I wanted to dive in and see what kind of fees I’m paying as an Airbnb host, so I did a little research and was surprised by what I discovered.
So what does Airbnb charge hosts and property managers?
Property managers or hosts may choose between two fee structures: A shared host and guest fee or a host-only fee. If the shared host and guest fee is chosen, the host is charged 3% of the booking price. If the host only fee is chosen, the host is charged from 14% to 20% of the booking price. These options let the host determine how the fee scale will be set up.
It was good to know that there are options available and that I can determine my own fee structure. I also learned that if I choose to offer an experience to my guests, there will be a 20% fee charged for that through Airbnb. Knowing a little bit more about the different fee structures will help me determine the best option for me.
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Shared Airbnb Host and Guest Fee
If an Airbnb host chooses to use the shared host and guest fee option, he or she will be charged 3% of the booking fee. This percentage can be a bit higher in Italy or in Airbnb’s with strict cancellation policies. Generally though, if you are looking to rent out your Airbnb within this pricing structure, you will pay 3% to Airbnb.
In this structure of payment, the guest is responsible for a fee of up to 20% of the booking price. There are several factors that play into how much of a percentage will be charged to the guest. Length of stay, the subtotal for the reservation, and other characteristics come into play. Generally, the higher the reservation costs, the lower the percentage the guest will be charged by Airbnb.
By using the shared host and guest fee, the host is able to pass on some of the Airbnb platform costs to the guests. If you are more concerned with your bottom line and want to run your Airbnb as cost-efficiently as possible, this may be the best choice. Still, you have to take into consideration that guests may be less likely to book an Airbnb where they are responsible for coughing up more of the cost.
Airbnb Host-Only Fee
If you choose to structure your Airbnb bookings with the host only fee, you will be charged between 14% and 20% of booking costs. This total can be 2% higher if you have a very strict cancellation policy. The percentage of the fee you pay will depend on factors such as reservation subtotal and the length of your guest’s stay.
The host only fee allows for more competitive pricing with hotels and other rental properties. In this structure, the host is carrying the full cost of using Airbnb. If you are a host, this means your rental rates will be lower. This will be more attractive to potential guests. On the other hand, you are assuming a much higher charge with Airbnb.
Airbnb hosts have to weigh their options to see which fee structure works best for them. If you want to appear more hospitable and lower costs for guests, you may want to go with the host only fee. If this is not practical for you, and you need the guest to assume more of the Airbnb costs, the shared host and guest fee may be the better option for you.
Airbnb Experience Fees
If a host offers an experience for their guests to book and pays for ahead of time, the Airbnb service fee for the experience is 20%. The fee is waived for non-profits who use the Airbnb platform. The 20% fee is deducted from the payment that Airbnb makes to you as the host. Guests are not charged any service fees on experiences.
Experience fees are used to cover the products and support offered by Airbnb. While hosts are not required to offer experiences, those that do pay 20% of their experience profit as a fee to Airbnb.
Why Are These Airbnb Fees Charged?
Airbnb uses the fees charged to hosts and guests to maintain their internet platform. By using the Airbnb platform, you are sure to get more bookings than you would advertising on your own. In essence, as a host, your fees are paying for your property to be widely advertised. The reward you reap will be in the form of more bookings.
The Airbnb platform also renders your services such as payment processing. In this way, you do not have to deal with accepting cash or providing your own credit card processor. You have a clean channel of income which you can easily report for tax purposes. Your service fees as a hosts go to maintaining these functions of the Airbnb platform.
I was surprised to find out there are two fee structures. I can choose the shared host and guest fee if I am not too worried about the excess costs turning away my guests. Using this fee structure will increase my bottom line. If I choose this structure, I will only be charged 3% of booking costs by Airbnb
If I want to have more bookings and make renting my property more appealing to guests, I can choose the host only fee structure. In this case, I will pay 14% to 20% of the booking fee to Airbnb. My cost will be higher, but I will be able to offer more competitive rates to my guests. If I choose to offer an experience, I will be charged 20% by Airbnb on the experience.
So now I can weigh which fee structure will be most beneficial to me and whether or not it will be profitable for me to offer an experience at some point in the future.
What is the Airbnb Host Guarantee?
This is another benefit that is covered by Airbnb service fees. The guarantee provides for up to $1,000,000 in protection for the host’s property in the event that damages exceed the guest’s security deposit. This guarantee can also be used if you did not have a security deposit in place. The guarantee excludes coverage for certain valuables.
Does it Cost Anything to List a Property with Airbnb?
It does not cost anything to place a listing on Airbnb. You are only charged when a guest makes a reservation and makes a payment through Airbnb. Your service fees and experience fees are taken out before you receive payment from Airbnb. This means no costs upfront for the host!
How do I Determine What the Booking Price for my Listing Should be?
You are free to determine your own price when listing your property with Airbnb. The best way to determine where your price should fall is to look at the prices of comparable properties on Airbnb. See what others are charging for similar accommodations so that you can offer competitive pricing.