Airbnb Service Fee: What You Need to Know (2024)

As a short-term rental host, it's important to be aware of the Airbnb service fee that the company charges guests on top of the cost of their stay. This article will break down what the fee is, how it's calculated, and some ways to offset its impact on your profits. Stay ahead of the game and make sure you're taking all the necessary steps to run a successful short-term rental business!

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What is an Airbnb Service Fee?

An Airbnb service fee is a fee charged by Airbnb to hosts and guests in exchange for the platform's marketing, administration, and customer support services. The cost is automatically applied as a percentage of the subtotal value of each booking made, and it is deducted from host payouts in their transaction history on Airbnb. Guests will see the fee applied at checkout when completing their reservation. It is essentially the cost you pay to use Airbnb as a listing platform.

How Much Does the Airbnb Service Fee Cost?

Airbnb requires one of two different service fee structures: the split fee and the host-only fee.

The Split-fee

The split fee means that the host and guest share the Airbnb service fee, with the guest absorbing the majority of the expenses. This can be a positive for hosts because it allows hosts to offer an attractive lower nightly rate to guests. However, upon booking, guests will see the required service fees and may feel less inclined to book.

The Host-only fee

The host-only fee is just that - only the host pays a service fee to Airbnb, and not the guest. At first glance, this may seem unfavorable. Actually, the host-only fee allows you more control of your nightly rates. Plus, the price the guest sees in their search is the price the guest receives. This prevents guests from being surprised and turned off from your home by any unexpected booking fees.

It generally costs hosts about 14-16% of the reservation's subtotal. To counteract this, hosts may raise their nightly rate to have guests indirectly cover the costs. When you integrate with Host Tools, you can simply add a pricing rule to increase prices by 15% to offset this fee. Just be sure to pay attention to typical pricing in your area, so you don't overcharge guests and miss out on potential bookings.

Does the Host-only fee automatically affect you?

It’s important to note that hosts who have the majority of their short-term rentals listed in the U.S., Canada, Bahamas, Mexico, Argentina, Taiwan, or Uruguay who connect their Airbnb listing to Host Tools will not be affected. If the majority of your listings are outside of these countries, your listings will be automatically moved to the Host Only Fee.

Benefits of Choosing the Host-Only Airbnb Service Fee

At the end of the day, choosing the host-only Airbnb service fee gives you more control of your short-term rental business. Choosing this option offers the following:

More control over your operations

As a host, you always want to maintain your revenue stream. The host-only fee option allows you to do just that. You know you are paying the entire service fee and can adjust your nightly price accordingly. This gives you more control over your business and helps you keep more of the money you make!

This allows you to keep a lower nightly rate while still pocketing a good amount of cash.

It's a win-win for both hosts and guests!

Ability to price your accommodations competitively

Since you are in control of your pricing, you can be more competitive in the marketplace. This option gives you the ability to better price your accommodations to attract guests.

Less risk of cancellation

Under the host-only fee, there is less risk of cancellation because guests are not responsible for paying the service fee. This could lead to more bookings and fewer headaches for you as the host.

Airbnb highlights “No Guest Service Fee” to prospective guests

Airbnb highlights the fact that there is no guest service fee added to the host’s rates, making the listings more attractive to guests. According to the platform, hosts that have decided to switch to the simplified pricing have seen an overall increase in their bookings of about +17%.

Guests are not surprised by any fees.

When browsing listings, it's positive customer service for guests to see the same price on the listing as they do at check-out. In addition, maintaining host-only fees will keep from any surprises and prevent an "empty cart" at check-out.

The Airbnb algorithm prefers it

At the end of the day, Airbnb will always prioritize listings in a guest's search that do the most for their customer's benefits. The Airbnb algorithm will prioritize listings that utilize the host-only service fee.

How to Provide Additional Income to Counteract the Airbnb Service Fee

Introduce upsells

Offer upsells to your guests to help make up for the service fee that they are already paying.

You can do this by providing them with additional services or amenities that they may be interested in during their stay. This could include things like airport transportation, laundry service, or even a simple breakfast in the morning.

By providing value-added services, you can help offset the cost of the Airbnb service fee and provide additional income for yourself.

Choose a firm cancellation policy

If you want to really offset the cost of the Airbnb service fee, then you need to make sure that you have a firm cancellation policy in place. This way, if a guest cancels their reservation, you can keep all of the money they have paid, including the service fee.

While this may seem like a harsh policy, it is actually quite common for vacation rental properties. And, it will ensure that you are not out any money if a guest does cancel their stay.

Add a cleaning fee

Another way to help make up for the Airbnb service fee is to add a cleaning fee to your listing. This is a typical fee that is charged by vacation rental properties and can range anywhere from $50 to $100.

By adding a cleaning fee, you will be able to keep more of the money that you are making from your rental property.

Encourage direct bookings

Finally, you can offset the cost of the Airbnb service fee by encouraging guests to book directly with you.

Overall, the Airbnb service fee is not too bad when you consider all of the ways you can counteract it. As a host, you can control your pricing and keep more of the money you make. Guests are also less likely to cancel their reservations, which can save you time and money in the long run. Finally, encourage guests to book directly with you to avoid the service fee altogether. By following these tips, you can help offset the cost of the Airbnb service fee and keep more of your hard-earned money.