Airbnb Service Fee in Canada

If you’re considering turning your home in Canada into a short-term rental, Airbnb can be a great channel to list your property. Yet, to truly succeed on this platform and maximize your revenue, it’s essential to understand Airbnb requirements for hosts in Canada and get familiar with Airbnb service fees.

It’s crucial to know how much Airbnb charges hosts in Canada for each booking so you can factor these costs into your pricing strategy to ensure that your vacation rental remains profitable. In this blog post, we’ll go through everything you need to know about Airbnb service fees in Canada and give tips on managing them and reducing their impact on your bottom line.

You may also want to check out our article covering some province- and city-specific Airbnb regulations in Canada that you, as a host, must follow.

Airbnb Service Fee Canada: Why Do They Charge It?

Many property owners in Canada choose to become Airbnb hosts to earn additional income while connecting with travelers from different parts of the country and from around the world.

Although operating a short-term rental involves many responsibilities, now it’s easy to automate your hosting routine using vacation rental software like Hospitable and put your Airbnb business on autopilot.

Anyone can list their property on Airbnb for free. There are no upfront charges for signing up and publishing your listing on the platform. But once you start receiving bookings, you must pay a service fee—a percentage of the booking subtotal.

Airbnb charges service fees to hosts and guests to cover operational costs and the cost of services provided, including

• 24/7 customer support
• Marketing on Google, social media, and other channels
• Protection for hosts and their properties (AirCover for Hosts)
• Educational resources for hosts to help them get started on the platform

Airbnb service fee in Canada applies automatically when a booking is confirmed, so hosts and guests don’t have to worry about paying it separately. The percentage Airbnb takes from host payouts can vary, but it is typically around 3% for most hosts.

How Much Does Airbnb Charge Hosts in Canada?

Currently, Airbnb has two different fee structures for stays that most hosts can choose from—a split fee and a host-only fee.

A split fee

The most common fee structure is a split fee when the service fee is split between the host and the guest. Most hosts pay a 3% fee calculated from the booking subtotal. The booking subtotal includes the nightly price and additional fees charged by the host, such as a cleaning fee or extra guest fee, and excludes the guest service fee and taxes. The host fee is automatically deducted from the host payout.

The guest service fee varies based on several factors, but most guests pay a service fee of under 14.2% of the booking subtotal. The guest service fee is reduced for some stays of 28 nights or more.

For bookings where the guest pays using a different currency from the one set by the host for their listing, Airbnb includes an additional amount in its guest service fee. A guest service fee can be up to 16.5% of the booking subtotal in such cases.

Guests can see the service fee during check-out before they make a reservation.

Host-only fee

With this structure, guests pay nothing, and the entire service fee is deducted from the host payout. The service fee that Airbnb hosts pay is typically 14–16%, although hosts who use Super Strict cancellation policies may pay more, and fees for monthly stays may be less.

Host-only fees are mandatory for some listings, such as hotels, service apartments, etc., and software-connected hosts on Airbnb globally. However, hosts who have most of their listings in the USA, Canada, the Bahamas, Mexico, Argentina, Taiwan, or Uruguay are currently exempt from this rule. That means Airbnb hosts in Canada can choose between the split fee and the host-only fee structure.

The host service fee is the only fee that Airbnb charges hosts. However, the company reserves the right to change its service fees at any time under its Terms of Service.

Airbnb Fees for Hosts: How to Manage Them

It’s impossible to completely avoid Airbnb service fees as a host, but strategic planning can help minimize their impact on your bottom line. Here is what you can do to navigate these fees effectively and balance competitive pricing with good profitability.

Incorporate service fees into your pricing. Before setting your nightly rates, you must understand all the costs associated with running your property, including Airbnb fees, cleaning and maintenance costs, and other ongoing expenses. This approach will help you set a base rate that covers your costs and allows you to make a profit.

Adopt a dynamic pricing strategy. This approach involves adjusting prices based on the level of demand for your Airbnb listing. It can help you optimize your occupancy rate and enhance profitability throughout the year. The easiest way to implement a dynamic pricing strategy for your Airbnb rental is to use a dynamic pricing tool to automate rate adjustments based on supply and demand and other real-time market data.

Encourage direct bookings. You can become less dependent on Airbnb fees for hosts if you build your own website, which allows you to accept direct bookings. For example, if you opt for Hospitable, you can easily create a professional direct booking website that will look great on desktop and mobile using our easy-to-customize website templates. No technical skills are required.

With the Hospitable Direct booking website, you can keep full control of your bookings and how you market your Airbnb property. Moreover, we’ll list your property on Google Vacation Rentals so you can reach millions of travelers searching on Google daily. This way, you will get direct bookings without paying hefty third-party fees.

Final Thought

Understanding how much Airbnb charges hosts will help you get a clear financial perspective for your vacation rental business. By accounting for expenses like Airbnb service fees, you can create a more accurate budget for your short-term rental business in Canada and set competitive rates that cover your costs effectively.

And remember that while Airbnb’s platform is a market leader that gives you access to a huge audience, you shouldn’t rely on it as a single source of bookings. If you want to build a sustainable vacation rental business, building a strategy that maximizes direct bookings is essential. This way, you can cut the middleman and increase your revenue.