How Does Airbnb Work For Hosts?
Costs, Commissions & Inclusions
Are you a home owner considering hosting on Airbnb?
Do you need to know how it works for you as a prospective host before signing up?
Founded in 2008, there are now more than 6 million property listings in 81,000 locations across nearly 200 countries.
'Hosts' rent out shared rooms, private rooms, entire properties, unique spaces, B&Bs or hotel accommodation to travelling guests from anywhere in the world.
Approximately 500 million guests have travelled with Airbnb since 2008 with an estimated 100 million nights booked in 2017.
How Does Airbnb work?
Airbnb is an online peer-to-peer marketplace connecting travellers (guests) and local short-term accommodation providers (hosts).
Travellers from around the world search the platform for available properties or experiences.
How much does it cost to list on Airbnb?
It's free to list a property on Airbnb.
A host service fee (commission) is only charged upon confirmed bookings. Fees are deducted on a pay-per-booking basis.
How much does Airbnb take from a host?
The standard Airbnb host service fee is 3% per checked-in booking.
This covers the cost of processing payments and is deducted from the host payout. This can rise to 5% for some hosts in Italy or if the host has a 'super strict' cancellation policy (by invitation only).
VAT or GST may also deducted from your payout and is based on the total host service fee.
'The service fee for guests/travellers is anything up to 20% but is usually between 6-12%. It is shown to guests upon the booking checkout page.
Hosts can now choose to absorb these traveler fees in order to make rental prices more attractive to guests.
VAT (or JCT/GST) will also apply in countries where this is payable and is charged upon the total booking cost.
For Airbnb Experiences, there is a 20% service fee for the host. Guests are not currently charged a service fee to book Experiences.
What's included in an Airbnb listing?
As well as the standard listing for your property across the Airbnb network, your listing will automatically come with the following:
- Host Guarantee coverage of $1m in case of property damage.
- Host Protection Insurance provides liability coverage for up to $1m for every listing.
- 24/7 phone support.
What kind of property can I advertise on Airbnb?
Rental owners or managers can list almost any kind of shared accommodation space.
These include aparthotels, apartments, B&Bs, barns, boats, boutique hotels, bungalows, cabins, campers/RVs, campsites, castle, casas particulares, caves, chalets, condominiums, cottages, cycladic houses, dammusos, dome houses, earth houses, farm stays, guesthouses, guest suites, heritage hotels, hostels, hotels, house boats, houses, huts, igloos, lighthouses, lofts, nature lodges, pensions, planes, resorts, ryokans, serviced apartments, shepherd huts, tents, tiny houses, tipis, townhouses, treehouses, villas, windmills and yurts.
Hosts can match their property suitability to the new/upcoming Airbnb 'Collections' categories which include family, work, honeymoon, weddings, social stays, dinner parties, one-of-a-kind and group getaways.
How do I become an Airbnb host?
If you decide to list your property on Airbnb just sign up at Airbnb.com and follow the steps below.
How to register: Sign up for an Airbnb Account
• Sign in with Facebook, Google or your email address.
Add a birthday to show you are over the age of 18.
• Sign the Airbnb T&Cs and agree to non-discrimination equally regardless of age, race, religion, nationality, ethnicity, gender, disability or sexual orientation.
How to register your property on Airbnb: The Basics
• Add space type, maximum number of guests and location.
• Add property type:
Apartments - apartment, condominium, casa particular (Cuba), loft, serviced apartment.
Houses - house, bungalow, cabin, casa particular, chalet, cottage, cycladic house, dammuso, dome house, earth house, farm stay, house boat, hut, lighthouse, pension, shepherd hut, tiny house, townhouse & villa.
Secondary Units - guesthouse, guest suite & farm stay,
Unique Homes - barn, boat, camper/RV, campsite, castle, cave, dome house, earth house, farm stay, house boat, hut, igloo, lighthouse, pension, plane, shepherd hut, tent, tiny house, tipi, train, treehouse, windmill & yurt.
Bed and Breakfast - casa particular, farm stay, minus, nature lodge & ryokan.
Boutique Hotels and more - boutique hotel, aparthotel, heritage hotel, hostel, hotel, nature lodge, resort, & serviced apartment.
Guest Numbers, Rooms & Beds
No of Bedrooms (Studio, 1-50 bedrooms)
Bed Types (Doubles, Queens, Singles, Sofa-beds)
• Add number of bathrooms
• Add property address
• Confirm map pin location
• Add amenities
Essentials - towels, bed sheets, soap, toilet paper & pillows.
Wifi, shampoo, closet/drawers, TV, heating, air-conditioning, breakfast, coffee, tea, desk/workspace, fireplace, iron, hair dryer, pets on site & private entrance.
Safety - smoke detector, carbon monoxide detector, first aid kit, safety card, fire extinguisher & lock on bedroom door.
• Add spaces on property for guest use
Pool, kitchen, washing machine, dryer, parking, elevator, hot tub, gym.
Set The Scene
• Upload photos.
• Add property description.
• Add name of place.
• Add host photo.
• Add mobile number (and verify).
• Review guest requirements.
• Set house rules.
• Review $1m host guarantee message.
• Review availability calendar message.
• Confirm if you are a new or existing host. How often do you want to host.
• Add notice required for bookings. Check in times.
• Add how far in advance can guests book.
• Add how long can guests stay. Minimum & maximum.
• Add pricing. Smart Pricing. Base rates.
• Add special offers for first guests.
• Add long term discounts.
• Review local laws and taxes.
FAQs For Airbnb Hosts
How and when did Airbnb start?
Airbnb started in 2008 when 2 friends, Brian Chesky and Joe Gebbia, began hosting guests in their San Francisco apartment.
What does Air b and b mean?
Airbnb originally referred to 'Air bed and breakfast' and was the former website name (airbedandbreakfast.com) before it was shortened to the present-day Airbnb.
The founders rented out airbeds to their first three guests — Kat, Amol and Michael —in their San Francisco apartment during the nearby International Design Conference to raise extra cash to help pay their rent.
Who can host on Airbnb?
Pretty much anyone who owns or manages an accommodation space to be shared with others.
What are the Airbnb host requirements?
Airbnb hosts are required to write detailed listings to satisfy clear property expectations and set guest identification verification requirements.
Hosts are also expected to supply safety equipment like an information card, first-aid kit, fire extinguisher, working smoke alarm(s) and carbon dioxide detector(s).
How Airbnb host payment works?
Payments are made to hosts one day after guest check-in. Hosts that offer local 'experiences' for guests have funds released 24 hours after said experience.
If the host has chosen PayPal as their payment method the payout should be received the same day.
If the host receives payment by bank transfer, this can take up to 5 days.
'Host Early Pay' is available for bookings in the US whereby payout can be initiated 48 hours after a booking is confirmed. A small fee is added for this facility.
What is the Host Guarantee?
The Airbnb 'Host Guarantee' is extra peace of mind for hosts which covers up to $1m coverage in the unlikely event of property damage by guests.
It automatically covers every booking on Airbnb so hosts don't need to do anything.
It is not insurance and does not cover cash/securities, pets, common areas or personal liability so hosts should explore extra cover for the aforementioned.
What is the Host Protection Insurance?
The Airbnb 'Host Protection' is separate insurance liability cover for up to $1m in the event of third party claims of bodily injury or property damage. Your will automatically be covered when listing a property on Airbnb.
The coverage is issued by certain underwriters at Lloyd’s of London and Zurich Insurance/partners and is currently available for hosts in the Australia, Austria, Belgium, Canada, China, Croatia, Czech Republic, Finland, France, Germany, Hungary, India, Ireland, Israel, Italy, Japan, The Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, South Africa, Sweden, the UK and the US.
Who cleans an Airbnb property?
The host is responsible for cleaning a property. Many hosts employing a local cleaner or property management company to carry out housekeeping duties.
Is Airbnb legal?
Yes.
However the legal ramifications of home-sharing are constantly changing and some countries have set strict laws for renting vacation/holiday rentals by a maximum number of days. A few cities and islands have gone one step further and actually banned short-term home sharing altogether.
Most countries/regions/towns are simply going down the route of legal regulation of Airbnb-style accommodation spaces and may require hosts to obtain official licences to become an a short-term rental provider.
Prospective Airbnb hosts should enquire about any local/national rental restrictions
If you are a tenant and considering subletting a rental home on Airbnb you will need to get permission from the property owner, check insurance coverage and liaise with other neighbours if in the same building.
What is the Airbnb host cancellation policy?
Hosts can generally choose from 3 default cancellation policies: Flexible, Moderate and Strict.
Each differ in timescales for full and part refunds to the guest.
• Flexible - Full refund for cancellations up to 1 day prior to arrival.
• Moderate - Full refund for cancellations up to 5 days prior to arrival.
• Strict - 50% refund for cancellations up to 1 week prior to arrival.
A 48 hour grace period will apply to 'strict' cancellation policy bookings from April 2018. This will permit guests to cancel a booking within 48 hours penalty-free if the stay is more than 14 days away.
• Super Strict (by invitation only) - 50% refund for cancellations up to 30 days or 60 days prior to arrival.
• Long Term - First month non-refundable. Refers to bookings of 28 days or more.
Cleaning fees are always refunded if the reservation is cancelled before arrival.
The Airbnb service fee is refundable, up to 3 times per year, if cancellation is made within 48 hours of booking.
Hosts can see the number of reservations a guest has cancelled over the previous 12 months when the guest submits a request to book.
What are the top ranking factors on Airbnb?
Knowing how to rank your property higher is important, especially as Airbnb claims that there are 'nearly 100 different factors for every listing in every search'.
For many of these a host will have no control over but applying the following factors will help to position your listing higher on the search results pages:
- Build your credibility by verifying yourself using as many means as possible (e.g. email, telephone, social media, ID)
- All new listings get a boost however getting a booking in your first month on the platform is essential
- Regularly updating your availability calendar
- Competitive pricing (use a dynamic pricing tool)
- Quick response time to enquiries within 24 hours
- Writing an engaging property title will increase your chances of an initial click to your listing. Airbnb will 'consider it a good sign if a guest clicks on that listing to learn more'
- Adding an attractive lead image will also help to get an initial click to your listing
- Applying 'Instant Book' where guests can book without having to make an enquiry
- Minimise booking cancellations
- Gather as many great guest reviews as possible
- Applying a low minimum stay will help your listing be visible for short stay searches.
- Applying a monthly discount will help your listing be visible for guests looking at long stays
- Asking previous guests to add your property to their future (wish) 'Lists' for future stays.
How long will it take for my Airbnb listing to become active?
It takes between 6-24 hours for a listing to become active and visible on search.
How does Airbnb make money?
Airbnb charges a host service fee of 3-5% and a guest booking fee of 6-12% for every booking confirmed on the platform.
Accommodation hosts who offer a paid local Experience are charged a service fee of 20%.
The sheer scale of exponential growth and bookings confirmed have made Airbnb the Goliath it is today and as funds are generally only released on the day of check-in, the company earns interest on holding funds from the time of booking.
Who are Airbnb's leading competitors?
The leading competitors to Airbnb are Booking.com, the HomeAway network and TripAdvisor.
Please note that all information is correct at time of publishing however this is subject to immediate change so hosts should check all of the terms and conditions when listing a property on Airbnb.