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Understanding How Airbnb Fees and Pricings Work

Published by UK Property Accountants
Published Date: April 22, 2024
Categories: Airbnb

Airbnb is a popular short-term rental listing platform connecting property owners with guests seeking accommodation during their travels. Offering millions of unique places to stay, Airbnb provides an alternative to hotels.

Given its extensive reach, Airbnb is a popular choice for property owners looking to list their accommodations. But they need to understand Airbnb's fee structure before they can fully get going on the platform.

Split-Fee

Airbnb Split fee

A split-fee structure is the most common method Airbnb uses to charge fees and generate revenue. Under this model, fees are divided between the host (the individual listing their property) and the guest. Both the host and the guest pay a certain amount to Airbnb as part of their transaction on the platform.

  • Host Fee

    Most hosts pay a 3% fee on their booking subtotal, but some hosts with super strict cancellation policies and those with a listing in Italy pay more. The subtotal is calculated as the total nightly rate, cleaning charges, and additional fees charged by the host. These charges are automatically deducted from the host's payout.
  • Guest Service Fee

    Airbnb charges guest service fees to guests, with most fees typically under 14.2%. However, Airbnb plans to include an additional fee for cross-currency bookings. Guest service fees are calculated based on the subtotal and can be seen before guests book. Guests might have to pay cancellation fees if they cancel reservations.

So, if the host charges £100 a night for a three-night stay, plus £60 for a cleaning fee, the booking subtotal would be £360. Airbnb further charges the host service fee, which is generally 3% of the booking subtotal (£360*3% = £11), and a platform service fee of 13.89% (£360*13.89% = £50) is charged to guests, resulting in a total stay cost of £410.
 
Out of a total of £410 collected from the guest, Airbnb keeps the host service fee and platform service fee of £61 and remits the remaining amount to the host, i.e. £349.

Host-Only Fee

Airbnb Host-Only fee

Under this structure, the entire fee is deducted from the host's payout, which can potentially appeal to more guests as the total cost for them remains low. This charge ranges from around 14% to 16%, but hosts with strict cancellation policies pay more. The charges for monthly stays can be less.
 
It's worth noting that while we mentioned a split-fee structure, this host-only fee is mandatory for traditional hospitality listings like hotels.

So, if the host charges £100 a night for a three-night stay, plus £60 for a cleaning fee, the booking subtotal would be £360. The guest would pay this amount and Airbnb would take the host-only fee of 15%, i.e., £54. The remaining amount of £306 would be remitted to the host.

While reading this, if any questions relating to how Airbnb income is taxed have popped into your mind, do read our article on the Taxation of Airbnb.

Co-Host Fee

If you own multiple properties simultaneously or find property management challenging, hiring an intermediary to oversee your properties could be beneficial. Co-hosts assist property owners in managing their property, ensuring its efficient management.

Co-hosts charge between 15% to 25% of the nightly rate for their services. While Airbnb does not charge this fee, it is the amount paid directly to another individual for managing your property. You can pay co-hosts through the Airbnb platform for their assistance.

Conclusion

Understanding Airbnb's fee structure is crucial as it influences how hosts set guest prices. Hosts must grasp these charges to estimate their earnings and effectively manage their business operations.

Want to learn more about Airbnb Fees & Pricings?

Contact us today for efficient and hassle-free assistance.

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