How do booking channel commissions work?

Short term rental booking channels (Airbnb, Booking, VRBO) charge commission on each reservation. These commissions cover the costs to operate the channel, deliver customer service to guests and hosts, and in some cases cover credit card processing.

Airbnb

Most hosts pay a service fee of 3%, but Airbnb Plus hosts, and hosts who use Super Strict cancellation policies may pay more. Airbnb covers the cost of credit card processing. Airbnb does not charge HST on these commissions.

Booking.com

Booking.com charges 15% of gross revenue for all reservations. They do not cover the cost of credit card processing. Booking.com does not charge HST on their commissions.

VRBO

As a professional host, the fee for VRBO is 5% of gross revenue for all reservations. They do not cover the cost of credit card processing. VRBO does not charge HST on their commissions.

So, how does credit card processing work?

On channels such as Booking.com, VRBO, and direct bookings, the host is the merchant of record. Therefore, they are responsible to accept credit card payments. At Over Sea, we use Stripe to automatically process guest payments through our property management software. See Stripe’s current fee schedule here.

Notes for Over Sea clients

• We do not charge our management fee on commission amounts collected.

• Airbnb income is received with their commissions already subtracted.

• Revenue from all other channels is received net of credit card processing fees, however, commission is invoiced monthly for reservations in the previous calendar month. We subtract these invoices before calculating our management fee.

• We do not display commissions or credit card fees on your statement as they are not subject to HST. They can be easily calculated upon request.