Nightly price is the one number a host changes every week, and the only one that pulls both ways at once. Put it up and every booked night pays more. Put it up too far and fewer nights book at all. The house below shows where that trade stops paying.
What does Airbnb take out of the nightly price?
The price a guest sees is not what reaches your account. Airbnb’s help center says its service fees are a percentage of the nightly price and any fees charged by the host, and that most hosts on its single fee pay 15.5%, taken out of the payout. The cleaning fee you charge sits inside that base, so raising it does not slip past the fee.
Three more costs move with the price rather than sitting still:
- A co-host, if someone else answers messages and handles check-ins. This example pays one 20% of bookings.
- Maintenance and big repairs, set here as 5% of revenue each.
- Cleaning and supplies, which move with stays rather than with the price. This example budgets $300 and $150 a month.
The mortgage, the property tax and the insurance do not care what you charge. That split is the whole reason a break-even price exists: a fixed pile of bills has to be covered by a number of nights at a price.
What price covers the costs on this house?
This is a $350,000 house bought with 20% down on a 30-year loan at 7%, plus 3% closing costs and $25,000 of furniture, so $105,500 of cash goes in before the first guest. Property tax is $4,200 a year and insurance for paying guests is $2,400. Utilities run $350 a month. At $375 a night with 65% of nights booked, about 237 nights a year, the month looks like this.
| Amount | |
|---|---|
| Booking income | $7,414 |
| Airbnb’s fee (15.5%) | −$1,149 |
| Co-host (20%) | −$1,483 |
| Cleaning | −$300 |
| Supplies | −$150 |
| Utilities | −$350 |
| Maintenance and big repairs (10%) | −$741 |
| Property tax and insurance | −$550 |
| Mortgage | −$1,863 |
| Cash flow each month | +$828 |
These are example figures, not a forecast for any market.
That $828 a month is 9.4% on the $105,500 of cash. For what counts as a decent result once you have a number, see what a good return on an Airbnb looks like.
What is the break-even nightly price?
Every booking rate has its own floor. Hold the house above the figures below and it pays its own bills. Fall under them and you are topping it up out of your own pocket each month.
| Nights a year | Break-even price | |
|---|---|---|
| 50% booked | 183 | $388 |
| 55% booked | 201 | $352 |
| 60% booked | 219 | $323 |
| 65% booked | 237 | $298 |
| 70% booked | 256 | $277 |
| 75% booked | 274 | $258 |
The floor drops fast at first and then flattens. Going from 50% booked to 60% takes $65 off the price the house can survive on. Going from 65% to 75% takes only $40 more off. So the first nights you fill are worth far more than the last ones, which is the opposite of how most hosts talk about occupancy.
How many more nights does a cheaper price have to fill?
A price cut is often sold as a way to fill the calendar. On this house it has to fill a lot of it. Each row below is priced differently and booked 65% of the year, beside the booking rate that price would need to match the $828 a month that $375 earns.
| Cash flow at 65% | Booking rate to match $375 | Nights | |
|---|---|---|---|
| $300 a night | +$20 | 81% | 297 |
| $330 a night | +$343 | 74% | 270 |
| $375 a night | +$828 | 65% | 237 |
| $420 a night | +$1,313 | 58% | 212 |
| $450 a night | +$1,636 | 54% | 198 |
Drop from $375 to $330, a 12% cut, and you need 33 more booked nights a year to stand still. Drop to $300 and you need 60 more, which is 81% of the calendar. Very few listings hold 81% across a winter. Going the other way, $420 a night only needs 212 nights, but you have to be the listing people pick at that price.
This is also why the two numbers have to be set together rather than one at a time. Pricing for the occupancy you wish you had is how a listing ends up booked solid and still short at the end of the month. To solve the same house for occupancy instead of price, see the booking rate an Airbnb needs to break even.
Where should a starting price come from?
Start from what comparable listings near the address actually booked at across a full year, not from their asking prices. Asking prices include every night nobody took.
Airbnb will also set the price for you. Its Smart Pricing article says the tool uses hundreds of factors about your listing and your area to adjust your nightly price, and that you set a minimum and a maximum and can change your price any time. Two details matter when you turn it on. Discounts can take the guest’s price below your minimum, and Airbnb says your pricing changes will not affect pending or confirmed reservations, so a change today only reaches nights nobody has booked yet.
Set the minimum at or above the break-even price for the booking rate you can defend in a bad year. On this house that is $352 if you only trust 55%, not $298. A tool that is free to price below your floor will fill the calendar and still leave you short, because it is solving for bookings and you are solving for what is left at the end of the month. The maximum matters less, and setting it too low is a quiet way to give away the weeks when demand is high.
What to do next
Put your own house in the short-term rental calculator, set the nightly rate and occupancy to what you believe, then push the rate down until the monthly cash flow reaches zero. That figure is your floor, and it is the number to compare against before you accept any price a tool suggests. If you have not built the expense side yet, how to analyze an Airbnb walks through every line, and the full list of host fees covers what comes out of a booking.