Starting October 27, 2025, Airbnb will be changing how it charges commission. If you’re a holiday let owner with a listing on this platform, this update will impact how much you pay Airbnb, and how much you earn.
Here’s what’s happening, and what it means for your short term rental business.
What’s Changing?
Airbnb is phasing out the “split-fee” model and replacing it with a “host-only” fee of 15.5%.
Split-fee
The split-fee model currently charges hosts 3% from the price. A service fee of 14.1% to 16.5% is then added to the price and charged to the guest.
Host-only
The host-only fee will charge single fee of 15.5% which will be deducted from the hosts price. The guest will no longer pay a service fee when placing a booking.
What is the service charge for?
Service fees contribute to the cost of maintaining Airbnb’s platform and operations. This includes payment processing, marketing efforts, and customer support.
This means:
- Hosts pay a single fee of 15.5% of the price.
- Guests no longer pay a separate Airbnb service fee.
- The change takes effect on October 27, 2025 for Property Management System (PMS) users.
- It becomes mandatory for all hosts by 1st December, 2025.
✅ Pros for Holiday Let Owners
1. Better Guest Experience
Guests will see the full price upfront, without a surprise service fee added at checkout. This transparency can lead to higher conversion rates, especially for price-sensitive holidaymakers.
2. More Competitive Listings
This price change will mean listings will appear on a level playing field, assisting competitive priced accommodation to be easily spotted by price sensitive guests.
Industry Insight: Simple pricing could also support any discounts or special offers you choose to apply, especially for those last-minute bookings.
3. Simplified Accounting
A single commission line makes it easier to understand your true costs per booking. For holiday let owners managing multiple properties, this helps with cleaner budgeting and forecasting.
⚠️ Cons for Holiday Let Owners
1. Higher Commission, Lower Margins
Previously, many holiday let owners paid only 3% in fees. Jumping to 15.5% could wipe out profit unless you adjust your pricing on this platform.
2. Need to Adjust Rates Carefully
If you raise your prices to absorb the new fee, your property could appear more expensive than competitors. But if you don’t raise them, your net income per booking drops significantly.
3. Short Time to React
If you’re using a PMS, the switch happens October 27, 2025 whilst this isn’t too long away, such changes can be amended quickly and simply on a PMS. For the remaining hosts, many will need to take control and invest time to review their pricing in readiness for the full switch for all hosts by 1st December 2025.
Understand the updates and stay in control of your earnings.
💡 What Should You Do Now?
- Review Your Nightly Rates
Adjust your pricing to reflect the new 15.5% fee. For example, if your current nightly rate is £100 , consider increasing it to £115–£120 to maintain your margins. - Use Your PMS Tools
Most PMS platforms let you automatically adjust pricing by channel. Use this to mark-up Airbnb rates without affecting other platforms. - Monitor Your Bookings
Keep an eye on your Airbnb conversion rate after the service fee change. A drop may indicate your new price is too high, or your value proposition needs tweaking to sit confidently amongst comparable listings. - Consider Diversifying
Relying on Airbnb alone is risky. This change is a reminder to take control of your own success. Why not use a channel manager to list your holiday let on other platforms, this will broaden exposure for bookings. Ultimately, investing in your own direct booking website will help you as the host and owner, stay in control of your bookings, building more resilience into your holiday let business and reducing commission costs in the long term.
Airbnb vs Direct Booking Website: What’s Best for Your Holiday Let?
Industry Insight – One of the biggest hurdles of introducing your own direct booking website is gaining enough visibility (traffic) to your own website to encourage bookings. There are a growing number of independent marketing platforms now available to assist owners achieve their own booking success. Most offer this service for a single subscription fee to list a holiday home on their site. In turn, these sites drive traffic to view listings for independent holiday homes and encourage the visitors on the site to click through or send an enquiry to book directly on the owners website.
Whilst this has not been confirmed, many professional hosts and platforms predict that the ‘Additional Charges’ such as, the cleaning fee will remain a function for hosts to add after this planned service fee change. Hosts should be aware that the service fee charge is taken off the subtotal (including these additional charges). Protect yourself and spend time understanding your changeover costs and consider adjusting them in line with the change.
Final thought, the new host-fee service charges may call for many hosts to consider whether its time to simplify their prices to an all-in approach (holiday cost and housekeeping included) for their offering to provide simplified pricing which could convert more bookings.
Industry Tip – Encouraging longer stays will help you reduce service fee charges and cleaning costs.
This change isn’t the end of an era. Many professional hosts agree that the simplified and transparent pricing will convert more bookings. Preparing yourself for the change will ensure you are ready and can continue generating a positive return on this platform.
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