Originally called AirBedandBreakfast, Airbnb started in 2008 with the goal to offer an alternative to hotels for travelers who needed a cheap place to stay when attending design conferences in the United States. The service allowed guests to stay in other people’s homes and sleep on an air bed during the time of the conference for a much better rate than that of a hotel room. Today, the service operates in over 220 countries, has more than 4 million active hosts, and 79.7 million nights and experiences were booked on the platform in the 3rd quarter of 2021 alone. Needless to say, if you’re thinking of getting into the short-term rental business, getting your Vacation Rental listed on Airbnb is probably at the top of your to-do list.
While the marketplace is a great way for hosts to get started at a significantly low cost, it’s important to understand how Airbnb’s fee structure works and how it impacts the total amount guests have to pay when booking on Airbnb.
We’ll cover all the details about Airbnb’s fees for hosts and guests in this article, and give you tips on how to become less dependent on Airbnb and online platforms in general.
bookusdirect is the easiest way for Short Term & Vacation Rental hosts to regain their independence from online platforms, use Social Media to grow direct bookings, save on booking commissions, and delight guests with no extra fees at checkout.
Explained: host fees on Airbnb
Host fees are the fees charged to hosts when a booking is completed through the Airbnb platform. They are deducted from the payout, which is the amount you receive from Airbnb once your guest has checked in. These fees cover payment processing charges and other services like 24/7 support.
Explained: guest fees on Airbnb
Airbnb guest fees are called service fees. They are charged to guests when they confirm their booking on the platform. Services fees are added on top of your nightly rate in the form of a percentage and usually increase the booking total by 15%. Service fees generate the bulk of Airbnb’s revenues ($2.2 billion in Q3 of 2021) and help cover the cost of running the platform, 24/7 customer support, marketing, and host protection programs.
How much are Airbnb fees for hosts and guests?
In this section, we cover both the Split-fee and Host-only fee structures used by Airbnb. We’ll also take a look at the newest fee structure called Simplified Pricing that now applies by default to all software-connected hosts (hosts that list their properties on Airbnb through the use of a property management system).
1. The Airbnb split-fee structure This is the most common fee structure on Airbnb and it also explains why hosts enjoy such low fees on their bookings. With this structure, both your guests and you, the host, pay a fee. Since your guests pay the bulk of the fees when confirming the booking (service fees), you are left with a “small” host fee to pay. Indeed, in most cases, the Airbnb host fee is 3% and is calculated on the total booking amount.
When it comes to service fees, Airbnb notes that in most cases guests pay under 14.2%. So, if your nightly rate and optional fees add up to $750, once the service fees have been accounted for, your guests have to pay $856.5. That is $106.5 more than what you actually charge.
While the Split-fee structure might seem very advantageous for hosts, you should be aware of how much this impacts your guest’s total. Using the below screenshot as a reference, guests need to pay an extra 16.3% every time they book through Airbnb. This is a considerable additional amount that may put off some of your prospective guests.
2. The Airbnb host-only fee structure The host-only fee structure is less commonly used by hosts, although it is now mandatory for hotels and software-connected hosts. This structure charges the host only and the fees typically range between 14% and 17%. This means that no service fees are charged to guests and that all the fees are deducted from your payout. Say your payout was $2,000, after deducting the host-only fees, you would ultimately receive between $1,660 to $1,720.
Airbnb claims that choosing this fee structure, and so covering the fees for your guests, helps you increase the bookings as guests tend to prefer transparent pricing with no surprise extra fees when confirming their booking. To highlight this, Airbnb adds a special tag to your listing that informs guests you are covering the service fees.
So while you will be paying more fees, you’ll make up for it by getting more bookings. Alternatively, and this is what we see most hosts do, you can simply opt to increase your base rate in order to factor in the increased fees and keep your payout amount intact.
3. What is the difference between each fee structure? Well, in the end, they are quite similar and in both cases end up increasing the cost of the booking for the guest. The cost increase is either mostly applied to the guest with the split-fee structure, or to the host with the host-only fee. But since most hosts who use the host-only fee tend to increase their base rate to absorb the higher fees, the end result is the same: the guest pays more.
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How to become less dependent on Airbnb, save on fees, and offer greater value to your guests?
Now that we have covered Airbnb's fee structure, let's take a look at how hosts can avoid these fees for themselves and their guests by reducing their reliance on online platforms and driving direct bookings.
The key to becoming less dependent on Airbnb is to diversify your booking channels. You can easily do so by listing your property on other platforms like VRBO or Booking.com, although these also charge guests and hosts considerable fees. The ideal way to reduce your reliance on online platforms is to develop your own direct booking channel and leverage free Social Media platforms like Instagram and Facebook to reach prospective guests. We’ll cover how to do this in this last section.
1. Build your direct booking channel
While many options exist out there to help you create a website for your Vacation Rental business, these can at times be quite tedious and require a whole lot of setup! What if you didn't need a website, but just wanted to allow guests to book from your Instagram profile? What if you just wanted to share a link in a WhatsApp message and let guests book from there? Well, bookusdirect allows you to do just that! There’s no need to create a website to drive direct bookings. With bookusdirect, you set up your property and rules in a few minutes and instantly get a shareable direct booking link that is unique to your property. And don’t worry, that link has been designed to be super mobile-friendly, easy to use, and secure. Read more about the benefits of direct bookings here.
2. Accept online payments
If you already receive direct bookings, or have a website with a booking inquiry form but can’t accept online payments, you’ve probably already noticed that keeping track of which guest paid and which hasn’t can quickly become a tedious task. That’s why we’ve made sure to include a seamless checkout experience for your guests when they book directly with you through your bookusdirect link. There’s absolutely no setup required and no need for you to have a PayPal, Stripe, or other payment processor account — it just works! When your guests pay through bookusdirect, we collect the money on your behalf and wire it back to your bank account after the guest checked in.
3. Sync calendars
Diversifying your booking channels should not equal more work for you and should not come at the cost of increased double bookings. From your dashboard, you'll be able to seamlessly sync your direct booking calendar with Airbnb and other online channels. Once you’ve completed the one-time sync process, your property's availability will be updated across all channels. No manual work for you, and no double bookings.
4. Leverage Social Media
Unlike creating your own website, Social Media platforms like Instagram and Facebook are free, and you can start spreading the word about your Vacation Rental in minutes as opposed to hours or even days! Half a billion people visit Instagram every day and that naturally makes it a perfect place for you to market your Vacation Rental home to prospective guests and grow the following and reputation of your property. Today, travelers go to Instagram for inspiration and to “dream” about their next trip — that is precisely why your Vacation Rental should be on Instagram. And, with your direct booking link saved in your bio, prospective guests will be able to book directly with you, straight from your Instagram profile. Read more on how to use Instagram to get direct bookings for your Vacation Rental home here.
5. Reward guests who book direct A last good tip to help you grow direct bookings and reduce how much you depend on online platforms is to reward guests who book directly with you. You can reward guests by simply offering them a free breakfast on their first day, free refreshments on arrival, or even a free pick up and/or drop off from their port of arrival. Guest rewards must not necessarily be financial, most importantly they should show a sense of care and extra attention that says: thank you for booking directly.
While online platforms like Airbnb offer a great way for Vacation Rental homeowners to get started on their hosting journey at limited costs, the additional fees imposed on guests through such platforms can in some cases reach as high as 17%. One of the most powerful ways to counter this effect is to develop a direct booking channel leveraging the reach and discovery opportunities that Social Media platforms such as Instagram and Facebook offer... for free!