Airbnb is one of the world’s most trusted short-stay platforms, with guests relying on the brand’s excellent reputation and robust guarantees when they choose to book. For potential hosts, Airbnb’s well-established systems make operating your short let property easy. The brand’s reputation and efficiency come at a cost, with an Airbnb service fee that helps ensure both host and guest meet their standards.
Airbnb’s service fees cover things like host protection and marketing to guests – but all of these are bundled together into something called a ‘service fee’. Hosts and guests alike pay a percentage of this fee – but there are a few different ways it can be structured that any potential host should know about.
What is the Airbnb service fee?
Airbnb charges a service fee whenever a guest books a stay through their platform. This fee, like a restaurant’s service fee, is designed mainly to cover the cost of Airbnb’s activity in the host/guest arrangement. This includes things such as customer support, marketing, property listings and booking interfaces etc. Essentially, this is where Airbnb makes its profit.
Airbnb charges both guests and hosts for the service fee as part of one of two systems. The fees are charged automatically, so you don’t need to worry about manually paying to list your property on Airbnb if you’re a host.
The two service fee options are split fees and host-only. In a split fee system, there’s a host fee and guest fee.
Typically, hosts pay a 3% fee, which is calculated from the booking subtotal. It is automatically deducted from your payout. Note that for Airbnb Plus Hosts, Italian listings and Super Strict cancellation policies, fees will be higher.
You can see what the service fees for your bookings were in your hosting account’s transaction history under payout.
Your guests pay service fees which are under 14.2% of the booking subtotal. The fees vary depending on many different elements but are shown clearly at checkout so guests know what they are agreeing to.
Host-only fees, on the other hand, are deducted entirely from your own payout and are charged at 14-16%. Some hosts with Super Strict cancellation policies will pay more than this – with the maximum charge going to around 20%. While this fee seems far higher than split fees, it does have advantages: you can protect your guests from unseen fees and appear more competitive, gaining more control over the displayed price.
Host-only fees are always mandatory for any hospitality-style listing such as hotels, guesthouses and B&Bs. They are also mandatory if you list any of your properties through third-party software tools.
What’s the latest change to fees?
2019 saw the introduction of host-only fees, which was a big move at the time as until then both guests and hosts always shared the fee. Host-only fees also became the default fee type for owners who uploaded property via a property listing portal. By December 2020, Simplified Pricing (host-only) became the mandatory choice for anyone uploading their listings via third-party software.
No further changes have been made to fees since 2020. Though a recent Terms of Service update in 2022 was pertinent to hosts. In this update, terminology around the Airbnb Host Guarantee was changed to Host Damage Protection. A phrase used under their AirCover policy.
Host service fee options
As a host, you’ve got a few choices when it comes to choosing your fee structure. Remember that additional fees, such as cleaning, are not part of the original service fee. Such factors will influence the final price presented to a guest. You need to try and keep your fees manageable for you and attractive to your guests.
The host-only service fee means guests don’t have to pay any share of the Airbnb service charge. Instead, you pay 14-16% of your total payout. That makes it more costly for you, but does give you full control over pricing. Arguably, host-only property listings can appear more competitive than split-fee ones and could be the difference between your property winning a guest’s custom over your competitor.
The split fee structure splits costs between the host and guest. You’ll pay 3% (unless you’re a Plus Host, have a Super Strict Cancellation Policy or host in Italy). Guests pay under 14.2% of the booking subtotal, which is the cost of nightly rate, cleaning fee and any additional guest fees. This fee varies and is displayed at checkout for your guests – so it may be higher than they’re comfortable with and will lead to them choosing a different property. You, as a host, have no control over what guests are charged.
If you offer Airbnb experiences, prepare to pay 20% of the total cost when your final payout is calculated. Airbnb states that the costs come from products and services they provide to hosts, including maintaining liability insurance. The service fees are withheld from your payout after booking – so you’ll be paid your earnings with the service fees already removed.
Others eg. fees with partners
If you choose to use a co-host, you’ll have to pay them a fee which comes out of your standard payments. Co-hosts can help you perform some of the more time-intensive tasks a host may need to perform, such as messaging guests, handling your reservations, coordinating cleaning and even check-ins.
Other typical fees you’ll need to pay for
The Airbnb service fee is just one part of the total cost of a booking, and not the only fee a guest or host may face. Here are the other common costs to consider. Primarily as a host, but also for guests to be aware of too.
Cleaning fees are a bit of a contentious topic in the Airbnb hosting sector and are something you’ll need to plan carefully. Everybody wants to stay in a clean property, but few want to pay extra as a result. The cleaning fee is set by the host, so it’s an opportunity for you to minimise added costs to guests.
As a host, you can ‘hide’ the cleaning fee by upping your actual room rates but removing the fee from the listing. This might help win you new guests because they won’t feel as ‘ambushed’ by the cleaning fee.
Changing cleaning fees presents a certain level of expectation to guests. If you have low fees, you can ask guests to do simple tidying up for you – such as stripping the bed sheets after their stay. If you charge a high cleaning fee, your guests will be unlikely to tidy up after themselves.
Remember that cleaning fees are there to help you get the property back to standard for another guest. To do that, you either have to clean it yourself or hire help – so consider the cost of hiring cleaners when you set your fees. For more on this topic, read our in depth cleaning guide for Airbnb.
While Airbnb offers some limited protections for hosts through Aircover, the platform does not provide adequate for many issues and should not be considered as a replacement for insurance. Many hosts are not aware that most standard insurance policies do not provide enough cover either. To protect your property and learn more about this topic, consider specialist Airbnb insurance.
Here at Pikl we can cover Airbnb hosts for things like theft, accidental and malicious damage by a guest. We also cover things like liability (e.g. if a guest sues you), legal cover and more.
If you decide you don’t want to deal with the day-to-day management of your Airbnb property, you may opt for a management company that can do it for you. Fees for these services are completely variable depending on the specifics of the business you choose and the service they give you.
If you’re an Airbnb host yet to invest in adequate insurance, get in touch with Pikl today. Our team can help if there are any insurance questions you may be unsure about. Click here to get in touch.
Airbnb service fees: FAQs
We’ve covered a lot of ground here and you should hopefully be up to speed regarding Airbnb service fees. But what if you still had some burning questions? Have a look at some of our most commonly asked questions below.
Why does Airbnb charge a service fee?
Airbnb charges its service fee to cover the cost of using the service. This includes their digital platform, customer support and Aircover etc.
How do I avoid paying service fees on Airbnb?
Guests can avoid paying service fees by opting for bookings that use a host-only option. However, hosts often charge more to cover this missing cost – though it does mean that the stated room price will be more closely aligned to the final cost. As a host, you will have to pay a service fee one way or the other.
Does Airbnb have hidden fees?
Airbnb’s fees are not hidden, but many of them only appear when looking at the breakdown of the price and can therefore ‘surprise’ guests who may not be prepared for them. Cleaning and service fees, for example, can dissuade guests who don’t expect them.
How much money do Airbnb hosts make?
From a service fee perspective, Airbnb hosts are charged a certain percentage on their stated room rates – so their earnings are dependent on whether they offer split fees or host-only. In a split fee system, the host will be earning slightly more than they would in a host-only agreement as the guest bears some of the fee costs.