Have some properties to lend? Are you fed up with the contract system of tenants? Are you interested in renting for a short period to people all over the world? How? Simple, with Airbnb.
Airbnb is a worldwide network that exchanges goods and services between hosts and guests. Here hosts are property managers who have places to rent, and guests are people that will rent these places for a short period of time. Generally, guests are tourists who are visiting different parts of the world, and the rental property that the host provides are of different sizes and locations.
Airbnb is the bridge connecting them. The idea of earning rental revenues is quite pleasing. Do you want to be a host? The first thing that you should know is how much Airbnb Charges. Then you would be able to decide the rental fees you will be charging guests. This article has details about the fee structure and related things of Airbnb.
What Are Airbnb Service Fees?
Airbnb is an online platform that needs regular maintenance, so when a host offers services to guests and makes money, Airbnb charges some fees for that, known as Service fees. It includes all the cost of booking fees and experience fees. Discover the list of vacation rental sites like Airbnb.
How much does Airbnb charge?
How Much Does Airbnb Charge Hosts For Their Service Fee?
Airbnb currently charges two different types of host fees:
Service fees that are shared by both host and guest- split fees
In the split fees system, the guest looking for service of rental properties has to pay the majority of the service fee; he has to pay 14% of the total booking cost as a service fee. While the host, in this case, will pay only 3% of the total booking cost.
But in case the host is strict in his cancellation process, he may have to provide more service, and Airbnb makes sure of that.
Service fees that the only host pays: Host-only fees
In the host-only fees system, the host is the sole person who will pay the service fees. Here guests only have to pay the total cost of the booking they had made. The tax that hosts have to pay starts from 14%. It may go higher, depending on many factors.
If you are a host enforcing strict cancellation then you will pay more service than those who enforce bit flexible cancellation policies. A host-only fee system is compulsory for hotels providing services, while the case of others will be further dependent on other factors.
The host-only fee has increased to 15% of the total sum of booking if the booking is made on 7th December 2020 or later.
If the host provides any experience to guest: Experience fees
When a host offers an experience to guests, he needs Airbnb’s additional aid, which includes 24/7 support and other tools. Therefore Airbnb charges 20% of the total earning that the host does by providing the experience. Although 20% is a bit more, the host is independent to set the charges of experience from guests and can still manage a fair amount of profit.
New Changes of Airbnb in Services Charges System?
Airbnb has not only increased the percentage of Host-only fees but has also made some changes in the choosing fees system. According to these changes from 7th December 2020, Airbnb has made host-only fees compulsory for the majority of hosts around the world. So after the above-mentioned date, a host has to pay 15% of the total cost of booking as service fees while the guest will only pay the actual booking cost.
The host-only fee will be mandatory for hosts belonging from Europe, Africa, the Middle East, and those from pacific Asia except Japan when they join Airbnb from 4th to June 2019 onwards and have to pay 14% as service fees. For hosts of Greece and Croatia, it will be applied from Sept 1, 2020.
While the host from Mexico, Argentina, Uruguay, America, and Canada will be independent to choose between both available options to pay service fees.
The reason behind the change in the Airbnb service fees system
The purpose of Airbnb behind the compulsion of Host-only fee is to favor guest’s interest. Usually, in Split fee, guests get surprised by the elevation in the total cost they have to pay at the end. After the host-only fee, they will be able to know the real amount they have to pay. It will help them to make a better choice while buying services.
The impact of this change of existing service bookings
The existing bookings made before 7th Dec 2020 will not suffer any impact of this change while after the date booking have to follow Host-only fee. Booking made after 7th Dec according to Host-only fee will be charged 14% fees till January 2021 and will be 15% later.
Huge Advantages of going for Host-only fees:
1. Lower rate of cancellation:
While guests will know exactly what they are paying, there might be no chance that they reconsider their bookings which will eventually lessen the cancellation of bookings.
2. A transparent system
No service charges will attract more guests as many of the guests have the mentality to dislike paying extra money other than their bookings. Hence when hosts have a transparent system, they may get more guests leading to more money.
Airbnb SEO ranking
by adopting the Host-only fees method, you will be increasing your chance to boost your ranking on the Airbnb SEO ranking List. Airbnb also values the rights of consumers. So, more and more people will be able to contact you and ask for services.
Get free promotion
Once you get a good ranking, it will eventually lead to an inclination in the number of guests approaching you. This means the Host-only fee will lead to an increase in your business, along with the fact that you can cover some money by increasing the rent also.
Responsibilities of host after knowing about the change in policies:
After the enforcement of the Host-only fee system, it is the responsibility of the host that its implementation should go smoothly. The host should first know all the details of the change and update the same of his info display in a regular manner. He Should make sure that his existing guests will understand the causes and accept the same.
Ways to elevate your Airbnb payout
Have you been too harsh with cancellation?
If you are too harsh with cancellation policies, that means you have to pay more during your service fees, and you may have to pay 16% or more. But those who give flexible cancellations might be paying less. And with a Host-only fee, it would be best to go with later.
What difference can you provide?
Is it different to save after a Host-only fee? Maybe it leads to more guests but not the host-only fee is compulsory. What different thing you have? You can attract more guests as well as earn more profit if you provide additional services, all with rental places including laundry, renting rides, food, etc. All these can make your offer more appealing to guests.
Have you tried ways to tempt guests?
Competition makes life more ongoing. But it is necessary to have your way through it. If all the other things are not working, then offering various tempting offers to guests can. You can offer them easily with Airbnb listing settings.
Discount for early arrivals
You can give a special discount to those who are planning vacations for months. So that they will be first considering your offer.
Discount for the sudden plan
In many cases last-minute plans are expensive, you can attract them with a slight discount on booking in the last 24 hours.
- Discount for long-duration: you can set a package for those who stay longer, like a month or so.
- Hit back at your lowest: During Off-season, there will be almost no business. You can attract crowds with some amazing offers like half price or covering travel costs, etc. It will build up your reputation.
- Make guests your family: You can give first preference for your regular customers along with a discount to make them choose you every time.
You don’t have to allow all, but one or two will be enough to try to give guests things that your rival can’t.
Set up an Airbnb cleaning fee
Another way to make extra earnings from guests is by providing Cleaning services and charging for the same. As guests will gladly agree to clean services, your chances are high. But the cleaning charge you will be asking should be reasonable; before deciding a figure, check once what your competitors are asking because your high cleaning chargers may be the reasoning of business doing in the wrong direction. Other than that, the future of cleaning services on your vacation rental will be determined by factors including weather conditions, location rental size, etc.
More about Airbnb cleaning fee read here.
Earning through Vacation rentals is a good way to use your assets. You can trust Airbnb for attracting crowds and follow the rules to continue making profits. Always remember to check updates that have a direct impact on your business.