Demystifying Airbnb fees: How to understand the final cost before booking

Over a decade ago, Airbnb disrupted the hotel industry as a vacation rental platform. It simplified the searching and listing process for travelers and hosts, connecting those looking to rent out their homes (or rooms in their homes) to millions of people worldwide.

Here at TPG, our staff is split 50-50. Some of us love the platform for its person-to-person connection, affordability when traveling with large families or groups and unbeatable amenities — name a hotel that can offer you a private pool, backyard and kitchen for an affordable cost. The list goes on.

Related: Everything you need to know about staying at an Airbnb right now

Others avoid Airbnbs altogether, citing reasons such as the lack of elite status benefits and potential quality differences between homes — what happens when your Airbnb doesn't quite match up with the listing photos?

Related: Hotels vs. Airbnb: Which should you book during your summer getaway?

Arguably the most notable reason that people avoid Airbnbs is the multitude of fees that get tacked on at checkout — raising the original listing price exponentially. In some situations, an Airbnb may end up being more expensive than a hotel. From service fees to occupancy taxes to cleaning charges, we're here to demystify all things related to Airbnb fees, including which fees are universal across all listings and the fees that are potentially negotiable.

Service fees

The first type of fee we'll discuss is service fees (found on most Airbnbs). In other terms, this is the guest service fee that Airbnb sets. Since it's free to sign up for an Airbnb account, the service fee takes care of Airbnb's platform, 24/7 customer service, security features and more.

Now that you know about service fees and where they come from, let's talk about the two ways a service fee can be paid.

Split-fee structure

If you're a host, you can decide to split the cost of the service fee between you and your guest. This is typically the fee structure that hosts will choose.

Daily Newsletter

Reward your inbox with the TPG Daily newsletter

Join over 700,000 readers for breaking news, in-depth guides and exclusive deals from TPG’s experts

Email address

Sign up

Submitting...

By signing up, you will receive newsletters and promotional content and agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.

However, note that the costs are not split evenly. Most hosts will pay a 3% service fee of the booking subtotal before taxes and Airbnb fees. Note that this increases for Airbnb Plus hosts, Airbnbs in Italy, hosts with strict cancellation policies and more. This fee is automatically taken from the earnings.

Meanwhile, the guest service fee will depend on many booking factors but will be under 14.2% of the booking subtotal cost.

Host-only fee

Some hosts may opt to take on the entire service fee themselves, exempting the guests from paying this fee altogether. The host-only fee will range from 14%-16%, with the final price dependent on various factors and will automatically be deducted from the host's payout.

While you'll find service fees on most Airbnb listings, you could message and ask your host to take on the host-only fee rather than the split-fee structure.

Are service fees refundable?

In general, the service fee is refundable if you meet all of the following criteria:

• You cancel within 48 hours of booking.
• You haven't already canceled three reservations in the last 12 months.
• The reservation you're canceling doesn't overlap with another reservation in your account.
• The total nightly rate is fully refundable according to your host's cancellation policy.

There are exceptions, of course. Some hosts may be more generous and can allow a service fee refund 14 to 28 days before check-in. For bookings in Italy and South Korean travelers, these are the criteria you must meet to receive a service fee refund:

• You cancel before check-in.
• You haven't already canceled three reservations in the last 12 months.
• The reservation you're canceling doesn't overlap with another reservation in your account.

Occupancy taxes

Occupancy taxes are another fee you'll see tacked onto listings. These fees are defined by the city, county and state and are exactly the same fees that apply to local hotels in that area. Airbnb charges value-added taxes (VAT, JCT and GST) for customers in certain countries, but these taxes are included in the total cost of the occupancy taxes.

Note that occupancy taxes and fees are mandatory, and Airbnb does not profit whatsoever. However, it's up to the local government to set the exact tax, so the occupancy fee is nonnegotiable.

Cleaning fees

The last fee you'll find at checkout is the cleaning fee. Perhaps the most controversial fee out there is a one-time charge set entirely by the host — meaning Airbnb does not profit either. Instead, the cleaning fee will go directly to the host's payout and is intended to pay for the cleaning expenses before arrival and after checkout.

Some hosts will opt to clean their listings themselves (resulting in a cheaper cleaning fee), or others may hire professional cleaners.

While it's rare to find a listing that doesn't charge a cleaning fee, this fee could be potentially negotiable by messaging the host before booking. But, again, note that the cleaning fee is not a way for Airbnb to make extra revenue and will be paid directly to the host.

Other common Airbnb fees

Besides those top three standard Airbnb fees, there are a couple of other optional charges that you may find with your booking:

• Pet fee: Some hosts may charge extra for bringing your furry friends. Note that some properties do not allow for pets whatsoever, so be sure to check the fine print.
• Extra guest fee: If you're bringing more guests than the set number (as defined by the host), the host may decide to charge an additional guest fee per person.
• Security deposit: Airbnb or the host may implement a security deposit based on the home's features or timing of the booking, refundable once there's no property damage during your reservation. You should always make the security deposit payment on Airbnb and never take the transaction offline.

These fees may be negotiable but will be entirely dependent on the circumstance and host.

How to see the final Airbnb price before checkout, including taxes and fees

When searching for an Airbnb, you can use the "Price" feature to filter out listings by nightly price. However, some customers may find this frustrating as the nightly price does not include the additional taxes and fees mentioned above and will vary from listing to listing.

While there's currently no way to see an "all-in price," including all of the taxes and fees, when conducting your initial search, you can see the total price before you press "Reserve." Then, simply click on the listing, enter your dates and number of guests, and find the clear breakdown of the additional charges you'll face upon booking.

Related: Best credit cards for Airbnb stays

While this isn't a perfect solution and can be time-consuming for guests shopping for the absolute best price, this is a way you can find the total cost before you begin the checkout process.

Related: Best ways to earn points and miles on vacation rentals with Airbnb and VRBO

Bottom line

Airbnb certainly has its pros and cons, but with many more pros to note for guests looking for unique and unforgettable stays that hotels can't offer. While the fees may turn you off from booking through Airbnb, consider that hotels also charge occupancy taxes set by the local government. The only other costs you'll potentially face as an Airbnb guest are the service fee and cleaning fee. So while it's true that sometimes Airbnb isn't the more affordable option compared to hotels, you can check out the total price before you commit to booking your reservation.