Understanding Booking Fees Setup in Property Management: Lessons from a Year of Property Management

Since I started using Hostaway as my property management tool for short-term rentals last year, I’ve learned a lot—especially during those first three months. Believe it or not, I was calling my property management software-Hostaway representatives almost weekly to resolve issues and better understand the platform.

Thankfully, Hostaway’s support team is both professional and efficient. Their front-line representatives often provided immediate solutions, and if they couldn’t, they would seamlessly connect me with the technical team for further assistance. This level of support was invaluable as I navigated setting up my properties.

The Discovery of Booking Fees

One of the surprising challenges I encountered was receiving invoices from VRBO and Booking.com for the previous month’s bookings. At first, I was confused: Why was I responsible for these fees? Shouldn’t the guest be paying them?

After consulting with Hostaway support, I realized that managing booking fees is part of the trade-off when using a property management platform. While these systems streamline processes and improve communication, they come with certain disadvantages—one of which is handling booking fees for some platforms.

Comparing Platforms: Airbnb vs. Others

Not all platforms handle fees the same way:

• Airbnb: This platform makes things simple. Guests pay a booking fee upfront, while hosts pay a host fee deducted directly from the payout. There’s no need for hosts to manually manage or account for these fees.

• VRBO and Booking.com: These platforms require hosts to manually manage booking fees. Hosts often need to shoulder part of the fee, which adds complexity and financial considerations. Without proper setup, hosts may find themselves paying 100% of these fees, which is far from ideal.

How to Set Up Booking Fees in Hostaway

To effectively manage booking fees, you need to know where and how to configure them on Hostaway:

Step 1: Navigate to Listing Details

Go to Listing Details > Price and Fees to set up a reasonable markup for booking fees. This is where you can add a fee percentage to cover platform costs.

• Trick: Booking.com markup cannot be edited here, but VRBO markup can.

Step 2: Adjust Markup by Channel

Navigate to Channel Manager Settings and select each listing. Here, you’ll find the option to adjust markup by channel.

• VRBO markup can be edited both in the Channel Manager and the Listing Details section.

• Make sure to save your changes after making edits.

Step 3: Verify Changes on Live Listings

After updating the fees, it’s essential to check your live listings on Expedia.com (under the VRBO umbrella) and Booking.com to ensure the rates and fees are correctly reflected.

Why It Matters

Failing to configure booking fees correctly can significantly impact your profits. By setting up markups strategically, you can share the booking fee burden with guests rather than absorbing it entirely.

Final Tip: Ask for Help

If you’re unsure about any part of the setup, don’t hesitate to call Hostaway support. They are highly knowledgeable and can walk you through the process step by step.

Looking Ahead: Taxes

Booking fees are just one piece of the puzzle. Tax setup is another critical topic—similar but with its own nuances. Be sure to check out my other blog dedicated to tax configurations for short-term rentals.

By understanding and managing both booking fees and taxes, you can maximize your revenue and streamline your operations as a short-term rental host.