Airbnb has quickly become one of the most popular ways to travel.
The platform provides a convenient way to find and book accommodations in cities across the world. And for property owners, Airbnb offers an easy way to earn extra income by listing their homes and investment properties on the site.
With over 100,000 listed properties across Australia, Airbnb’s unparalleled success is primarily due to the ease of entry into the short-term rental property market. But, of course, listing your vacation rental property on Airbnb is not free.
So, what can you expect to pay to have your property listed on the Airbnb platform?
Here’s everything you need to know about the Airbnb service fee.
Why Do You Pay an Airbnb Host Service Fee?
Maintaining a successful Airbnb business requires more than just finding the right property and providing amenities that guests will love. There are also several overhead expenses that you need to consider when starting an Airbnb.
One of these standard overhead expenses is the Airbnb fees, which Airbnb charges for each booking. The host service fee is typically a percentage of the total cost of the reservation, and it can vary depending on the length of the stay and other factors.
What is the Airbnb Service Fee Structure in Australia?
When you list your property on Airbnb, you can expect to pay a minimum 3% host service fee. The Airbnb host fees are automatically calculated and added to the total when a guest makes a reservation.
As we mentioned earlier, the final host fee you pay depends on the type of Airbnb account (for example, Airbnb Plus and Airbnb Luxe have different service fees), how long the guests are staying, and your chosen fee structures.
In addition, Airbnb calculates your host service fee based on your cancellation policy. Airbnb charges hosts with a strict cancellation policy around two per cent more than hosts with a more flexible one.
Structuring Your Fee Option
When you list your space on Airbnb, you can choose between a split fee and a host-only fee structure.
With the split fee structure option, the hosts and the guests share the Airbnb service fees, with the guest paying most of the service fee. As the Airbnb hosts, if you opted for a split fee option, the guest service fees amount to 14.2% on top of the rental price, and Airbnb deducts 3% from your payout amount to cover the hosts’ share of the service fee.
On the other hand, with the host-only fee structure option, there won’t be an additional guest fee, and you bear responsibility for covering the entire cost. In other words, there is no guest service fee, only a host fee (and any cleaning fee you may charge guests).
The host-only structure (also commonly referred to as simplified pricing) became mandatory for all hosts using software-connect from 1 November 2020. The flat rate is set at 15% for hosts and guests don’t contribute anything towards the service fee.
The split fee option is a good choice if you want to maximise your earnings. It’s important to note that guests will have to pay a higher rate, which may deter some from booking your space—especially since Airbnb displays the service fee at check-out. If you can fill your calendar consistently, though, the split fee option is worth considering.
But remember, hosts using software-connect can no longer use the split fee options, so keep this in mind.
The host-only fee option is a good choice if you’re looking to attract more guests. The lower rate may encourage more bookings, but you’ll need to be prepared to absorb those costs. According to Airbnb’s service fee page, the minimum you’ll pay is 14% of the booking fee, but this could increase to 20% depending on your listing.
Where Can You Find Your Service Fee Cost Breakdown?
Because the Airbnb service fee can vary, you’ll need to track how much it costs to list your property on the platform. The great thing about Airbnb is that they’re not going to hide your fees from you.
They understand that you’re running a business and aim to be as transparent as possible when providing you with a breakdown of the costs associated with your listing.
You can access the full-service fee breakdown as follows:
- Step 1: Navigate to the transaction history tab
- Step 2: Select the reservation code under the particular booking that you’re checking
- Step 3: Once you’ve navigated to the specific booking, find the “Payout” link
- Step 4: You’ll find the service fee listed under the reservation’s payout breakdown.
How Does Airbnb Collect the Service Fee from Hosts?
Once the guest has checked out of their stay, Airbnb will release your payment for the booking. The amount that they pay out will be less than the service fee. For example, if you charge $90 per night for seven nights and pay a 3% service fee, your total payout will be $611.11 ($633-3%).
Key Takeaways
Airbnb is a popular home-sharing platform that allows people to rent out their homes to travellers from all over the world. One of the things that make Airbnb unique is its service fees. Unlike most other vacation rental platforms, Airbnb does not charge a commission on bookings.
Instead, Airbnb charges service fees that are calculated based on the total cost of the reservation. Airbnb collects this service fee and uses it to cover the costs of running the website and providing customer support. The service fee is typically around 3% but will depend on how you structure your fee option and the area where you own your property.
If you choose the split fee option, your guest will absorb the majority of the service fee cost, while you’ll pay a small percentage. But, if you choose the host-only fee option (which is now mandatory for hosts using software-connect), you’ll cover the entire service fee cost, which will cost you 15%.
Both fee structures have potential benefits and drawbacks, so you’ll need to weigh which works best for your Airbnb business.
How Can GrowHOST Help You Manage Your Airbnb Listing?
When it comes to running a successful Airbnb business, there are a lot of details to track. From cleaning and stocking the property to managing guest communications and handling check-in and check-out, it can be difficult to stay on top of everything.
That’s where GrowHOST can help.
We offer a range of services designed to take the hassle out of Airbnb management, including listing optimisation, 24/7 guest support, and professional cleaning. We can also help you to decide on the best service fee structure for your Airbnb business, so that you can maximise your profits.
With our help, you can focus on growing your investment, safe in the knowledge that your listing is in good hands.
Contact us today to learn more about how we can help you manage your Airbnb listing.
