Airbnb vs Booking.com
This article examines Airbnb vs Booking.com by concentrating on the main features that an Online Travel Agency (OTA) should offer. The data has been collected from Airbnb’s and Booking.com’s websites and help articles.
Owner and Guest Fees
Owner fees:
Airbnb doesn’t charge any credit card fees.
There are two types of fees charged by Airbnb: the split fee and the host-only Fee. Split Fees are divided between guests and hosts, usually between 14% and 16% for guests and around 3% for hosts. It costs around 15% of the booking rate for the host-only fee, while there is no charge for the guests. In most countries, including the UK, the host-only fee has become mandatory as of 2020.
Airbnb charges up to 20% of the booking value as a service fee for additional features like hosting experiences.
Guest fees:
Hosts on Airbnb can charge guests an extra fee for cleaning services. Guests are also encouraged to rate the cleanliness of their Airbnb accommodation after they check out.
Airbnb guests may not be aware of the cleaning fee until they check out. The cleaning fee depends on the nightly rate and length of stay.
Tax rules depend on local regulations and differ from city to city.
Owner fees:
Booking.com doesn’t charge any credit card fees.
According to Booking.com, property hosts pay between 10% and 25% commission, with an average rate of 15%.
The hotel base fee is 15%, which can rise to 18% if the host uses Booking.com’s member service.
Guest fees:
Booking.com doesn’t charge any commissions to guests. They allow property managers to charge extra fees for cleaning. However, they charge between 10% to 25% commissions to hosts for add-ons and cleaning fees.
You need to check No to the question “Is this already part of the room/apartment rate?” if you want to get fees added to the price and shown separately in the invoice.
Tax rules depend on local regulations and differ from city to city.
Host & Guest Protection
Liability Insurance
Airbnb’s liability insurance is part of AirCover for Hosts. This insurance covers up to $1 million in case of injury or damage to guests or their belongings while staying at your home. Co-hosts and cleaners are also included. Additionally, this insurance covers damage to common areas like lobbies and nearby properties caused by guests (or others).
Damage Protection
If a guest damages your place or belongings during an Airbnb stay, AirCover for Hosts provides $1 million in coverage. Airbnb’s Host Damage Protection covers damage caused by guests, co-hosts, or cleaners to your place or possessions. In addition, it protects against cancellations due to damage caused by guests (or others) and cleaning costs incurred as a result.
Security Deposits
Guests may encounter two kinds of security deposits when booking an Airbnb. The first is Airbnb’s $1,000 cap on security deposits that begin two days prior to the stay. Guests won’t be charged, but an authorisation hold will be placed on their payment method. Airbnb will email the guest if it cannot authorise the hold, giving them 12 hours to provide an alternative payment method. Airbnb will release the hold 14 days after the check-out or before the next guest’s arrival if there is no damage.
The other option is host-required security deposits. The amount will range between $100 and $5,000, which the host determines. Airbnb places no authorisation hold, so the host is responsible for this.
Partner Liability Insurance
Zurich Insurance and its global partners underwrite this insurance. The coverage is up to €1,000,000 for European countries, £1,000,000 for the United Kingdom, and US$1,000,000 for the US and other countries. In the event of an incident involving more than 20 guests, the coverage is capped at €20,000,000.
To be clear, this is not a protection against property damage.
Partner Liability Insurance covers only:
- Bodily injury (e.g. if your guest breaks their arm slipping in the shower and holds you responsible).
- Third-party property damage (e.g. if your guest accidentally leaves a tap running and causes water damage to your neighbour’s apartment below).
What is Not covered:
- Damage and/or harm caused by pets (e.g. your guest’s dog injures a neighbour).
- Your own personal injury (e.g. you break your arm tripping over a step at the property).
- Damage or injury from something done intentionally (not an accident).
- Your own personal property (e.g. a guest breaks your TV or table)
It is your responsibility to ensure that your property is adequately insured in case of damage, as Booking.com does not offer separate insurance protection for its property owners.
Booking’s liability insurance does not extend to hotels.
Damage Deposit
A damage deposit is a predetermined sum paid by a guest that will be refunded if the property is not damaged.
Booking.com doesn’t collect security deposit payments for property damage on your behalf. Rather, you should make direct arrangements with guests and charge them either before or on arrival by cash or bank transfer. You need to share your damage deposit details on your house rules and also in the “additional fees & charges” section.
Booking.com can only ensure that your guests agree to your house rules before finalising the reservation. You can also report a guest’s misbehaviour, and Booking.com will consider blocking the guest from booking again with you.
Pre-Payment Deposit
In the case of partially refundable or non-refundable reservations, guests can pay either a portion or the total amount. So, you won’t lose revenue if they cancel after reserving and paying since they won’t receive their pre-payment back.
You’ll be able to impose a pre-payment on the guest’s card through Booking.com if you accept credit cards. Otherwise, you’ll need to get in touch with your guest and set up a payment.
Credit Card Pre-Authorisation
You can choose to pre-authorise and hold a certain amount of a guest’s card for non-refundable or partially refundable bookings. You can hold this amount as a guarantee if the guest doesn’t show up.
In case the guests’ cards can’t be pre-authorised or charged for deposit/pre-payment, you can mark them as invalid. Depending on when reservations have been made, the guest will have a limited time to introduce another valid credit card. If they fail to do so, you can cancel the booking so you will not be charged commissions.
You can also opt for no deposit, pre-payment, or pre-authorisation, but this is risky.
Smart Pricing
With Airbnb Smart Pricing, a property listing can be priced according to relevant data and factors. The system automatically adjusts the listing’s price based on market demand, but only within a set range of minimum and maximum prices. A number of factors are taken into account, along with demand and season, including the rental location, size, amenities, and listing quality.
It will then calculate an “ideal” price based on the analysed information.
Booking.com allows you to automatically set rates for rooms with multiple occupancy options by using the derived pricing feature.
You only need to create a standard rate for each room according to its base occupancy or maximum occupancy. When occupancy increases or decreases, the system automatically adjusts the price by adding or deducting a percentage per person.
Cancellation Policy
Guest cancellation policy
There are six cancellation policies that you can offer your guests on Airbnb. These policies are called Flexible, Moderate, Strict, Long Term, Super Strict 30 Days, and Super Strict 60 Days.
With the Airbnb Flexible option, guests can get a full refund within 24 hours before check-in.
According to Airbnb cancellation policies, refunds do not include the rental service fee.
Host cancellation policy
You can cancel an Airbnb instant booking for free when:
- The guest makes it clear they are likely to break one of the host’s house rules, such as bringing a pet or smoking.
- The listing doesn’t fit the needs of the guests – for example, if it’s not suitable for families or pets.
- The guest has several unfavourable reviews or a lack of profile information that concerns the host.
It may be necessary for you to submit proof of cancellation in these situations. Only three cancellations per year will be allowed for Instant Book reservations.
You can also cancel for free for unavoidable reasons, such as emergency repairs, serious illness, proofing the guest’s intention to break house rules, epidemics, or government travel restrictions.
Suppose you failed to prove any of the above reasons or cancel a booking without any excuse. In that case, you will be charged a percentage of the booking price based on the cancellation time. There may also be other consequences, such as blocking the listing’s calendar on the affected dates. In the worse scenario, you may lose your Superhost status and have your listings suspended or removed.
Guest cancellation policy
On Booking.com, property owners can offer three types of cancellation policies:
Fully flexible: Your guests will only pay while staying at your rental and can cancel free of charge within your specified time frame.
Customisable: With this policy, you can determine how much guests will be charged if they cancel after a specific date.
Non-refundable: If you choose this policy, guests who cancel, change, or don’t show up will be charged the full price.
Host cancellation policy
If you have to cancel a guest on Booking.com for any reason, you can:
- Explain to the guest that you cannot honour the reservation, and show them how to cancel without penalty.
- Call Booking.com and explain that you need to cancel a booking – which costs you extra charges.
You won’t receive any automatic note in your reviews saying “this host cancelled” like those of Airbnb hosts, and you won’t lose your preferred status like you would with Airbnb.
Listing Rules
- You need to specify:
- The exact location of the property.
- The number of guests you can accommodate.
- How your property looks like by providing photos.
- Pets are allowed with a fee, which might differ from listing to listing. Assistance dogs are allowed with no discrimination.
- Airbnb encourages its hosts to provide clean accommodation. “Airbnb also encourages its hosts to add a cleaning fee in their total rate to cover the cost of hiring a cleaning service or buying cleaning supplies.”
- You need to prepare:
- The list of your facilities and amenities.
- The layout of your property, including sleeping arrangements.
- Correct and complete address.
- At least one high-quality photo.
- Your property name can’t include any of the following:
- Punctuation marks like quotation marks (”), asterisks (*), and “at” signs (@).
- Capitalisation of whole words (except acronyms).
- Inappropriate words.
- House rules can be set for guests in these five categories: children, pets, smoking, parties or events, and quiet hours.
Review System
Up to a limited extent, the Airbnb review system provides guests and hosts with insights about who they will be booking with. Both guests and hosts have 14 days to write a review.
The Airbnb review system appears as a five-star rating system with guests rating the accuracy of descriptions, cleanliness, communication, location, check-in, and value for money. In case of concerns about an Airbnb, guests can filter accommodations by reviews before booking.
Unlike Airbnb, Booking.com doesn’t offer reviews for guests that should be rated by hosts.
After guests check out, they have 90 days to review their stay. Guests rate their stay at your vacation home on a scale of 1 to 10.
They are also asked to rate the property in six categories: cleanliness, comfort, value for money, facilities, location, and staff. This part is optional, and your Guest Review Score is not affected by any of these ratings.
In addition, guests can provide optional ratings regarding different topics, such as WiFi and breakfast, which doesn’t count towards your Guest Review Score.
Payment Process
Using its centralised payment process, Airbnb collects money from guests and pays hosts automatically 24 hours after check-in. You can choose how to receive payments when setting up their accounts, and the payout may take longer depending on the chosen payment gateway. Fees and deductions will always be included in the payment.
For guests who stay 28 days or more, you will get paid monthly instalments starting 24 hours after check-in.
Due to the lack of a centralised payment system, Booking.com does not collect money from guests. So, the host is responsible for collecting payments, whether it is by credit card, bank transfer, or cash. For this reason, property managers usually charge deposits or pre-authorise payments to ensure credit card details are entered accurately so they can receive payouts.
You will need a payment processor in order to accept credit card payments.
Special Features & Services
Instant Bookings
Upon signing up for an Airbnb account, the Airbnb Instant Book feature turns on and automatically accepts reservations. You can, however, disable Instant Book and decline a reservation if a guest has unreasonable requests or a low rating. Users of Instant Book are rewarded with higher search rankings on Airbnb.
Airbnb’s Experiences
Airbnb offers Experiences – aggregated local activities that local people host. It presents a long list of experiences, such as restaurants, adventures, and creative activities. This feature can help attract travellers looking for Airbnbs and Experiences in your area, thus increasing your occupancy level.
Host Community
Airbnb’s Host Community provides property managers with opportunities to share their experiences of listing their properties on Airbnb.
Airbnb Plus
Airbnb Plus features some of the best quality Airbnb homes with hosts known for their great reviews. These vacation rentals are picked based on their elegant design, consistent amenities, and spotless maintenance.
Airbnb Superhost
Airbnb Superhost programme recognises and rewards its highest-rated and most experienced hosts. The benefits of being a Superhost include increased visibility, increased earnings potential, and premier rewards.
Instant Bookings
Booking.com hosts can receive instant bookings or review guest requests before accepting or rejecting them. To skip Booking.com’s instant booking, hosts need to choose “All guests will need to request to book” in their account settings.
Preferred Partner Programme
This Programme provides greater visibility to the top 30% of Booking.com partners in return for a small increase in commission. These vacation rentals are picked based on their performance score, review score, and external prices.
Visibility Booster
Booking.com offers a Visibility Booster tool that helps your listing rank higher, wherever and whenever you choose to.
In exchange for an extra amount you pay, you can give your property a competitive edge in times of low sales or high cancellations.
Booking.com Promotions
By using promotions, you’ll be able to offer discounts tailored to your business needs. Booking.com allows you to create different types of promotions, such as the Free Nights Deal, Last-Minute Deal, Early Booker Deal, Basic Deal, Secret Deal, Black Friday Deal, and Early 2022 Deal.
Airbnb vs Booking.com: Which One to Choose?
You should think about the audience and type of accommodation you offer when choosing where to list your property. Consider also whether you need a more centralised approach to manage your short-term rentals, like with Airbnb, or more freedom, like with Booking.com.
Airbnb is a great option for first-timers looking to start slowly, perhaps with a spare room in their home. Airbnb gives property managers full control of who stays at their property and provides a streamlined payment process. Historically, Airbnb caters to a niche market, whereas Booking.com attracts a broader group of travellers. Therefore, Booking.com allows you to reach a larger pool of potential guests and receive more reservations. However, your Airbnb net revenue (revenue minus commission) per booking is higher than that of Booking.com.
All in all, remember that both platforms are not good at handling security deposits. So, you still need a Property Management System (PMS) for seamless rental operations, especially managing security deposits.
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