Understanding the service fees that booking platforms charge hosts and guests is imperative to successfully manage your short-term vacation rental. Because fees vary from platform to platform, hosts can maximize earning potential by understanding what fees they pay and can provide better value to guests by ensuring these fees are competitive. We'll look at fees charged by Airbnb, Booking.com and Vrbo.

Service fees charged by booking platforms are typically based on the nightly rate, cleaning fee and any additional fees a host may charge (pet, linens, management, etc.), excluding applicable taxes. We refer to this total as the booking subtotal and is the amount used by the booking platform to calculate what the host and guest will pay as a service fee. A guest's total payment will include the booking subtotal, any guest service fees and applicable taxes. Here are the fees for hosts and guests by booking platform:

Airbnb

Airbnb has two fee options. The first is a split fee where both the host and guest pay a percentage of the booking fee. The second is a host-only fee where the host pays a percentage of the booking fee, and the guest is not required to pay a booking fee. In the split fee model, the guest pays between 5-20% (the average is 15%) of the booking subtotal and the host pays 3% of the booking subtotal. In the host-only model, the host pays 15% of the booking subtotal. Let's take a look at the options:

Split Fee

In our example below, the guest and host service fees are calculated on the booking subtotal of $170.00. We assume a 3% Host Service Fee, a 15% Guest Service Fee, State Tax of 6%, and Local Tax of 9%

Host-Only Fee

In our example below, the guest does not pay a service fee, and the host service fees of 15% is calculated on the booking subtotal of $170.00. We assume a 15% Host Service Fee, State Tax of 6%, and Local Tax of 9%

Booking.com

Booking.com does not charge guests a service fee, nor do they collect or remit taxes in Texas. Instead, the host incurs all booking fees and is responsible for all tax remittance. The service charge can range from 10-52% but the average is 15% of the booking subtotal. In our example below, the guest does not pay a service fee, and the host service fee of 15% is calculated on the booking subtotal of $170.00. We assume State Tax of 6% and Local Tax of 9%.

Vrbo

Vrbo has two fee options. The first is an annual subscription plan for hosts which costs $699.00 per year. By paying for the subscription, hosts avoid the pay-per-booking commission fee but pay a 3% payment processing fee. The second is a pay-per-booking option where the guest pays 6-15% (but we found bookings with a 19% fee) of the booking subtotal and the host pays a 5% commission of the booking subtotal and a 3% payment processing fee of the total payout.

Annual Subscription

In our example below, the guest pays a service fee of 15% that is calculated on the booking subtotal of $170.00. The host would not pay a service fee but would still pay a payment processing fee of 3%. We assume State Tax of 6%, and Local Tax of 9%.

Pay-Per-Booking

In our example below, the guest and host pay a service fee that is calculated on the booking subtotal of $170.00. The host would pay a 5% service fee and a payment processing fee of 3%. The guest would pay a 15% service fee. We assume State Tax of 6%, and Local Tax of 9%.

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