Airbnb, a little idea that began by laying out air mattresses for guests (the name comes from "air mattress B&B"), has disrupted the hotel industry. There's a lot to be said for listing your rental through this industry titan, such as the traffic Airbnb gets because of its huge inventory. But Airbnb is not the only game in town.
If you want to list through Airbnb, you'll likely do well, but you should probably find out the answer to the question "How much does Airbnb charge hosts?" because the fees might be more than what you wish to pay. Once you find out Airbnb's service fee, you can compare Airbnb with other vacation rental sites to determine whether Airbnb's benefits make it worth the cost. Airbnb hosts make $924 per month, on average. Whether you make more or less, you should understand what you're paying in Airbnb service fees.
The Airbnb service fee
Airbnb has a complex fee structure that depends on how you use the site. The structure is first broken down into two components:
- A shared host and guest fee.
- A host-only fee.
The host part of the shared host and guest fee
Most individual home hosts who use Airbnb fall under No. 1 above, the shared host and guest fee. In this fee structure, most hosts pay 3% of the nightly rate plus the cleaning fee and, if applicable, the additional guest fee. Both the cleaning fee and the additional guest fee are optional fees hosts can add to their listings. But if you add either, keep in mind that Airbnb will take a cut in the form of the service fee.
The 3% service fee could be higher in certain cases, such as if , such as if you have a "Super Strict" cancellation policy -- more on that below.
To find out your exact fee, such as whether it will be more than the 3% and how much more, you would need to look up your particular transaction history on Airbnb.com, select your reservation code, and then look for your service fee under "Payout."
The guest part of the shared host and guest fee
There is no standard fee your guests are charged by Airbnb, but the typical service fee is under 14.2%, figured the same way as the host fee: the nightly rate plus the cleaning fee and, if applicable, the additional guest fee. Guests will know their exact fee only during checkout just before they book the reservation.
The host-only fee
This fee applies to hotels or hosts running a hospitality business. It ranges from 14% to 20% with an additional 2% if you choose a "Super Strict" cancellation policy. The advantage of this structure is that businesses can control how much their guests pay, rather than having Airbnb decide.
And one more fee: an experience fee
If you offer an experience to go with your Airbnb reservation (Surf & Turf Street Taco Tour anyone?) and advertise it on Airbnb, Airbnb then charges you 20% of the price of the experience.
Airbnb cancellation policies
Airbnb has several cancellation policies that hosts can choose from:
- Long Term.
- Super Strict 30.
- Super Strict 60.
If you use one of the Super Strict choices, your host service fee could be more than the standard 3%.
Now that you know how much Airbnb takes in service fees, you can compare with other vacation rental sites.
Airbnb is not the only game in town
There's no arguing that Airbnb is a giant in the vacation rental industry. When vacationers need a place to stay, they tend to think of traditional hotels and then Airbnb, or sometimes even vice versa. As of 2019, Airbnb has more than 20% of the U.S. vacation rental business, and that is of an $87 billion industry. Pretty impressive.
But if you're looking to save fees, you might wish to consider the competition.
Other vacation rental sites besides Airbnb
It's helpful to know that Airbnb isn't the only game in town. Here are some other popular vacation rental sites and their fee structures.
Started in Amsterdam, Booking.com has been around since 1996. It has 65.5% of the European online travel agency market. This site is not transparent regarding how much hosts pay. Hosts are charged a commission for each booking, and you won't know what the commission percentage is until you get to the agreement step of the process.
Expedia Group (NASDAQ: EXPE)
Expedia Group, founded in 1996, started as an online travel agency. Today, it's a massive conglomerate with many subsidiary brands, such as Hotels.com, VRBO, trivago, HomeAway, Travelocity, Hotwire, and more. When you list with Expedia, your listing populates to all the partner sites. As with Booking.com, you won't know the percentage you need to pay to Expedia Group until you go through the contracting process.
FlipKey, founded in 2007, has been associated with the online travel behemoth Tripadvisor (NASDAQ: TRIP) since 2008. When you book with FlipKey/Tripadvisor, you pay 3%, which is deducted from your guest's payment. This is a cost-effective plan, but the property listings at 830,000 homes worldwide pale in comparison with Airbnb's more than 7 million.
Book on multiple platforms
To get the most eyes on your listing, you might consider advertising your rental property on several platforms. You can do this individually, or you can use an aggregator site, such as Smartbnb or others, that will put your listing on multiple platforms.
Consider Lodgify to help manage your bookings
No matter which platform you choose to market your vacation rental, you might want to consider using vacation rental software, such as Lodgify, to help manage your bookings. Not only could this sort of software make life easier for you, but having your own website helps you create your own vacation rental brand. Lodgify, at the time of this writing, seems to be the most well known vacation rental software company out there.
Lodgify helps hosts, even hosts with no technical knowledge, build a website optimized for both desktop/laptop and mobile use. People can book through your website, which syncs to Airbnb, Booking.com, and Expedia. You can also adjust rental rates, keep your calendars updated, and track and collect payments through your host website.
It costs $12 per month plus a 1.9% booking fee to use Lodgify. Or you can choose to pay $32 a month with no booking fee. If you have more than 100 vacation rentals, the plan differs, and you'd need to contact Lodgify for rates.
The bottom line
Besides traditional hotels, Airbnb is definitely the go-to source for travelers. Although Airbnb's service fee structure is a bit complex, at least you can see what it is upfront. Many of the competitor sites display their fees only after you input your information.
It might take a little work to determine your best strategy for listing your vacation rental(s), but in the end, having lots of choices is usually better for consumers -- both hosts and guests -- because costs and fees tend to go down when there's competition.
After further researching fee structures, and maybe even after some trial and error, you should come up with the best advertising strategy for your vacation rental business.