Accounting for New Airbnb Service Fees in Proformas

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Accounting for New Airbnb Service Fees in Proformas

Erika Albert
Real Estate Broker · Austin, TX · Member since 2022 · 30 posts · 24 votes

Perhaps I am overthinking this, but I'm wondering how to properly account for airbnb's new 15.5% service fee in proformas derived from airdna revenue estimates.  The airdna estimates don't include the service fees, and the estimates are based on 2025 revenue.  Theoretically, the assumption was that hosts would raise rates to cover this fee, not sure how much this is actually happening.  Should the 15.5% fee just be added as an expense line item to create a conservative proforma?  

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Bo SmithPro Member
Hinton, WV · Member since 2026 · 1k+ posts · 373 votes
8mo

You're not overthinking it - this is exactly what's killing STR deals right now. Most hosts are eating 8-10% of that fee because guests are price-sensitive, so I'd model it as a 10% expense hit minimum. The rate increases only work in premium markets where you have pricing power. What occupancy rates are you using in your models - pre or post fee implementation?

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  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    8mo
    Quote from @Erika Albert:

    Perhaps I am overthinking this, but I'm wondering how to properly account for airbnb's new 15.5% service fee in proformas derived from airdna revenue estimates.  The airdna estimates don't include the service fees, and the estimates are based on 2025 revenue.  Theoretically, the assumption was that hosts would raise rates to cover this fee, not sure how much this is actually happening.  Should the 15.5% fee just be added as an expense line item to create a conservative proforma?  

    Doesn't it just lower your Net payout?
    This is what I count from Vrbo and Airbnb.
    Then I keep all my Vrbo and Airbnb tax forms to substantiate this.
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    • Ryan MoyerBusiness Member
      Property Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 993 posts · 1k+ votes
      8mo
      Quote from @John Underwood:
      Quote from @Erika Albert:

      Perhaps I am overthinking this, but I'm wondering how to properly account for airbnb's new 15.5% service fee in proformas derived from airdna revenue estimates.  The airdna estimates don't include the service fees, and the estimates are based on 2025 revenue.  Theoretically, the assumption was that hosts would raise rates to cover this fee, not sure how much this is actually happening.  Should the 15.5% fee just be added as an expense line item to create a conservative proforma?  

      Doesn't it just lower your Net payout?
      This is what I count from Vrbo and Airbnb.
      Then I keep all my Vrbo and Airbnb tax forms to substantiate this.

       He's talking about underwriting. The service fee shift will lead to inflated revenue supported on sites like AirDNA since those did not account for the guest service fee added on top.

      IE on a $1000 booking previously Airbnb would charge the guest $1140 ($1000 + $140 service fee), and AirDNA would report $1000.

      Now the host has to market up the amount to $1150, and then Airbnb's fee is subtracted. So on the same net revenue AirDNA is now reporting $1150 instead of $1000.

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  • Ryan MoyerBusiness Member
    Property Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 993 posts · 1k+ votes
    8mo

    Broadly you understanding it correctly. AirDNA does not capture the guest service fee on top so did not count it as revenue, but when the host is instead baking that into their rates, it shows up in revenue.

    So the same $50k in bookings under the single fee model would previously have been reported as $43k under the split fee model.

    The problem is that the change is not universal. It only affects hosts using PMS systems, which are still a minority of hosts. So if you're underwriting for 2026 you do need to make a change compared to 2025, but probably not the full 15% since many hosts are still on the split fee model. I would maybe knock it down 5-7% as a middle ground.

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  • Bo SmithPro Member
    Hinton, WV · Member since 2026 · 1k+ posts · 373 votes
    8mo

    You're not overthinking it - this is exactly what's killing STR deals right now. Most hosts are eating 8-10% of that fee because guests are price-sensitive, so I'd model it as a 10% expense hit minimum. The rate increases only work in premium markets where you have pricing power. What occupancy rates are you using in your models - pre or post fee implementation?

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    • Erika Albert
      OP
      Real Estate Broker · Austin, TX · Member since 2022 · 30 posts · 24 votes
      8mo
      Quote from @Bo Smith:

      You're not overthinking it - this is exactly what's killing STR deals right now. Most hosts are eating 8-10% of that fee because guests are price-sensitive, so I'd model it as a 10% expense hit minimum. The rate increases only work in premium markets where you have pricing power. What occupancy rates are you using in your models - pre or post fee implementation?


       my model is toggle based either using actual numbers or airdna projections; if it's projections it's predominantly based on revenue rather than ADR X Occupancy Rate, thus the fee deduction should theoretically address the occupancy rate concerns 

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  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
    8mo

    The day the fee change became effective we raised our base rates to compensate.  For about 2 weeks bookings were a little rough, then it evened out as the laggards got in line.

    AirDNA is essentially a trailing 12.  I am not exactly sure when they update their data (i.e. the first of every month?) but yes, the revenue will be inflated and need to be adjusted, but you cannot just discount by 15% now because it has not been a full year yet, so sort of prorate the line item by a percentage that accounts for when it went into effect would be how I do it.

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  • Erika Albert
    OP
    Real Estate Broker · Austin, TX · Member since 2022 · 30 posts · 24 votes
    8mo

    Thank you!  They update their data about 20 days post end of month.  I've been waiting for December numbers to create a comprehensive annual report and they just released those.

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