How Much Does Airbnb Charge Guests Vs. Their Competition?

Posted on December 9, 2017

The easiest way to answer the question posed by the title of this post is with a chart. So let's take a look at one:

A chart showing the fees guests and hosts pay to Airbnb and other vacation rental companies.

As you can see, they all charge different rates. You might be thinking that TripAdvisor is the best place to go if you're a host, and that booking.com is the best place to go if you're a guest. But before you leave this page with that assumption, I'd read the rest of this blog post if I were you and find out if that's really the case...

Introducing Airbnb and Their Competition

Large vacation rental sites like HomeAway, Airbnb and Booking.com absolutely dominate the vacation rental market nowadays. Even though there are no exact numbers, it’s safe to say that bookings through these sites make up by far the biggest piece of the pie, leaving other methods like direct bookings on individual websites far behind.

But what's making them so successful? It's simple: They get the majority of the web traffic. It’s virtually impossible to Google anything about vacation rentals without being bombarded with ads of at least one of the big ones – if not all of them. Look below and see for yourself.

Search results of popular rental services like Airbnb and booking.com.

So now the question is, how do they pay for that massive online presence? By charging fees. Let's look at their fees a bit closer, especially the guest and service fees.

From the point of view of the vacation rental sites, every transaction involves two parties: A buyer (the guest) and a seller (the host). Most vacation rental sites charge both the guest and the host a commission, which is always a percentage of the total booking price. Here’s how the four big ones charge people.

How Much Does Airbnb Charge Guests and Hosts?

The huge inventory Airbnb has accumulated in the last few years has partially been due to low host fees: Hosts pay3% of the total booking price, which Airbnb says is to cover their payment processing costs.

However, as a host you can easily end up paying more than 3%. The percentage hosts pay may go up to 5% depending on their cancellation policy. Then there's also a Google Ad program Airbnb is running, which may raise your fee up to 18% of the total booking price. But generally host fees are low, staying the same regardless of where your guest comes from.

An invoice from Airbnb showing how much money a host will earn.

Unfortunately when you look at the guest side, fees are higher. Airbnb's fees used to be in the range of 6-12% for the guest fee, depending on the total booking price. (The higher the total, the lower the percentage.) Recently however, the range has gone up to 5-15%, according to Airbnb's website.

Airbnb has chosen not to show hosts how much their guests are paying – presumably to prevent hosts from being shocked by how much money they're missing out on, which could lead hosts to cut out the expensive middle man and go for more direct bookings with their guests in the future.

How Much Does HomeAway Charge Guests and Hosts?

For the longest time, HomeAway was running a very complex pay-per-year ad system with multiple tiers, ranging from $199 all the way to $999, and no fees for guests. But recently fees have fundamentally changed. Currently, hosts can change between a yearly fee of $399 (with instant booking activated) or $549 (no instant booking), or a 8%-commission on every booking.

This sounds fairly simple, but it's only half the truth, the reason being that all payments are routed through YapStone, or Vacation Rent Payment. This causes additional fees of up to 4.5% per booking for hosts with subscriptions, or a total of up to 10% for the commission based model, depending on where your guest is from (international credit cards cost you 2% more.)

An invoice from HomeAway showing how much money hosts make when they rent out their property.

HomeAway gained popularity with travelers because there was no additional cost to book a home. But in 2016, this changed, and led to quite an uproar: The introduction of the so-called service fee led to a huge pushback from both owners and guests, and even resulted in a class action law suit. The service fee started on a sliding scale of 4-9%, but currently can reach 12% or more, as disgruntled owners and guests report.

How Much Does TripAdvisor Charge Guests and Hosts?

Listing on FlipKey, which is owned by TripAdvisor, will cost hosts a flat 3% commission per booking, regardless of the total booking price or origin of the guest.

An invoice from TripAdvisor showing how much money host earn using TripAdvisor.

And to make up for their low host fee, guest end up paying some hefty fees: Guests pay from 8-16% of the total booking price, which makes TripAdvisor the most expensive vacation rental site to book a property on out of the 4 we're looking at.

How Much Does Booking.com Charge Guests and Hosts?

Last but by no means least, the simplest one of all: Booking.com. (Read about what we think of Booking.com.) There's no fees for travelers, and a flat commission for hosts. In the US, this commission is 15%, with the option of paying up to 20% for “Preferred Partner” status and higher ranking in search results. In Europe, the standard fee is a bit lower at 12%.

Notable is the fact that the commission is only based on the amount charged for the actual rental, and not on the total paid (e.g. including cleaning fees) like with some of the others platforms.

The fees booking.com charges their guests and hosts.

As a logical conclusion, those higher host fees should lead to higher prices on Booking.com for identical properties than on other platforms. Booking.com tries to prevent this by enforcing price parity, but that’s a slippery slope which is in fact becoming illegal in more and more places.

Now that we've taken a look at 4 of the most used vacation rental sites, it's time to answer the big question.

How Much Does Airbnb Charge Guests Vs. Their Competition?

From the guest side, there isn’t that much of a difference between Airbnb, HomeAway and TripAdvisor. They all charge somewhere in between 5-15% of the total booking price. On the other hand, Booking.com is free for travelers, but this advantage is often times nullified by a higher listing price to offset the high commission for the host.

For hosts, Airbnb and TripAdvisor are clearly more interesting than HomeAway and Booking.com. A flat 3% fee is more preferable over the complex host fees of HomeAway – and multiple times cheaper than what Booking.com charges their hosts.

A fun fact to end with: We often see a roughly 10-12% higher price for properties on Booking.com vs other platforms. It looks an awful lot like owners are simply making up for the difference between 3% and 15% by adding that amount to the price per night – which essentially makes it a travelers fee.

So it turns out the fees of the 4 most used vacation rental sites are roughly the same in the end after all.

Note: If you're a host you should also consider the taxes and other expenses you may have to pay in addition to the fees mentioned here.

Share This Story, Choose Your Platform!

About the Author:

Picture of Markus
Proud father and husband, humble leader. Currently revolutionizing short-term rental management with GoNitely. Living in beautiful California close to San Francisco.

Recent Posts