What happens to your hosting fees

[Airbnb]

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.

[Kym6]

Before you started with Airbnb, did any of you do your due diligence research about the service fee and other related fees? How much % you would lose. I research this company and I went meetings on how to become a host, had questions answered.  I think it is definitely fair and maybe @Susan17, (I don't want to be a know it all) Have done a new story on your property or changed photos of your property. It may help but we are very quite down under as well. We are in winter.

[Susan17]

@Kym6 

Thanks Kym, but I started with Airbnb in 2010, when Airbnb fees were a fraction of what they are now, so any due diligence I did then, would be very outdated now 🙂

The lack of bookings many small, independent hosts have here has nothing to do with our listings, or our performance, and everything to do with the city being grossly over-saturated with Airbnb listings since at least 2-3 years ago. And any host whose listings aren't bang slap in the city centre - where Airbnb concentrates its searches, is scuppered altogether. 

[Kym6]

Ok I have been host 3 years so not as long as you. Anywho, Best of luck for your bookings.

[Karen953]

When we stated as guests and then hosts with airbnb there were no service fees just the flat rate. This isn't about due diligence it's about changing the rules to obscure, inconsistent rates. 

[Bert60]

Hi Susan

I have been hosting since 2012, mostly in London in the first few years and am a Superhost too.

Whilst appreciating you have some grievances maybe my story will help to get to the bottom of your lack of bookings.

In the early years my prices were good enough for me to make some pretty decent profits, running upto 6 properties at a time, mixing whole property and room bookings in a moving jigsaw.. it was great fun.

By the third year, as Airbnb became a big story I noticed how many thousands of extra hosts had come online and this coincided with a decline in my bookings.

i lowered prices but it became obvious that one of the simplest economic laws was in action: supply and demand! In this case much more supply which meant much lower prices. I closed down my London places over a period of time as the profit declined to a point where it was no longer worth it. I now only host in Cardiff where I live.

Maybe this is the issue because it is not Airbnb’s job to decide your price level and they cannot force guests to choose your place. Even with your great record guests will always to some degree, be price sensitive so worth checking out your competition if you haven’t already.

I do think you’re being a bit harsh with some of your comments.

I have had a few dealings with Airbnb support both as host and guest...variable service but on the whole acceptable.

As you said, they are the biggest and most hosts don’t have too much choice about using them.

Tripadvisor and Home & Away are also decent though.

Regards

Bett

[Susan17]

@Bert60 

Thanks for taking the time to share your experience Bert. I agree with all you say, but even when I've tried dropping my prices to rock-bottom, it made no difference whatsoever. Bottom line is, when you're buried so far down the searches that nobody sees you - and often, not appearing in searches at all - you're not going to get bookings, no matter how great a host you might be 🙂

I'm in the process of diversifying at the moment, but like everything, it takes time and doesn't happen overnight. If you think I'm being harsh though, have a look at some of the posts here in the CC, and you'll see that there are a lot of very, very unhappy hosts out there who really aren't having a good experience with Airbnb either. Many thousands of them, actually. 

Thanks again for your input. Much appreciated 🙂 

[Theo83]

Dear Airbnb, 

Not a very useful post.

Lets keep it strictly business ! 

What you do with your income is your busines, and what I do with mine, is my business.

Dont embarrass yourself (and us your supporters) with such drivel in public.

Now get real and lets get back to business. !!

[Robert1741]

I asked some questions below

[Ann72]

@Theo83  You are literally my favorite person in the world right now.

Thank you for the laugh, and thank you for getting right to the point.

"Drivel" is the mot juste.

[Robert1741]

https://en.wikipedia.org/wiki/Airbnb gave a lot of answers.   What are employees paid?  

Do any other AirBnb's have a ride in an airplane like I do as one of the items for extra fee?  AirplaneBnB.

How many offer BREAKFAST?  It is after all AirBnB nor AirB.

https://www.airbnb.com/rooms/24890502?s=67&shared_item_type=1&virality_entry_point=1&sharer_id=43460...

Thanks

[Lary1]

Airbnb is a business like any business. They've put huge amount of money is developing a concept, building a plateform that becomes more and more intuitive because they listen to their host and value our feedback. 

As a small business owner I realize that there is a cost of doing business. Airbnb has an excellent support them who are very helpful and knowledgable and that does cost money. Marketing and Resource Development are critical for a business to last, be successful and remain relevant in today's world. 

3 years ago, on a whim, I posted my home on Airbnb just to see. Last year it was booked 220 days and it could have been booked more if I didn't have a 5 day minimum and pad a day for cleaning. Airbnb has provided me with the best job I've ever had. And, because my house is always booked, I was able to buy a condo in the same neigborhood with the income from Airbnb. 

Yes, Airbnb does send out suggestion to lower pricing and get more booking but I decided I wanted to sell value over price and it's worked out well. 

Airbnb also files and pays the state sales tax and county tourism tax for me and that cost the consumer 13% so that's something to complain about. 

And you do have other choices for this service that are just as big or bigger than Airbnb and I can tell you their fees are higher and their customer service often gives the wrong information. 

You do have choices. Not long ago this opportunity wasn't even available. You would have had to spend a lot of money to advertising your rentail in all the markets your reaching.

Airbnb might not be perfect but it's good and none of you would have this opportunity to earn income this way without this plateform.  Honestly these comments over 3% seem ludicrous. Now it did read that experienced host are charged 20% so I do hope that's a typo and is meant to be 2%.

[Ann72]

@Lary1  All good, except no one is complaining about 3%, they're complaing about the more than 20% total collected by Airbnb from hosts and guests.

[Derrick47]

Dear Members

It is obvious that you have never run a BNB on your own. It is a very inexpensive altervitive to doing it yourself. The first website i had developed from myBNB to take care of all the bookings that cost $25,000.00 and that was just for a 4 bedroom BNB. Yes you can do a simple website for next to nothing. But if you want all the bells and whistles it cost plenty. To develop a website that takes care of your bookings,  schedules, marketing, cancellations complaints. Air bnb is cheap at twice the price. I get bookings that I would never get on my own and they resolve any problems. The service people are geat on the phone for the client and owner. By the way I do not work for Air bnb I am a independent owner and I am very happy with the service. 

Cheers 

Derrick

[Dave425]

I have been hosting for 7 months.  Thus far, much more profitable than just being a regular rental however I do take issue with certain things.  I had a guest that AIRBNB allowed to book same-day without verifying payment.  They told me as much on the phone the next day after I called them upon having received an email saying the guest had t paid and if he didn't respond with payment I would t get paid.  I was livid.  No f'ing way I would let anyone in my home without having payment upfront.  That is the most basic piece of the service Airbnb provides and they screwed it up.  This guest then proceeded to trash my house, causing $1200 worth of damage/extra cleaning fees.  I had all of 4 hours to Shell out that money and get my place back in order for my next guest.  They had the audacity to give me a hard time about the claim I made.  I had to fight and inspite of well documenting everything they still strung me along and said they would pay me $700, take it or leave it.  That's not how you treat someone with a perfect 5.0 rating who's listing is booked literally 97% of the time.  They are making a killing off of me which brings me.to next point of frustration.  No transparency with fee they charge guests.  I have no problem if they want to charge me a 3% fee, I'd pay close to that to process people's credit cards if I did it on my own.  But when guests are considering places and getting 20% tacked on top of my rates it's insane.  Im beating all the risk of someone trashing my home and they are taking 20% and the. Giving me a hard time when I ask them for help on a mistake they made??? Not cool.  I plan to give it a full year and im idding another property or 2 into the mix but I will watch closely.  My properties are super desirable 5 star properties in great central locations in Tampa Florida.  I will have zero issue going back to long term rental status and having less headaches.

[Ann72]

@Dave425  You hit every nail on the head.  I never lower my rates, but there are times when keeping my poker face on while hearing from a guest who is freaking out over the added fees is hard.  My party line is I'm sorry it doesn't suit your budget, but when I put myself in their shoes I get it.  And the measly payouts.  Everything is sweetness and light when it's thirty bucks or something, but when a guest cracked a new sink from one side to the other and didn't want to pay because they "didn't feel it was their fault," total radio silence from Airbnb.

I posted earlier about the costs I assume to run my places, at no charge to Airbnb, and the thought that they may soon dump the entire 20%+ fee on hosts is chilling.  I do think it's largely a great platform - I never would have done any of this without them.  But I own a commission-based business, and believe me, my top-earning clients are the loves of my life.