How much commission does Booking.com charge hosts?

How much commission does Booking.com charge?

Booking.com usually charges hosts a commission of 15 to 18 percent on every completed booking. The exact rate depends on your location, the type of accommodation and any deals you have made with the platform. In Western Europe and for holiday homes the rate is close to 15 percent as a base rate for most hosts, but in practice many hosts pay more because of the paid visibility options that Booking.com offers.

The commission is calculated on the total booking price excluding taxes, and is withheld automatically before Booking.com pays out. So you receive the amount after the commission has been deducted.

What about paid visibility?

Besides the basic commission, Booking.com gives hosts the option to buy extra visibility through the "Preferred Partner" programmes and "Visibility Booster". Those who take part in those programmes pay a higher commission in return for a better position in the search results.

Preferred Partner properties pay 18 percent or more in most cases. Booking.com does not make that threshold public, but it is an open secret in the host community that those who do not take part in visibility deals end up lower in the search results. Those who do take part pay more per booking.

There are also "Genius" discounts where Booking.com asks you to give a discount to loyal members of their loyalty programme. That discount comes entirely out of your margin, while Booking.com collects the same commission on the lower amount.

A worked example

Suppose your holiday home is occupied on average 20 weeks a year at an average rental price of 900 euros a week. That gives an annual turnover of 18,000 euros.

At a commission of 15 percent you give 2,700 euros a year to Booking.com. At 18 percent that is 3,240 euros. If you take part in visibility deals or give Genius discounts, it rises even further.

For comparison: if those same 20 weeks are booked entirely through direct channels, you pay no commission. The difference over a year is substantial, certainly if you take several properties or higher rental prices into account.

Are there other costs?

Besides the commission there are no fixed monthly costs for hosts on Booking.com. You only pay per booking. But there are a few things to watch out for:

• Credit card fees. If Booking.com processes the payment through its own payment system, a small percentage for payment processing may be withheld on top of the commission. This varies by market.
• Cancellation policy. Booking.com asks hosts to set a flexible cancellation policy in order to rank high. With free cancellation you run the risk of last-minute cancellations without any compensation.
• Hidden costs. If you do not invest in paid visibility, you end up lower in the search results. The lost turnover from lower occupancy is an indirect cost that you do not see written down anywhere but that plays a part all the same.

Direct bookings: 0 percent commission

Every platform such as Booking.com or Airbnb has its advantages: they bring your property to a large audience, they handle payments, and they provide a framework for reviews. But those services come at a price that is deducted per booking.

Direct bookings through your own website or through your own calendar cost you no commission. A guest who books through your website or contacts you directly pays you the full amount. You decide the price, the payment method and the communication.

The practical stumbling block with direct bookings is that guests want to see when the property is free, without having to email or call you. An availability calendar on your own website solves that. Guests see straight away which periods are free and can contact you with a specific request.

The balance: platforms and direct channels

Working completely without Booking.com is not realistic for most hosts, certainly not when you are just starting out. Platforms give you visibility that is hard to reach with your own website without a targeted marketing budget.

The strategy many hosts choose: use Booking.com and Airbnb to reach new guests, but encourage returning guests to book directly next time. A discount of five percent for a direct booking is still more advantageous for you than the full commission to a platform, and for the guest too. Both parties win.

For the Belgian market, the trade association Horeca Vlaanderen also gives hosts advice on platform strategy and direct rental.

What that means for your planning

If you know how much you spend on commission per year, you can also work out what it is worth to bring in part of those bookings through direct channels. Even if five or ten percent of your bookings come in through your own website, you notice it in your annual result.

Your own availability calendar is the first step. Rentiplanner is free for one property and synchronises automatically with Booking.com and Airbnb through iCal, so that your availability is correct everywhere while you can also handle direct bookings without double entry.