Airbnb Host Service Fees in 2024: A Comprehensive Guide
Airbnb continues to be one of the most popular platforms for short-term rentals in 2024, offering property owners the opportunity to earn income by listing their spaces for guests. Whether you are an experienced host or just getting started, understanding Airbnb’s service fees is essential for managing your finances and maximising your earnings. This article will provide an in-depth explanation of Airbnb's host service fees, how they are applied, and what factors can influence them in 2024.
We’ll also explore additional charges related to premium services such as Airbnb Plus and Airbnb Luxe, how cancellation policies affect fees, and some significant updates regarding currency conversion and international bookings. Additionally, we will cover VAT considerations and how hosts and guests can access relevant invoices and receipts. Finally, we will touch on how hosts can avoid Airbnb’s commission fees by encouraging direct bookings.
Airbnb Service Fees: An Overview
Airbnb charges hosts a service fee for each booking, which is a percentage of the booking subtotal (the subtotal includes the nightly rate, cleaning fees, and additional guest charges but excludes taxes and Airbnb fees). In 2024, hosts have two main options for paying these service fees:
Host and Guest Split Fee
Host Only Fee
Each of these options impacts your earnings and how much your guests are charged, so it's important to understand the differences.
Host and Guest Split Fee
The Host and Guest Split Fee is the traditional model used by many hosts on Airbnb. In this structure, the service fee is split between the host and the guest.
Host Fee: Typically, Airbnb charges 3% of the booking subtotal to the host. This fee is automatically deducted from the host’s payout.
For example, if the booking subtotal is £500 (excluding taxes and Airbnb fees), the host fee would be £15, leaving the host with £485 before other costs are considered.
Guest Fee: Guests are also charged a service fee, which typically ranges from 12-16% of the booking subtotal. This fee is added on top of the nightly rate, cleaning fee, and any other charges the host includes.
Using the previous example, if the guest is paying a 14% service fee on a £500 booking, they would pay an additional £70, making the total cost for the guest £570.
This fee structure provides a balance where both hosts and guests share the cost of using Airbnb's platform. However, the higher guest fees can sometimes deter budget-conscious travellers, especially in competitive markets.
Host Only Fee
In the Host Only Fee model, the entire service fee is covered by the host, and the guest does not see any additional service charges from Airbnb.
In this case, the host is charged a higher fee, typically between 14-16% of the booking subtotal. This can go even higher in specific cases, such as for Airbnb Plus or Airbnb Luxe listings, or if the host uses a Super Strict Cancellation policy.
Example: For a booking subtotal of £500, the host could be charged £75 at a 15% fee rate, leaving the host with £425. The guest would only pay £500, making this pricing model more transparent and attractive for the guest.
The Host Only Fee model is commonly used by professional hosts, property managers, and hotels that prefer offering all-inclusive pricing without extra charges for the guest. It's also mandatory for Airbnb Plus, Airbnb Luxe, and hosts who use property management software (such as channel managers).
Factors Influencing Service Fees in 2024
Airbnb service fees are not fixed and can vary based on several factors. In 2024, hosts may experience different fee rates depending on the following:
1. Airbnb Luxe and Airbnb Plus
If you join Airbnb Luxe or Airbnb Plus, you will likely pay a higher host service fee. These premium programmes offer enhanced marketing and exclusive services, which come with additional costs. Hosts participating in Airbnb Plus typically pay around 16%, while those in Airbnb Luxe could face higher fees, especially when combined with international bookings or other add-ons.
Airbnb Luxe: This service caters to high-end properties and luxury experiences, where Airbnb provides concierge services and specialised support, driving up the service fee to match the premium offering.
Airbnb Plus: A programme designed for homes that meet Airbnb’s elevated standards of design and quality, requiring a higher fee due to the increased exposure and marketing benefits offered by Airbnb.
2. Cancellation Policy
The type of cancellation policy you choose as a host can also affect your service fee.
Flexible Policy: Allows guests to cancel up to 24 hours before check-in for a full refund. This policy attracts more bookings but may result in higher service fees due to the increased flexibility it offers guests.
Moderate Policy: Requires guests to cancel at least 5 days before check-in for a full refund. This policy strikes a balance between flexibility for guests and protection for hosts.
Strict Policy: Guests must cancel at least 14 days before check-in for a full refund. This policy reduces the host's exposure to cancellations but typically results in lower booking rates.
Super Strict Policy: There are two super strict policies, which allow cancellations with a partial refund if done 30 or 60 days before check-in. Hosts using a Super Strict Cancellation Policy typically pay a higher service fee because of the reduced flexibility for guests.
3. Length of Stay and Location
Service fees may also vary based on the length of stay and location of the booking. Longer stays sometimes result in lower service fees for hosts because Airbnb incentivises hosts to offer discounts for extended bookings. Meanwhile, properties located in high-demand tourist destinations or urban centres like London may face slightly higher fees due to the increased competition and operational costs in these areas.
Currency Conversion and International Booking Fees in 2024
One of the major updates for 2024 is the increased cost associated with bookings made in a different currency. Airbnb has introduced an additional 2% fee for guests who book a listing in a currency different from their home country’s currency. This means that international travellers booking a stay in the UK using a foreign currency may end up paying more than they expect.
Additionally, for international bookings, guests can be charged a service fee as high as 16.2%. This is particularly relevant for UK hosts with properties that attract a large number of overseas travellers.
As a host, it's important to be aware of these additional costs, as they can affect the total price your guest sees, potentially impacting your booking rates.
VAT on Host Service Fees
For hosts in the UK and many other countries, VAT (Value Added Tax) is applied to the service fee charged by Airbnb. This is typically included in the percentage fee that Airbnb takes from the booking. UK hosts, for example, will see VAT added to their service fee at the applicable rate, which is currently 20%.
Hosts can download their VAT invoices directly from their Airbnb host account. These invoices break down the service fees and VAT paid on each booking, helping hosts with their accounting and tax obligations. To access your VAT invoice:
Log into your Airbnb account.
Go to the Transaction History section.
Find the relevant booking, and you’ll see an option to download the VAT invoice.
VAT Receipts for Guests
Guests who require a VAT receipt for their stay can also access this through Airbnb. The VAT on the booking is generally paid by the guest as part of their overall booking fees. To get a VAT receipt, guests should contact Airbnb customer support, as the receipt will be issued based on the final booking payment, including any taxes collected.
Avoiding Airbnb Commission: Direct Bookings
While Airbnb provides a powerful platform for reaching a global audience, hosts can avoid paying Airbnb's commission fees by encouraging direct bookings. Here are a few strategies for driving direct bookings:
Create a website: Many hosts build their own website to showcase their property and take direct bookings. This helps avoid the 14-16% service fees associated with Airbnb, though you may need to invest in web development, marketing, and payment processing tools.
Use social media: Platforms like Instagram, Facebook, and TikTok offer excellent opportunities for promoting your property directly to travellers.
Offer incentives: Offering discounts for guests who book directly with you rather than through Airbnb can encourage repeat guests to bypass the platform.
Remember, taking direct bookings requires you to manage your property, payments, and guest relations independently, without the protections Airbnb offers, such as their Host Guarantee and guest reviews system.
In 2024, Airbnb’s host service fees remain a crucial consideration for anyone hosting on the platform. Whether you opt for the Host and Guest Split Fee or the Host Only Fee, being aware of how these fees work and the factors that influence them can help you manage your earnings effectively.
With the rise in international bookings and additional currency conversion fees, it's essential to keep these extra costs in mind when setting your pricing strategy. VAT considerations for both hosts and guests also remain an important aspect of operating through Airbnb in the UK.
Finally, while Airbnb offers unparalleled access to a large audience, some hosts may choose to reduce their reliance on the platform by driving direct bookings to avoid commission fees. Regardless of your approach, staying informed about the latest changes will ensure you can make the most of your Airbnb hosting experience in 2024.
