Sure, Airbnb can help you connect with a rental property owner almost anywhere in the world and book a temporary reservation at one of their spaces. But let’s face it: Airbnb doesn’t do what they do solely out of the goodness of their hearts. They have to make money somehow to keep their service running. So how do they do it?
How Airbnb makes money
Airbnb makes money in two main ways. The first is by charging booking fees to guests who reserve rental properties to stay at through Airbnb. The second is by charging payment processing fees to hosts when guests rent their properties through Airbnb.
Similar to competitors like VRBO.com and Homeaway.com, Airbnb charges booking fees to guests who use its services to successfully reserve a rental property to stay at. These booking fees — also called guest service fees — are the major source of revenue for Airbnb on the guest side of things. Here are some things to know about them:
You are not charged anything for simply browsing properties for rent or making a booking request. You are only charged booking fees (or any other type of fee, for that matter) on Airbnb if a host accepts your booking request.
Booking fees typically range between 6% and 12% of the subtotal of your stay (nightly rate times the number of nights).
The booking fee percentage is based on how high the subtotal of your stay is. The higher the subtotal, the lower the percentage. This means that you save money on longer stays, relatively speaking, because you don’t have to pay Airbnb as much of your total accommodation costs.
In Albania, China, Iceland, Japan, Norway, South Africa, Switzerland, or any country in the European Union, Value Added Tax (or Japanese Consumption Tax, in Japan) may be applied to booking fees.
If you successfully book a property rental with Airbnb and then decide to cancel it later, your booking fees will not be refunded.
If your host accepts a booking that you made through Airbnb and then cancels it on you later, you can choose to take a refund. If you do so, your booking fees will be refunded.
If your host accepts a booking that you made through Airbnb and then cancels it on you later, you can choose to apply the payment that you made to a new booking. If you do so, your booking fees will be adjusted relative to the subtotal of your new booking. Any taxes applied to your booking fees will also be adjusted accordingly.
Payment processing fees
Airbnb also charges fees to hosts whenever they rent out one of their properties through Airbnb, in order to cover the costs of processing payments. Also known as host service fees, payment processing fees are Airbnb’s primary method of earning money from hosts using its services. Here’s what we can tell you about them:
Hosts on Airbnb have to pay payment processing fees equal to 3% of the subtotal (nightly rate times the number of nights) of each reservation that they accept.
In Albania, China, Iceland, Japan, Norway, South Africa, Switzerland, or any country in the European Union, Value Added Tax (or Japanese Consumption Tax, in Japan) may be applied to payment processing fees.
If you complete a rental property booking through Airbnb and then cancel it, you may be entitled to a refund. If you are, the host’s payment processing fees will be recalculated according to the total price of your reservation minus the refund amount.
As a guest, don’t help hosts avoid Airbnb’s payment processing fees by paying them outside of Airbnb. This puts you at risk for being scammed, since Airbnb can’t track the transaction. It also violates Airbnb’s terms and conditions, so report any hosts that ask you to do this to Airbnb.
That’s a brief overview of how Airbnb makes money, and what it means for you whether you use the service as a guest or a host! Next, we’ll look at 9 other websites like Airbnb that you can try if you’re looking for something different in an online property rental service.