Hosting is a great way to earn additional income for many people, and Airbnb is undoubtedly the first OTA platform most hosts choose. But how much does Airbnb charge for listing your property? How does an Airbnb service fee impacts hosts and guests? Does Airbnb refund service fees?
Here, you’ll find answers to all these questions. We will explain everything you need to know about the costs of using Airbnb and how you can ensure your vacation rental business remains profitable despite incurring service fees.
With a clear understanding of Airbnb service fees, you’ll be able to determine a pricing strategy that makes sense for your listings. Just update your prices accordingly on all platforms where you list your properties. It will be easier to do if you use vacation rental software like Hospitable.com. With Hospitable, you’ll be able to update your pricing from one convenient location, saving time and effort.
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What Is the Airbnb Service Fee?
The Airbnb service fee is a fee charged by Airbnb to hosts and guests when the booking is confirmed. This fee helps Airbnb run smoothly and allows the platform to cover the cost of services the company provides. These services help hosts share their spaces and include
24/7 customer support
Marketing vacation rentals to guests
Protection for hosts and their short-term rentals
Educational resources available for hosts
The Airbnb service fee is charged as a percentage of the subtotal value of each booking made. Since this service fee applies automatically, Airbnb hosts and guests don’t have to worry about paying anything separately.
As a host, you can see this fee deducted from your host payout in your transaction history, which you can access from your Airbnb profile. Travelers can see when the service fee is applied at checkout when completing their reservation.
You may also want to check out our article about Airbnb payment options available to hosts.
How Much Is Airbnb Service Fee?
Now that you know the answer to the question “What is the Airbnb service fee?”, let’s discuss how much you need to pay as a host. There are two different Airbnb service fee structures for stays: a split fee and a host-only fee.
Under the split-fee model, hosts pay a flat service fee of 3% of the booking subtotal, excluding taxes, and guests typically pay around 14.2% of the booking subtotal. But some hosts pay more, including Airbnb Plus members, hosts with listings in Italy, and hosts who choose Super Strict cancellation policies for their listings.
The host-only fee structure deducts the entire service fee from the host payout. How much is the Airbnb service fee for a host who chooses this model? Hosts typically pay 14-16% of the booking subtotal, but Airbnb Plus hosts and hosts who have Super Strict cancellation policies may pay more.
The host-only fee model is mandatory for hotels and hosts who use software integrated with Airbnb (property management system or channel manager). The software-connected host can opt for a split-fee model if only most of their listings are in the United States, Canada, the Bahamas, Mexico, Argentina, Taiwan, or Uruguay.
The split-fee model often looks more attractive to hosts because they don’t have to pay much and can set lower nightly rates for guests. But the problem is that travelers may feel scammed when they learn about the sizeable extra service fee only at checkout.
And although the host-only Airbnb service fee may seem like a less favorable option for hosts, it can be a smart option for your listing because it gives you more control over your operations. And there are other benefits of this fee structure as well.
You’ll be able to control your nightly rates better. If you set your prices right, raising them up to account for the fees that you expect to be deducted from your payout, guests could pay less while your own revenue will remain the same.
Your prices will be transparent, and guests will not feel disappointed by the extra service fees added to their booking subtotal at checkout. Travelers will be charged the price they expect.
The host-only service fee will make the booking process more straightforward and improve travelers’ experience. And Airbnb rewards listings that adopt strategies that improve guest experience and grants them higher positions in the search results.
Airbnb Service Fee: What Can You Do to Increase Your ROI?
Airbnb service fees are inevitable for all hosts who use this platform, but minimizing their impact on your bottom line is quite possible. There are some proven methods to maximize your ROI despite incurring an Airbnb service fee.
Optimize your nightly rates to ensure they remain competitive. When calculating your prices, you should factor in service fees and other major expenses and try to find a balance to ensure that your Airbnb remains profitable.
You may also want to check out our article that covers Airbnb expenses to better understand how much money you’ll need to start an Airbnb business and keep it running.
Setting prices will be easier if you use dynamic pricing tools that use market trends and real-time data to set your prices automatically. By the way, Hospitable offers integrations with the top pricing tools, helping you push smart pricing to multiple channels.
Optimizing your occupancy rates is also important because your revenue will be higher if you get more bookings. There are many ways to achieve that, but some of the best strategies to maximize your occupancy rate are:
Regularly update your listing with relevant information
Improve your marketing efforts
Encourage your guests to leave positive reviews
Respond to travelers’ queries fast
Enable Instant Book feature on Airbnb.
Make your Airbnb business more efficient using vacation rental software. Tools like Hospitable.com can help streamline your operations by automating 90% of routine tasks that you need to perform to keep your business running. Hospitable will help you automate communication with your guests, manage your team, avoid double booking, and save you time and costs.
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Add a cleaning fee to your listing. It will help cover the cost of keeping your rental space spotless and guest-ready. Then you won’t need to use the money you earn from bookings to cover cleaning expenses and will leave more of your profit untouched.
Airbnb service fees depend on the cancellation policy you choose for your listing. Hosts with the Super Strict cancellation policy must pay up to 2% extra in service fees because that policy will need extra administrative tasks and customer support. So if you want lower service fees, consider choosing a different cancellation policy.
Does Airbnb Refund Service Fee?
And what if the guest cancels their stay? Will they get a refund for the service fee? Refunds for guests are subject to the host’s cancellation policy. That means that service fees will be refunded if a guest cancels during the free cancellation period for their reservation.
Final Thought
Using Airbnb is one of the best ways to get your rental property booked quickly because it’s one of the world’s largest online vacation rental platforms. Listing your property on Airbnb is free, so there is no sign-up fee or subscription cost. But hosts are expected to pay an Airbnb service fee once they start receiving bookings. The actual amount hosts need to cover will vary depending on the fee structure—a split fee or a host-only fee.
