When a co-host says 15 percent, 15 percent of which number

Question

I mostly read about notes and lending, so this is not my area at all, but a friend asked me to look at a co-hosting proposal for her condo and I got stuck on the first line.

The agreement says the manager receives 15 percent of gross revenue. Her listing shows a $180 nightly rate, a $145 cleaning fee, and then the platform takes its own cut, and there's occupancy tax on top that the platform seems to collect and send somewhere. So on a three night stay there are at least four different numbers I could call gross revenue, and they're not close to each other.

If the cleaning fee counts, the co-host is getting paid a percentage of money that goes straight to the cleaner. If it's the payout after the platform's cut, the co-host earns less than the headline suggests. Nobody defined the term anywhere in the four pages.

What do co-hosting agreements normally use as the base, and what should she be asking the co-host to write down?

jordan_ellis2 · Accepted Answer

The common version is that the fee applies to rental revenue only, meaning nightly rate times nights plus any pet fee or extra guest fee, and the cleaning fee is excluded because it's a pass-through to the cleaner. Occupancy and lodging taxes are always excluded, since that money isn't the owner's to share.

The platform cut is the piece people argue about. Airbnb's host service fee comes off before the payout hits the owner's account, so a fee based on gross booking revenue is slightly bigger than one based on the payout. On your friend's three night stay at $180, gross rent is $540, and 15 percent of that is $81. If the base is the payout after the platform fee, the co-host makes a few dollars less. Small per booking, real over a year.

What she should ask for is one sentence that says exactly what gross revenue means, naming the cleaning fee and the taxes as excluded, and saying whether the calculation happens before or after the platform's fee. Also ask for a monthly statement showing the bookings and the math, because the number has to be checkable. If it isn't defined, it will be defined in whichever direction favors whoever sends the invoice.

dmitri_v6 · Answer

The definition clause matters more than the percentage, and pike named the pieces. I'd add two things to the document.

First, put the payout flow in writing. Does the platform pay the owner directly and the co-host invoices monthly, or does money land with the co-host who then remits? Those are different risk profiles and different bookkeeping, and the second one usually needs a separate provision about how fast the owner gets paid and what account holds the money in between.

Second, ask what happens on cancellations and partial refunds. If a guest cancels inside the penalty window and the owner keeps 50 percent of a booking, does the co-host earn on that retained amount? Plenty of agreements are silent and it turns into an argument the first time it happens.

Tax treatment of cleaning fees and lodging taxes varies by state and sometimes by city, so she should confirm that piece with a CPA rather than the co-host.

When a co-host says 15 percent, 15 percent of which number

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