What happens to your hosting fees

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What happens to your hosting fees

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At a recent Host Q&A event in Sydney, Ben, a Superhost from Brisbane, Australia, asked a great question: What happens to the money Airbnb collects from hosts and guests as service fees? We thought it was such a fantastic question, we wanted to share a few behind-the-scenes details with you here.

 

You probably know that as a host you’re charged a service fee whenever a booking or Experience is confirmed. For home hosts, the fee amount is usually 3%*, and for Experience hosts, it’s 20%. In most cases, guests are also charged a service fee when they book on Airbnb. A full breakdown of the fee model, can be found in our Help Center

 

So what exactly happens to the money that’s collected? We redeploy it into three big categories that help support you as a host and an entrepreneur: community support, marketing, and product development. Here’s a closer look at how your fees are deployed to help power Airbnb:

 

 

Community Support

One of our top priorities is making sure we can support you if you have questions or need support.  As we mentioned at our last Host Q&A event, we're investing a substantial amount of resources into our Community Support team to ensure we’re there when you need us, and that we can help you with your question or concern smoothly and efficiently. In the past year, for instance:

  • In the last few years, we’ve tripled the size of the Community Support team to help you get answers more quickly, in your preferred language. (And it’s helped: over our peak holiday season this past year, for instance, 80% of calls were answered in less than one minute; and this year, we’re committed to improve this even more.)
  • We built a new process online to make it easier to connect with us—via phone or our online chat system—and help you get to the right person, right away. Now you can find the phone number you need and access the chat system almost immediately.
  • And finally, we launched new tools so our agents can easily understand a hosts’ issue and can respond efficiently and consistently.

 

We will continue to make improvements and invest in our Community Support team. In fact, one improvement that’s happening right now is that we’re splitting the team into areas of expertise. This will help us connect you more quickly with the right person to address your particular concern. We’ll be using an intelligent routing system to direct your question to a Community Support agent who is specially trained to address your question. We’ll be introducing this program globally in the next few months.

 

What other ideas do you have for improving the Community Support experience? We’d love to hear your suggestions in the comments section, below.

 

 

Marketing

Another topic we know hosts care a lot about is getting enough bookings to meet their individual goals. We help to drive that through significant investments in marketing to guests. Through our marketing teams, we ensure that guests around the world think about Airbnb first when they’re making their vacation plans. We focus mainly on three types of marketing:

  • Marketing to guests in the ‘real world’, through traditional advertising channels (think TV ads, billboards). These are typically tailored to specific local markets. Already this year, for instance, we’ve had major ad campaigns in Mexico and Brazil, and there are more that will roll out around the world later this year.
  • Marketing to guests in the ‘digital world.’ We also have close partnerships with Facebook, Google, the iTunes app store, and other digital platforms to ensure that Airbnb has a strong presence in the places where our guests and other travelers are spending time online. It’s crucial that Airbnb—and your listings—show up high in search results when travelers are looking to book trips and that’s why we spend meaningful money here on your behalf.
  • Marketing to guests through Airbnb-specific channels. The Airbnb website and app and email are the other channels we use to help drive guest demand and additional bookings to you. On the website and in the app, we create travel-inspiration articles and collections of listings travelers search for frequently, such as beachfront properties. We also send booking reminder emails when guests have been searching for a place to stay but haven’t booked yet.

 

 

Product development

Finally, our last significant bucket of spend is around product development. Airbnb employs thousands of engineers, designers, and product leaders who build the tools and infrastructure that power your business. They focus on keeping Airbnb up and running (ensuring our technology platform is strong, fixing issues that arise), and they develop products specifically designed to make it easier for you to host and succeed.

 

Recent examples include tools to make reviews more fair for hosts and the newly redesigned Guidebooks feature. The latter helps hosts give guests local recommendations and create a more welcoming, memorable experience overall. (It’s also a lot of fun to use!)

 

 

Let us know if you have any other questions about fees and how Airbnb spends them in the comments section, below. We love to get your feedback.

 

 

*The Airbnb host service fee may be different in certain cases, and is typically higher for hosts in Italy and for hosts who have a Super Strict Cancellation Policy.

272 Replies 272

@Jane627  I agree with you!  They ask if you support the living wage pledge, and you say yes, and then they take a cut of it.

 

@Peter1687  I've considered that, but I'm concerned that there will be guests who won't pay.  And then I'd be out of pocket because I will pay my housekeeper her full living wage.  Have you had experience in getting the cleaning payments?

@Ann72I haven't had any guests refusing to pay, but I must say I only use it for optional extra services, i.e. I only arrange the requested service after the guests has accepted the costs.

@Peter1687 Thanks for this.  If I went that route, I would have to make it explicit in the description and the messaging and ask guests to accept it ahead of time.  I'm sure that if I showed them that their booking fee would be reduced, they would be fine with it.  But there would of course be the one-offs who would change direction once the fee was requested.

Diane697
Level 1
New Zealand

I am really surprised to read these negative reviews about Airbnb. A 3% commission structure is very generous if you compare it to other operators who are charging up to 25%.

The emails are quite frequent but I just delete them when I do not have time to read them. I am comfortable with my rates and will not drop them at this stage. Just delete them and move on.

Totally agree, thats exactly what i do.

Karen953
Level 3
Manawatu-Wanganui, New Zealand

This isn't about the fee it's about the additional service fees, read from the start. No one has said they have an issue with the 3% rather than the inconsistent service fee.

I agree with you Diane! 

David1303
Level 2
Auckland, New Zealand

What a lie, it is going into your back pocket

David in Auckland, Airbnb is in business to make a profit and has invested millions/bilions in computer technology and tech staff to bring this platform to the masses so that the some of those masses can make a profit too from a spare room. Why is that wrong? They are entitled to a return on their investment just as any successful business is.  Why don't you compare it, say to your local supermarket or bank---those are only there to serve you because they make a profit & they make far more than 3% gross profit or they couldn't stay in business. Remember that airbnb's commission earns them 3% Gross profit which is not 3% Net profit.  Net profit is derived from what is left after all epenses from gross profit.  Imagine the salaries of Tech experts and rent on just modest offices. 

As a host, where else could you get worldwide exposure, 24/7 at such little cost?

John1179
Level 2
Devonport, Australia

As other hosts have pionted out 3% is good. My pricing is changed constantly to reflect the demand, even though I set low prices Airbnb always suggest that I lower my rate, I dont as it is my place at my price, it would be more informative if instead of letting me know guests have booked else where, to tell me the occupancy level within my area. 

My occupancy is running well above 70%, each month for the last 3 months (June is 91% with 6 days to go). I know a lot of commercial properties would be glad to get half that for this time of year.

Airbnb is a great platform that charges very little fee, and allows me to have total control, yes my rates are low at the moment but I am getting bums in beds and keeping my cleaner employed over winter.

When the season picks up I already have a list of guest that have stayed and possibly return, or more importantly they will refer their friends. Thats better than having a high rate the does not get booked.

Cheers

John

 

Helen427
Level 10
Auckland, New Zealand

@Airbnb 

 

What progress has been made to fix the IT Glitches so we can have regular Guests booking again to pay you the 3% fees?

 

Been very quiet with bookings here in NZ because of IT Glitches. 

Cutting out the market that uses Microsoft/ Windows mobile devices has not been a smart move

 

 

 

 

 

I’m pretty happy with the fees as the compare favorably with other companies but I would like to know if Airbnb pays their fair share of taxes. Which country is the company registered in and what tax rates do they pay? I’d like to think they are a socially responsible company but that’s not what I’ve heard. 

@Tom385 

No, Airbnb absolutely does not pay its fair share of taxes, which is why hosts in most of the world - apart from the US and China - contract with Airbnb Ireland UC. (Hosts whose country of residence is Japan, contract with Airbnb Global Services Ltd (Airbnb GSL), also an Irish registered company)

 

Airbnb pays just 12.5% corporate tax on profits made in Ireland (a miniscule part of its operation) However, since around  2013/14 -  courtesy of a handy little tax avoidance scheme known as the "Double Irish" - they pay 0% tax on profits made outside Ireland, but channelled through Dublin. Yes, you read that right. Zero per cent. 

 

Oh, that’s disappointing. I’d be interested to hear how  Airbnb justifies this.