What will Airbnb charge me as a host?

Airbnb takes a commission for every booking your listing has. However how much of a cut depends slightly.

What fee do Airbnb hosts Pay?

Airbnb says it takes 3% of the hosting fee plus VAT (in the UK 20%) so If you charge £100 per night then the hosting fee will be £3.30. See here for more details on Airbnb help section.
note - Airbnb will round up it's figures so if your hosting fee is £6.60 this will be rounded up to £7.
[caption id="attachment_125" align="aligncenter" width="691"]Airbnb charges hosts a percentage of the listing price per night Airbnb charges hosts a percentage of the listing price per night[/caption]

Airbnb guest fees

The guest also pays a fee of 6-12% of the total price called the guest service fee. Which listing pay 6% and which pay 12% you ask? I am not sure and to my knowledge Airbnb has not revealed this information. Most of the listings I have checked hover around the 14% mark the lowest I have seen was 8% and that was on a shared room for £10 a night. [caption id="attachment_123" align="aligncenter" width="723"]Airbnb can pay hosts via Paypal or Direct Credit into your bank account Airbnb can pay hosts via Paypal or Direct Credit into your bank account[/caption]

Airbnb payments via Paypal

Airbnb will pay you your hosting money the day after the guest checks in. There are several methods of payment to choose from however the main two are via Paypal or Direct credit into a bank account. What's important here is the time it takes for the money to reach you. If your getting paid by direct credit into your account then this can take up to 5 working days (occasionally longer in my experience) however Paypal takes only a couple of hours if not instantly. You can then transfer into your bank account and have the money in a couple more hours after that. There are two major reasons why you might want to choose Paypal instead of Direct credit into your bank account. The first being the time it takes (Paypal can take only a couple of hours versus 5 days or more for direct credit). The second could be tax planning. You might want to consider that Airbnb is a US company and will be collecting its revenue in US dollars. It will then need to convert that money to GBP to pay you.

How to get started as an Airbnb host

So you want to be an Airbnb host and your looking forward to making some money. Well here is what you should do.

1. Register an account with Airbnb. Register here and get £16 free Airbnb credit. 2. Add a new listing under your profile. Write a detailed description of your room/whole place. Try and describe factually and keep in mind what a traveller will be most interested in. [caption id="attachment_133" align="aligncenter" width="781"]Create your Airbnb listing and start making money in the sharing economy Create your Airbnb listing and start making money in the sharing economy[/caption] 3. Your going to need to upload pictures for your room. Get the Airbnb professional photographer to take some pictures of your listing. This is a free service and more importantly having verified pictures on your profile should push you up the search rankings. You can apply for the free photographer here. 4. Make sure the room is ready for your first guest. Obviously the room should be as clean as possible with fresh sheets (think what you would expect from a hotel). But also your going to want to remove as much clutter as possible. A guest is not going to be impressed by your nick-naks and family heirlooms filling up all the draws and wardrobes. Take them out and put them somewhere else. 5. Make sure you are available to greet your guests. Now is a good time to mention any house rules. 6. I try to leave my guests well alone during their stay. If I happen to see them I might say "can i get you anything?" but thats it. I don't provide an 'experience' I leave the great city of London to do that for me. [caption id="attachment_134" align="aligncenter" width="758"]Make sure your listing is has clean sheets, towels, and free wifi Make sure your listing is has clean sheets, towels, and free wifi[/caption] 7. You may want to enquire with your guests at what time they will be checking out on their last day. Some do need to catch a flight home and may need to leave at a very early hour. I do allow guests to leave luggage with me if they are getting a late flight home. 8. Re-set for the next guests. Make sure the room is adequately ventilated and the sheets are fresh. 9. You will need to leave guest feedback. You should do this as soon as Aribnb allows you so your guest feels they should do the same.

Your first Airbnb listing

New listings get a boost in rankings so you may find that you a few enquires on the first day or two. You mat then find that enquires drop off suddenly and then you will need to work on your ranking.

How many of my guests are first time Airbnb users?

Airbnb is still relatively new to most people in the UK and Europe despite being very popular in the USA and some other places for a few years. Consequently many of your customers will be using Airbnb for the first time and will not have any reviews from previous hosts (I estimate that about 50% of my guests are Airbnb Virgins). Screen Shot 2015-05-14 at 16.28.05 So you get an enquiry from a potential guest asking to stay a few nights but there is not profile picture and almost no information on their profile. I always ask them to upload a profile picture and to tell me why they are coming to London and if they can tell me a bit about themselves. This puts you in the driving seat and lets the Airbnb newbie know what is expected of them as a bare minimum. Anyone who refuses to answer or upload a picture I decline. You don’t want to be unreasonable as get too intrusive in other people’s business but some basic information like this can reveal a lot about somebody’s intentions and how they might behave in your property.

Declining a guest request to stay

I had a potential guest who actually had a reasonably complete profile and actually had a good review from a previous host. I asked him why he was coming to London and he said to meet up with some friends. The booking was for one night (a Saturday) and his profile said he is a student. I said it was ok to stay but reminded him that check-out is 11am. He wrote back and asked if he could have a late check out and even offered to pay any extra. I got the impression he wanted a late check-out as he planned to stay out late in to the night with his friends and most likely this would mean some medium to heavy drinking. I wrote back to the guests saying that I didn’t think it was appropriate that he should stay with us as other guests might not appreciate him coming home at a late hour and declined his request but wishing him all the best. It’s a shame as he probably is a really nice man but our listing just didn’t suit his purposes and it was unfair on everyone to accept his reservation.

Mention your house rules up front

It’s probably a really good idea to mention certain house rules when guests first enquire about a booking. I always mention that there is no use of the kitchen allowed. This does put off some guests but better that than them get really disappointed when they arrive. It’s worth doing this as many guests don’t completely read the profile before enquiring.
When a guest arrives it is another chance to mention the house rules to them. Be clear that this is their bathroom, this is their bedroom, do not go in this room, etc.
 

How do I price my Airbnb listing?

What price you should charge depends on your market but there may be other factors to consider what price you are going to charge. Other factors might be:

  1. The cost to clean the room and sheets
  2. Your free time taken up to meet the guests, check them out etc.
  3. The rent you could have received from a local long term renter
[caption id="attachment_139" align="aligncenter" width="867"]Try searching for your listing. If yours is too hard to find then you will struggle to get bookings Try searching for your listing. If yours is too hard to find then you will struggle to get bookings.[/caption]

Your location could determine the type of guest you will get no matter what service you provide

My listing is in Newham, East London; a reasonably central suburb it is none the less the wrong side of London if you are a tourist (my main market).
I could try and aim more towards customers who are in town on business rather than a holiday but so far I have had so few of these clients and don’t believe these types of customers are using Airbnb in any great numbers in the UK (maybe this will change).

Know your competition

My competition is whole of Greater London. Most of my customers are not familiar with the many different boroughs of London so will simply be searching for London. But this could be reduced to the inner three zones of London - 1, 2, and 3. My listing is in Zone 3. For anyone nor familiar with London a small apartment in Zone 1 can set you back as much as million pounds. [caption id="attachment_138" align="aligncenter" width="723"]To maintain full occupancy you will need to set your price at a discount to the market To maintain full occupancy you will need to set your price at a discount to the market[/caption]

How I work out my Airbnb listing price

This is how I decide my price so I stay fully occupied. I do a search for the whole of London and reduce the price until my competition falls below 100 My Results are below. Most of my customers will be paying in Euros so we use € currency.
  • Price €99 = 1000+ other listings
  • €79 = 888 listings
  • €69 = 648 listings
  • €59 = 264 listings (a huge drop in the number of listings from €69)
  • €49 = 109 listings
  • €44 = 56 listings
  • €39 = 10 listings
I have priced my listing at 44 Euro’s to maintain a maximum occupancy. I could consider increasing to 49 Euro’s if say the number of listings at this price level drops below 100. If my listing was prime central London then I would increase my price to 59 euros and expect to do well. I certainly would not increase the price to 69 or above as my bookings would most probably fall to zero.