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Over the past decade, real estate investors have harnessed Airbnb as a platform to rent out their properties and connect with people from around the world. The short-term rental industry has continued to flourish, with 2021 seeing a significant increase in earnings for U.S. hosts. On average, an Airbnb host in the United States made $13,800 in 2021, marking an impressive 85% surge in income compared to 2019.
If you are contemplating the idea of investing in a vacation rental property and stepping into the role of an Airbnb host, whether as a supplementary source of income or a full-time endeavor, it's crucial to gain insight into the service fees associated with using the platform. Understanding these fees will enable you to set competitive pricing for your property.
So, how much does Airbnb deduct from hosts in the form of service fees? Let's dissect Airbnb's charges to hosts, make comparisons with other listing platforms, and provide valuable insights for savvy investors running their short-term rental businesses.
What Percentage of Earnings Does Airbnb Retain?
For many Airbnb hosts, the standard service fee amounts to a flat 3% of the booking subtotal. The booking subtotal encompasses the nightly rate paid by guests and any additional fees charged by hosts, such as cleaning fees. Taxes are not included in the subtotal. These service fee payments are subtracted from the total payout to the host for each reservation. To illustrate, if the stay's subtotal is $1,000, the Airbnb host fee amounts to $30, leaving the host with a payout of $970.
While a 3% fee is the most prevalent among hosts, various fee structures exist that can impact the percentage of earnings Airbnb deducts from hosts:
1. Split Fees:The split fee structure is the most widespread, with both hosts and guests sharing the responsibility for Airbnb fees. Under this arrangement, hosts cover the flat 3% fee, while guests typically incur a service fee that hovers around 14% of the booking subtotal.
2. Host-Only Fee: In contrast to split fees, the host-only fee structure places the entire fee burden on hosts, typically amounting to 14%-16% of the booking subtotal. Hosts who enforce strict cancellation policies may opt for this structure to absorb costs on behalf of their guests, thus offsetting the rigor of their policy. It's important to note that the host-only service fee is mandatory on Airbnb for traditional hospitality listings, including hotels.
By grasping these nuances in Airbnb's fee structure, hosts can make informed decisions to optimize their short-term rental business operations.