How to charge for holiday rentals
Now you’ve set up your holiday rental and set your financial targets, it’s time to decide how you’re going to charge your guests – but you might encounter some fees along the way. Here are our tips.
What will work best?
Organising your short-let income
There are multiple ways you can get paid for having your guests stay in your holiday rental. If your rental is on sites like Airbnb and Booking.com, then you’ll find that the money has been taken from there, minus a few fees. If you use a property management company like us, the process will work slightly differently. So, let’s explore your options and leave it to you to decide which one will make sense for your business.
Getting paid when using an agency like us
If, like many property owners, you’ve decided to partner with an agency like us, which manages your property, guest communications, maintenance, and so much more, then it’s important to know that we’ll also handle the financial side of the business.
When we say that, we don’t mean submitting your tax return and acting like accountants, but rather, as we manage the bookings, we’ll take payments for the bookings, deduct the expenses and commission and pay you the profit. HelloGuest takes a 12% commission.
Typically, when you work with some of the larger agencies, you might find that it takes longer to receive your payment; for example, if a guest books today for a booking later down the line, you might not receive your money until the guest checks in.
However, smaller, independent agencies like ourselves will be more reasonable and pass on your money faster. Our clients will be able to see all bookings, reports and financials in our property management software app, so they can keep track of their income.
Going it alone - recuperating your costs
Going it alone means you’ll, of course, save on agency fees. Agencies like us work on a commission structure, where we take 12%, meaning we only earn when you do—but we understand if you want to keep more of the pie, especially if you’re confident you can handle the comms, marketing and SEO, turnover, and admin.
Without an agency to collect your money, you’ll have to decide how to collect your payments. Here’s an overview of each way and what to expect and look out for:
In any typical business, taking cash payments is one of the simplest options. However, in the holiday rental industry, it’s a payment method that tends to have the most issues.
- You might have agreed the price in advance, but when they arrive they might not pay, or find reason not to pay offering you no protection.
- If they have a problem with your property, where it’s not what they’ve expected, they might still stay but refuse to pay the agreed price because of certain faults.
- As cash is disappearing from society, guests might arrive with no money at all, saying they’ve forgotten, or thought there would be facilities to withdraw. Then, if they can withdraw, there might be some issue with their card.
- Remember some guests will be international too and might not have the right currently.
- In the long-run, accepting cash and cheques might make your life harder – online money transfers are the safest and most used.
With online shopping be an everyday activity, it’s the norm for guests to pay for their holiday online – and might even be surprised if you don’t accept card payments.
Taking card payments is quick, easy, convenient and trackable – plus you won’t have to wait a few days for it to clear into your account.
However, you might have difficulty with major providers like Vida or MasterCard to provide you with the necessary facilities to accept these online payments unless you’re using third-party websites like Airbnb for bookings. There are other companies, who can help set you up with a card machine, but here, you will face charges per transaction.
PayPal is another easy option to help you get paid! And your guests would have heard of them too, making your payment process more trusted. PayPal’s commission rate is a little over 3% with a small transaction fee.
Even if you can avoid agency fees for management, you won’t be so lucky if you accept bookings for your rental on sites like Airbnb and Booking.com, which all have their rates and booking fees.
More holiday rental income information:
Key Takeaways
How to get paid summary
- Pick a payment method that protects you, not just one that’s “easy”: we highlight that cash payments can leave owners exposed (non-payment on arrival, disputes, and zero protection), and suggest modern, trackable methods are safer.
- If you use Airbnb/Booking.com, payments are mostly “handled for you”, but fees reduce what you receive: the guest pays via the platform, and you receive the payout after platform charges are taken.
- If you use HelloGuest, they position it as hands-off finance admin: they take booking payments, deduct expenses and their 12% commission, and pay you the remaining profit (they clarify this isn’t tax-accounting support).
- Cash flow timing matters: HelloGuest contrasts larger agencies (which may pay owners only at guest check-in) with its claim of faster pass-through and visibility into bookings and financials via its property management app.
- Going solo means building payment processing fees into your pricing. We note that guests expect card payments. Setting up card processing can incur transaction fees, and PayPal is positioned as familiar/trusted but comes with a percentage fee and per-transaction costs.
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