Is Airbnb holding rental fees longer in order to collect interest on it?

[Mark5]

Why does it take so long for Airbnb to direct deposit the rental money to your bank account? In most cases, they have already collected the money a month in advance?

[Clare0]

I'm sure they get the float on $'s collected in advance.  Part of doing business.  I can't imagine forwarding cash to hosts in advance of a reservation....Could you imagine the scams that would be perpetrated on guests? I can see it now:  People creating phony listings (expensive ones, no doubt) accepting reservations, getting the cash and see ya!  Laughing all the way to the bank! How would Airbnb protect guests if not by holding their money in escrow until 24 hours after checkin?

You don't get the money until you deliver the goods.  

[Dave-and-Deb0]

I just wanted to add to @Clare0's comments.  I know this has been an issue for many becuase they see it as Airbnb making a killing off of interest charges because they collect the payment at the time of the booking.  I am glad they collect the money at the time of the booking because if they waited a couple of days before arrival of a guest, it would be a lot easier for the guest to cancel and Airbnb would have a hard time collecting money depending on the cancellation policy.  

Cheers

Dave

[Clare0]

Good point @Dave-and-Deb0!  And, one last thing,  I think that most people book about 3 weeks out or less and given what interest rates have been, I can't imaging that Airbnb is making a "killing".   They just got $1.5  Billion in venture capital money...I think that's more important to them. 

[Deb0]

YES!

FYI: VRBO pays at the time of booking, not a day after check in. My absolute favorite part about VRBO.

Sorry AirBnb, I love you, but I do wish you would not hold our money for so long.

[Dave-and-Deb0]

Hi @Deb0,

I have not posted on VRBO yet but any tips on whether to go annually or a percentage?  Would love to know!

Thanks

Dave

[Paul4]

@Dave1

Good question.  A basic listing on either VRBO or HomeAway costs about $399.  Discounts may be available and discounts for listing on both are available.  The Pay Per Booking (PPB) listing incurs a 10% fee per booking (possibly an additional 2.5% CC processing fee as well).  So with a PPB once you exceed $3990 in bookings, or if you think you would, it would make sense to go with a subscription. 

[Kevin46]

The annual fee is definitely the way to go with VRBO. Their payment system takes an additional 3% so per booking cost is about the same as Airbnb, but you get the money within a couple days of payment direct to your account. You can also break the payments into chunks so a guest can pay half up front to hold and the balance a few weeks out.

Other advantages:
-manage your own security deposits, YOU decide what is refunded and when.
-more flexible seasonal and event pricing.
-better local tax handling (shown as separate fee from rental cost)!
-better descriptions and information presentation.
-clearer instructions and reminders for checkin and checkout processes.

[Momi0]

Hi Deb

My best friend post 50 plus homes on VRBO  and enjoys the simple fact that when a guests checks in on any of her vrbo listing, the monies have been collected and paid that very day of check in. I am still asking 6 months later to Airbnb as to why a guests can stay in my home and I dont' get paid until sometimes after 38 hours have passed from check in.  Its never 24, its much longer than that.   If a guest check ins at 3pm. at a hotel, the hotel is already paid, if a guests checks in with one of our local Bed and Breakfast here in Hawaii, my girlfriend the owner has already gotten paid before the guest even arrives....yet we are paid after the guest has checked in, woken up, eaten a delicious breakfast, goes to the beach, checks out, and I still have not been paid...how is that right? 

I am seriously considering not allowing ONE NIGHT stays anymore ....this being one of the reasons.  I know most Hawaii hosts don't allow ONE NIGHT stays for various reasons, but late payments was one of the reasons.  Thoughts on why this is policy to pay Hosts the next day?  Everything else is great....its just this one thing. Thanks for your time in reading my post.  Aloha

[Deb0]

Hi @Momi0 I agree on the one night stays, I usuallually don't allow them unless the calendar happens to have a one night gap between bookings. 

Since VRBO pays promptly and Airbnb holds the money for so long I have set up my calendar to encourage more VRBO bookings. On VRBO I have a 2 night minimum stay, but on Airbnb I have set up a 3 night min for reservations with dates two months or more in the future. That way if I do get an Airbnb rez and my money will be held for months at least it will be a more desirable one. As the available dates get closer i reduce the min back to 2 on Airbnb. I'm hoping to eventually switch my listing to entirely 3 day minimums to reduce turn over and laundry chores / costs but that hasn't worked out...yet.

That said, I prefer the Airbnb platform, guests and community. I'd love to only list on this site but for now I need both sites to keep my calendar full. Flipkey helps a bit too but their website is a disaster!

[Lorna51]

Can anyone tell me if Airbnb earn interest while they hold my money. 

[Jeff158]

@Lorna51 they wouldn't be very good at business if they didn't, I have guests that pay 6 months in advance, nice little earner for airbnb.

[Lorna51]

Hi Thanks for this. I used to work in the financial industry and such money was always treated as client money and should be held in a non interest bearing client money account. No sure how it works with the travel industry but in effect the only money that belongs to Airbnb are the charges they make both to the property owner and the renter. Such charges cover the management and holding of the money. The remainder of the money is actually the client's until they hand it over client and they should not be gaining interest from our money.  There is very little alternative with Airbnb as sometimes you have to book in advance to get the property you want. In my case sometimes they hold it for up to 10 months. It might not be a lot of interest but if you add everyone's money to the pot it is huge.

[Mel141]

Just had a conversation with Airbnb about this subject.  They collect the money, which translates to millions if you add all the properties they handle.  So, from a business standpoint Airbnb have the potential to make huge profits off a product that belongs to us, the hosts while we wait months for the money.  

I have a hard time believing that this money sits in a non-interest bearing account for months.

I'm really not impressed and told them that VRBO do not hold my money.  For example, June and July bookings through VRBO have been paid into my account after the customer pays.  The only portion they hold back is the security deposit until the client has rented without any damages to said property.      

[Tony562]

what happens to the money Airbnb hold if they go bust? Is it held in a clients account?