With close to 8 million active listings, Airbnb is by far the largest and most widely used short term rental website. To maximize exposure and generate continuous bookings, listing on Airbnb is a must. However, the platform charges certain fees to hosts that affect their revenue, cash flow, and profit.
This article provides a detailed breakdown of how much Airbnb takes from hosts and for what services these fees are used. It shows how property owners can calculate their due charges and how Airbnb fees compare to the fees charged by other booking channels.
How Much Airbnb Charges Hosts
Airbnb charges hosts a single service fee in exchange for the services that it provides to them. In the vast majority of cases, the Airbnb service fee is equivalent to 3% of the booking revenue subtotal. This refers to the nightly price plus additional fees charged by the host to guests, excluding Airbnb fees and taxes.
Nevertheless, there are certain cases in which the Airbnb website charges significantly more. The service fee can reach as high as 16% or more, but this does not apply to most individual hosts.
Going back to the 3% flat service fee, let’s take a look at a quick example to visualize the quantity of Airbnb fees and how they affect the host’s revenue.
For instance, we have a property that is listed for $300/night and charges a cleaning fee of $70/stay. For a 3-night stay:
Booking Subtotal = 3 x $300 + $70 = $970
Airbnb Service Fee = 3% of $970 = $29.10
Host Payout = $970 - $29.10 = $940.90
In this case, Airbnb will take from the host a service fee equivalent to $29.10, and the host will earn $940.90.
Airbnb Fee Structure Options for Hosts
The Airbnb platform runs two different fee structures in terms of how fees are split between hosts and guests: Split-fee and Host-only fee.
Split-Fee
The split-fee method is the more widely used one and applies to the majority of short term rental owners. The Airbnb service fee is shared - or split - between the host and the guest. Under this arrangement, most Airbnb hosts pay a flat fee of 3%, but it might be a bit more in particular cases, like some listings in Italy. The fee is calculated on the booking subtotal.
Host-Only Fee
The host-only fee model is rarely applied to vacation rental hosts. It is obligatory for traditional hospitality listings, such as hotels and serviced apartments, and for software-connected hosts whose listings are located outside the US.
With this structure, the entire Airbnb fee is covered by the host, and the total amount reaches 14-16% of the booking subtotal. The rate is lower for stays of 28+ nights and higher for hosts with Super Strict cancellation policies.
How to Calculate Airbnb Service Fees
It’s very easy and straightforward to calculate how much Airbnb will take on a particular reservation. All you have to do is to gather the right numbers and apply a quick formula.
The formula for calculating the Airbnb fees for hosts is:
Airbnb Service Fee for Hosts = 3% of Booking Subtotal
The booking subtotal includes the nightly prices for the entire reservation, the cleaning fee, the pet fees, the extra guest fees, and any other additional fees that the host charges guests. The booking subtotal excludes the Airbnb fees and applicable taxes.
Let’s take a look at an example to see how the formula works in real life. A certain listing has the following pricing structure, and we want to calculate the Airbnb fees for a 4-night stay with 2 extra guests and a pet.
- Nightly price: $350/night
- Extra guest fee: $80/night per guest
- Pet fee: $70/stay
- Cleaning fee: $60/stay
Booking Subtotal = 4 x ($350 + 4 x 2 x $80 + $70 + $60) = $2,170
Airbnb Service Fee for Hosts = 3% of $2,170 = $65.10
Host Payout = $2,170 - $65.10 = $2,104.90
In this case, Airbnb will charge the host with a fee of $65.10 before tax.
The remaining $2,104.90 is the vacation rental owner payout.
It’s important to note that Airbnb fees are not subject to payment processing fees. However, they are VAT (value-added tax) inclusive where VAT is applicable to such fees.
Moreover, the Airbnb service fee on a stay is readily available on the platform. All you have to do is to visit the Earnings section, select the reservation, and check out the Airbnb Service Fee under Payout.
What Airbnb Hosts Get from Airbnb in Exchange for Fees
Airbnb takes a fee from hosts in order to provide certain services that ensure the success of their short term rental listing.
Airbnb provides the following services to hosts in exchange for the fee paid to the platform:
- Listing: Hosts get to list their property on Airbnb, the single best short term rental website out there. An Airbnb listing has the potential to reach millions of guests worldwide as long as it is optimized to rank high.
- Marketing: Airbnb markets listings to guests on Google, social media, and other channels for additional exposure.
- 24/7 customer support: The Airbnb customer support team is available to address host questions and concerns around the clock.
- Educational resources: The Airbnb website offers a rich library of educational and tutorial articles and videos that help hosts improve their listings, attract more bookings, and succeed.
- Access to AirCover: All Airbnb listings benefit from automatic enrollment in the Airbnb AirCover for Hosts program. This insurance provides damage protection of up to $3 million, host liability insurance of up to $1 million, and experiences liability insurance of up to $1 million. This means that your property is protected from damage and you are protected from general liability in case of an accident during a stay at your rental.
- Airbnb Smart Pricing: Hosts have the option to use the Airbnb-built dynamic pricing tool - Smart Pricing - that automatically optimizes daily rates based on demand. This tool can be switched on or off, depending on the host preference. Keep in mind that many hosts complain that the Airbnb Smart Pricing focuses exclusively on maximizing occupancy which sometimes leads to unreasonably low nightly rates. So, using one of the best third-party Airbnb pricing tools could be a better option.
- Guest verification: Airbnb verifies the identity of booking guests for every single stay. This includes the verification of some personal information. This is done in order to guarantee the safety and security of hosts and properties and to promote trust between hosts (who are also verified) and guests.
Considering the multiple services offered by Airbnb, the fees that they charge to hosts are worth it. After all, hosts cannot get the same level of exposure and protection for a smaller fee.
How Airbnb Takes Fees from Hosts
The Airbnb host fee is directly deducted from the host earnings for each reservation. This means that hosts don’t need to do anything to pay applicable fees.
Airbnb Charges vs Other Listing Channels
Airbnb is not the only listing platform that takes fees from hosts. To the contrary, all booking channels apply certain fees needed to cover their operations.
Vrbo Fees for Hosts
With Vrbo, hosts can choose between pay-per-booking fees and an annual listing subscription, with the former being the more prevalent option.
With the pay-per-booking listing model, hosts pay a 5% commission fee on the rental amount and additional fees, such as cleaning fee, extra guest fee, pet fee, boat fee, and others. In addition, a 3% payment processing fee is charged on the total payment amount including taxes and refundable damage deposits.
This means that the total Vrbo fees for hosts amount to about 8% of booking revenue, significantly more than what Airbnb takes from hosts.
Moreover, the commission fee might exceed 5% for bookings coming from Vrbo’s distribution partners. Meanwhile, the payment processing fee is not applied to hosts who use a property management software (PMS).
Alternatively, with the listing subscription, hosts pay an annual fee to list on Vrbo and generate reservations. The platform does not specify the annual subscription amount, and third-party sources quote rates ranging between $500 and $700/year. This model is a better option for the owners of larger, luxury properties that have high daily rates and strong occupancies.
Vrbo uses host fees to cover the cost of secure transactions, product development, and 24/7 customer service.
Booking.com Fees for Hosts
Booking.com operates a commission-based model so that hosts pay a percentage of each reservation which they get via the platform. The commission is charged on the reservation costs plus any additional fees, such as cleaning fees and service charges, in addition to VAT. Local taxes are excluded.
Unlike Airbnb, Booking.com doesn’t deduct fees directly. Instead, it sends an invoice to the host after the end of the month with all applicable commissions.
Booking.com fees for hosts vary by location and range between 10% and 25%, with an average commission of 15%. Once again, this is significantly more than the corresponding Airbnb fees.
TripAdvisor Fees for Hosts
With TripAdvisor, owners can choose between free listings and annual listings.
For free listings, bookings are made via the TripAdvisor website and are subject to a 3% processing fee which is calculated on the total rent including additional fees. After deducting this fee, the platform makes payments to hosts either through a bank transfer or PayPal.
For annual listings, owners pay an annual fee per property. Afterwards, they can decide how to receive payments from guests: through the TripAdvisor website or directly. Payments that go through the booking website pay a 3% processing fee.
The TripAdvisor fees for hosts are comparable to what Airbnb takes, but owners receive significantly less services.
Bottom Line
Airbnb takes an average of 3% of the booking subtotal from hosts. This fee is used to cover the services that the platform provides to vacation rental owners, such as listing, marketing, customer support, and protection. When compared with the fees charged by other booking channels, Airbnb fees appear to be competitive and to include a lot more services than those offered by other listing websites.
