Airbnb is undoubtedly one of the biggest travel startups to emerge from the sharing economy in recent years. In fact, there are over seven million listings worldwide on the platform and on average over 2 million guests stay on Airbnb every night. Its unparalleled success is, in large part, due to the fact that anybody can become an Airbnb host via the platform.
Whether your offerings are simply a spare bedroom, a cottage out in the countryside or even a whole fleet of luxury beachfront villas, up to now, Airbnb has helped hosts publish more than 6 million listings worldwide and welcome more than 500 million guests to their properties.
We love Airbnb! It’s a respected channel for diversifying your vacation rental bookings and reaching a wide audience. That’s why we’re partners and our Airbnb management software comes with a channel manager to synchronize your listings (via API integration) and ensure you never experience mix-ups or double bookings.
There is no denying that Airbnb is a fantastic platform for finding suitable guests to fill your property’s vacancies. It’s global, it’s easy to use, and even better, it requires very little time or effort to set up at a very low cost – or so we believe.
Airbnb has now made some new changes to the way their service fees are set up. Previously those charges could add up to 25% between host and guest and the lion share of this amount always fell to the traveler. However, since then Airbnb has switched gears and almost completely eliminated guest service fees. Instead, the host now has two options and can decide whether they want to adopt the new host-only fee model or go back to a shared host and guest fee.
In this article, we’re going to break down the costs of using Airbnb with real money examples. We’ll crunch these numbers in order to compare them with the costs of using complementary channels, for example, those involved with creating your own professional vacation rental website with Lodgify. This will help owners and managers to determine what route is best for their vacation rental journey.
This is how the two different service fee options are set up in detail:
The newly implemented Airbnb host-only fee is now set as the default whenever somebody creates a new Airbnb account. Of course, existing accounts can choose to activate it as well. This fee is solely paid by the host which means that guests are no longer charged additional costs on top of their booking total.
Airbnb’s Service Fees page states that the minimum host-only fee starts at 14 % and can increase until up to 20%. Additionally, a 2% fee may be added on top of this if the host has a Super Strict cancellation policy.
Shared host and guest fee
If you prefer the old Airbnb fee model, you can also choose to stick to the “shared host and guest fee” set-up instead of shouldering the host-only fee.
In this case, hosts are subject to a charge of 3% or more (automatically deducted from the booking payout amount), every time a booking is finalized. At the same time, guests who reserve accommodation via the Airbnb platform are also required to pay up to 13% in service fees – on top of their booking total.
The exact amount is calculated using different factors such as booking subtotal and length. Additionally, having some specific listing characteristics will require guests to pay a higher service fee.
Often, after initial success on the site, there comes a time when Airbnb hosts will begin to wonder what lies beyond the app.
What other possibilities are out there?
For some Airbnb users, seeing the kinds of results that can so easily be achieved leads them to think more strategically about the potential of their vacation rental business.
They might ask themselves questions such as:
“How much could I earn if I took Airbnb fees out of the equation?”
“How can I get more bookings?”
“What will I do the day I get a repeat guest wanting to book?”
When you look for the answers to these questions online, many search results will arrive at the same conclusion: creating your own vacation rental website can actually complement your existing Airbnb activity and get you more bookings.
Lodgify vs. Airbnb
At this stage, it’s useful to point out that Lodgify and Airbnb are very different services – and that means they do not have to be used exclusively. Many Lodgify users maintain active Airbnb accounts alongside their own vacation rental website.
Airbnb is a distribution channel, meaning it is a great way to create visibility for your rental, as it will be seen by thousands of guests who are already searching for accommodation in your specific area.
Lodgify, on the other hand, is software that owners and managers use to create their own professional vacation rental website; accept online bookings and payments and manage all reservations and inquiries from one place.
Advantages of using Lodgify to manage your Airbnb listing
Managing property listings and bookings across different sites can be quite tricky, especially when if you have your own website for your vacation rental business. You need to ensure that all the calendar availability, bookings and rates are always up-to-date.
So how can you manage everything from one place and save time? Not only does Lodgify sync directly with Airbnb via API, but it also provides you with additional functionalities.
1. Invest In Your Own Direct Booking Channel
One of the main advantages of creating your own website via Lodgify is that it allows you to accept your own online bookings and payments for your vacation property.
Aside from this, having your own direct booking channel is hugely important for creating and maintaining your vacation rental brand, and is an ideal place to showcase your reviews from all external channels in one place.
A vacation rental website made with Lodgify will also allow repeat guests to book directly with you for their next visit – rather than going via listing sites and paying those additional fees mentioned earlier.
Investing in your own channel, such as your own website, is a must for your business’ long-term goals. Not only will it help you to gain independence from online travel agencies, it will also enable you to build a reputation and credibility, and, it costs a lot less in the long run than solely sticking to sites like Airbnb.
2. Avoid Double Bookings
Hotels have long been using channel managers to ensure that room availabilities and calendars are updated on any external listing sites when there is a booking made. For vacation rental owners, it’s the same principle. For example, if a guest makes a reservation on Airbnb, it will automatically be updated on your website. Channel managers are essential in your vacation rental business to ensure that everything is in sync.
Managing your vacation rental business is easy when you can use just one central reservation system for all your bookings and inquiries. Lodgify’s Channel Manager has a two-way synchronization with Airbnb, which means you don’t have to manually update your availability calendars.
You’ll be able to keep your website’s calendar up-to-date by instantly importing bookings into Lodgify, which will synchronize your availability. When you receive a booking on one channel, all the rest will automatically update to show your guests the correct availability. Double bookings won’t occur anymore and you’ll be able to easily manage all your reservations from one single platform.
3. Maximize Profit with Rate Markups
While it’s free to list on most OTAs, the majority do charge commission per booking. A channel manager marks up base rates on specific channels to cover any fees or commissions.
You can also use them to maximize profits through dynamic pricing. For example, pricing by demand and day of the week makes it much more likely to fill the gaps in the calendar and increase revenue.
When you change a rate on Lodgify’s channel manager, it will be updated instantaneously on Airbnb. This will prevent guests from paying too little or too much when booking your vacation rental.
4. Answer Your Guest’s Messages
Communicating with your guests during their booking process or before their arrival is vital. It’s the making or breaking point, and shows your guests how you are as a host. But when guests are messaging you from different sites and platforms, it can get a bit confusing and complicated.
With Lodgify’s message integrations, you won’t lose track. Any message you receive or send on Airbnb will automatically appear on your Lodgify account. Likewise, you can communicate with your Airbnb guests through your Lodgify account.
This way, all messages are synced into one centralized platform. If a guest messages you on a non-listing platform such as Facebook messenger, it will also appear on your Lodgify account, along with your Airbnb inbox.
5. Import and Export Properties from Airbnb to Lodgify and Vice Versa
If you’re just getting started with your vacation rental business, you’ll want to diversify your bookings by creating your own website and promoting your property on platforms like Airbnb.
If you have already created your properties in Lodgify and you want to create an Airbnb account or you wish to add a new listing in Airbnb, you can do it directly inside your Lodgify account. Or if you already have an Airbnb account and want to showcase your listing(s) on your new Lodgify website, you can also import all of your listings.
Lodgify’s two-way integration allows you to export a property’s name, description, photos, amenities and rates from Lodgify to Airbnb and save time.
6. Ensure Consistency Across Your Channels
Constantly manually updating your listings across Airbnb and all of your other channels can be a repetitive bore and is also prone to error because there’s a higher risk of posting inconsistent prices or promoting the wrong descriptions.
If a potential guest finds the wrong information on your Airbnb listing and the specifics have changed, it’s highly unlikely that they will continue with the reservation. Additionally, they might think you’re unorganized and untrustworthy.
Lodgify instantly synchronizes with Airbnb so it’s far less likely for errors such as overbookings or double bookings to occur. Once a room or property has sold on one channel, our channel manager will automatically remove availability for those dates on the other online channels. This will avoid any inconsistencies on your listings – and the best part, it’s quick and easy!
7. Build Brand Awareness
Since a channel manager saves so much time, it helps vacation rental businesses to expand their reach to more channels.
More exposure usually leads to more bookings especially with the immense amount of traffic you can get from exposing your property on Airbnb. Simply being on Airbnb increases awareness of your property as guests navigate through different listings on their booking journey. Some of those guests may even be compelled to visit your vacation rental’s official website and make a direct booking.
Having a channel manager is essentially an easy, effective and affordable way to boost bookings and enhance the ongoing marketing efforts of a vacation rental business.
8. Manage Multiple Accounts on One Single Platform
There are many tools that vacation rental owners like you can use to help streamline your processes. Instead of managing your business through different platforms and accounts, it’s worth checking out options that allow you to do everything from the same place.
With Lodgify, owners and property managers can manage all their bookings from one place with an integrated channel manager while having their own vacation rental website.
The Lodgify channel manager provides two-way API connections to Airbnb to ensure rates, availability, and bookings are correct across all your channels. There is no maximum number of accounts you can connect to and all of them are included in the subscription price.
You won’t need to switch between your different Airbnb accounts anymore, but instead, manage everything from Lodgify.
Cost of Lodgify vs. Airbnb
Some owners may think it’s impossible to compare the costs of two different services such as Lodgify and Airbnb – but it’s not.
While Airbnb takes a commission per booking from both the host and the traveler, Lodgify charges a monthly fee which varies depending on how many properties you have, or if you choose to pay monthly, yearly or biennially.
So, putting this into numerical terms: If the average Airbnb booking* had a value of $1.500, the total guest and host fees would come to around $315. With a $315 fee, you would only spend $77 a month for your own website with Lodgify.
To better explain how Lodgify’s software can save you money, we’ve done some more calculations.
How much the customer pays vs. what you receive
Let’s take a look at some hypothetical sums to help paint a better picture of how the two services’ fees are divided up between guests and hosts in case of the shared host and guest fee – plus, what both services really cost you.
Lodgify Professional Plan
Credit Card Fees
Say you’re an Airbnb host only who rents out your apartment for two weekends a month, at $100 a night – your monthly Airbnb income is $400. Of that amount, Airbnb will take a combined $84 from you and your guest to cover its fees. If you suddenly decide to rent your apartment for more nights that month, higher fees will be charged. For six nights, the fee would increase to $126; for 10 nights, $210; and for 20 nights, $420.
If you’re a Lodgify user running the same business, for four nights’ of renting, this charge would be around $44 ($32 for your monthly Lodgify subscription, plus credit card processing fees). For a six-night stay, the fee would only increase by $6; for 10 nights, the total fees you would incur would be $62 and for a 20-night rental, just $92 extra would be paid in fees. That’s because, unlike with Airbnb, your Lodgify subscription cost will stay the same, no matter how many nights you rent each calendar month.
Overall, it’s clear using Lodgify for a big chunk of your bookings can help you (and your guest) save plenty of money in the long run. For a monthly revenue of just $300, you will save $22 if your bookings come through your Lodgify website. As this amount increases, so do your savings. For a monthly revenue of $1,000, you’ll save $148; if you’re earning $2,000 per month, you’ll save $328; and for owners who bank $5,000 per month, you’ll save a whopping $868 compared to Airbnb.
Airbnb fee calculator and how we worked it out
We calculated these figures by choosing some hypothetical monthly earnings:
$100, $200, $300, $400, $500, $1,000, $2,000 and $5,000 – to cover hosts at different ends of the spectrum. Of course, some hosts may earn less or even a lot more than our invented numbers here.
We then calculated 18% of the given amounts to cover the “top tier” of the 0-20% guest fees that Airbnb charges.
To find the Airbnb host fee, we calculated 3% of the monthly earnings (or the “lower tier” when it comes to host fees).
The total Airbnb fees derive from adding these two numbers together.
The flat monthly rate of our Professional plan that we charge customers with one rental who are on a yearly plan – $32.
To this amount, we added the average credit card processing fees charged by external payment gateways such as Stripe and PayPal (around 3%).
As the Lodgify monthly fee never changes, the saving difference constantly grows as monthly revenue increases. That means that with just one or two Airbnb bookings, you could pay for a whole year of Lodgify fees.
What is and isn’t included with Lodgify and Airbnb fees
We’ve already discussed some of the benefits of using Airbnb, but one hugely important asset we haven’t mentioned yet is this: Airbnb does the marketing for you. For this reason, it’s an ideal solution for many busy hosts who want to rent out their home, but do not have enough free time to dedicate to marketing activities. By fully completing a listing, Airbnb’s algorithm will ensure that your property shows up somewhere in the search results for your city or town.
The full list of factors to improve search ranking on Airbnb can be found here.
On the other hand, with Lodgify, you’re in control of your own marketing. But don’t fret – Lodgify helps owners every step of the way. From building your professional website to receiving direct bookings, there are tools in place to help your marketing efforts from the very first day.
Lodgify websites are:
Optimized for search engines
Easily integrated with social media sites and marketing tools.
What’s more, with your own website, you’re truly in charge of your vacation rental brand and we’ll help you to build it. Our vacation rental owners’ blog is a one-stop-shop for everything related to marketing, achieving direct bookings and the guest experience. Bursting full of resources like articles and free eBooks, owners can refer back to our content time and time again to help overcome their biggest obstacles.
We’ve already seen the numbers: a vacation rental software like Lodgify works out much more affordable for owners with long-term business goals. And as you’ll be saving hundreds or even thousands, you’ll be able to invest in additional marketing if needed.
What to take away
There are no doubts that using Airbnb is one of the best ways to get your vacation rental booked up quickly. As it is one of the world’s largest vacation rental platforms, it’s a fantastic distribution tool to get your property in front of the right viewers at the right time.
Nevertheless, it’s becoming more important than ever for owners and managers to have – and maintain – control of their own booking channel, such as their own website. This is essential in order to establish a brand identity, cater to repeat guests, and have somewhere to direct inquiries that come in via other channels. In addition to this, a professional website allows owners to stand out from the crowd in an overly competitive industry.
If you’re ready to see how much you could save, start a free 7-day trial of Lodgify. You’ll soon see just how easy it is to build your own vacation rental website, take direct bookings and manage your reservations from one place with our software.
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