing through Airbnb.
What Is Airbnb Smart Pricing?
Airbnb offers a feature called ‘Smart Pricing,’ which is designed to help guests settle on fair and profitable prices for their accommodation.
It also enables hosts to compare their pricing against others and therefore create a competitive pricing structure. The ultimate goal of Smart Pricing is to bring more bookings to the host and raise their profitability.
With Smart Pricing turned on, the pricing for your accommodation will automatically fluctuate depending on a number of factors. Typically based on these five aspects:
- Seasonality and whether it is high or low
- The volume of searches for a place to stay in your area
- Number of views and bookings you’re receiving
- Amenities you add or take away
- Your property’s review performance
Like every algorithm, Airbnb won’t reveal all of its secrets, but it’s safe to assume that it bases pricing suggestions on the above factors. This gives hosts plenty of strategic points to focus on.
How Much Does Airbnb Take With Smart Pricing?
You might be asking, how much does Airbnb take with smart pricing? The host service fee still applies, regardless of your pricing changes. Property management can still charge additional guest service fees as they would without smart pricing.
Airbnb wants properties to be booked as much as possible to earn a commission. This could be at the expense of hosts, who might charge lower rates with Smart Pricing than they would ideally set on their own. Hosts will see a range of accommodation pricing for guests causing inconsistent income for that same property — while Airbnb still receives the same commission.
The good news is that you can set minimum and maximum pricing thresholds for ultimate peace of mind. This option is ideal for brand-new listings to boost their number of bookings and potentially obtain ratings for their location.
Setting pricing thresholds for each property can be tedious for hosts that own multiple listings. These owners should look into channel management systems to maximize revenue.
Channel managers can regulate reviews, guest communications, and revenue management for listings on different sites. Use a channel manager to stay on track with Airbnb host fees and attend to your business needs in one place.
How Does the Cancellation Policy Impact a Service Fee Refund?
Dealing with no-shows is a part of the hospitality industry. But cancellation policies are put into place to ensure rooms stay booked as much as possible.
Another question you might have about service fees is how you can get a full refund for them. Fees cover a wide range of services when it comes to booking vacation rentals. Can Airbnb guests get a full refund, and what happens if the host cancels your reservation?
Every direct booking website has its own policies. Airbnb has various cancellation policies that depend on the Airbnb host. Property listings have their own cancellation policy that the host shares in their listing. One host could have a different policy depending on the location and type of stay.
The Airbnb guest service fee is refundable if the guest cancels within the time frame set within the policy for the booking location. However, there are a few cases where a cancellation policy could be overridden by guests. In general, it is if a guest needs to cancel due to extenuating circumstances or if the terms of service were violated.
If an Airbnb host cancels a reservation, then guests will receive an email with refund information. The total service fee should be shown in your refund information. Refund times will vary depending on what they used to pay with their Airbnb account.
What Are Alternatives to Airbnb?
As a property owner, you might be interested in finding alternatives to Airbnb. There are many worth checking out. Beyond the obvious (Booking.com), we’d recommend these five:
- Flipkey. Ideal for hosts who accept smaller group bookings.
- VRBO. More refined than Airbnb, Vrbo features polished listings and hosts who usually do this for a living.
- Outdoorsy. Offering mobile rental accommodation? This is ideal for you and built specifically for this growing sector.
- Homestay. This site targets travelers who don’t mind living under the same roof as the host, so if that’s your business model, it’s worth a try.
- Sonder. Sonder compares its selection of rentals to luxury hotel experiences and might suit your accommodation perfectly.
The best thing to do is to spread your wings and try out more than one online source of bookings. Airbnb is just the start, and you could find a far more relevant audience on one of these niche websites.
How To Avoid Airbnb Service Fees for Repeat Bookings
As noted above, using as many different channels as possible for your rental accommodation is vital if you’re to attract plenty of guests.
Now you know how much Airbnb charges hosts, it’s a great idea to learn how to avoid Airbnb service fees if you can. Another way to ensure you don’t pay more than you should for reservations is to focus on repeat bookings.
Think about it — why would you want to pay a second round of commission to Airbnb for a repeat booking? Airbnb helped you find the guest originally, but you put the hard work in and made their stay so great they decided to return.
This one should be all yours, which is why it’s vital you collect guest email addresses and build a database of existing customers. You can do this ethically and with their interests in mind if you use WiFi marketing software to capture their email address upon login. Providing you explain that, in doing so, you’ll have the ability to send them exclusive offers in the future, you should get plenty of sign-ups.
By building your own database of guests, you can send personalized offers for return bookings and avoid the commission associated with services like Airbnb.
As with everything in hospitality, it’s a balancing act, so make sure you divide your online booking strategy equally between the likes of Airbnb and your own direct booking methods.
Are you interested in finding a guest WiFi solution? Check out Beambox to review guest analytics and boost your WiFi marketing strategy. Learn more and start your thirty-day free trial and turn your free guest WiFi into a machine for growth.