Booking fees (service, payment and guest)

[Brian452]

Hi,

I list on various platforms but most bookings are Airbnb. I recently took two bookings on these other sites which forced me to get a better understanding of various fees on other platforms.

1. My first payment received from www.plumguide.com following guest visit. My problem with this payment was that the booking confirmation showed service fees of £33.48 but payment received was £139.50 less than expected. It was only after I emailed to query that I was informed this was a "one off host onboarding fee". I obviously missed that in the small print. Additional issue I have with this site is that they insist on nameing your listing (Mines is "Fire and Water" apparently because I am on the Loch shore and I have a log burner :-)). They would not change to actual name if house.

2. New booking received through VRBO. Their fee structure includes
a) Payment processing fee of 3% + vat on host fee (£18.36 on £510)
b) Base commision fee of 5% + vat on host fee (£30.60 on £510)
c) Guest service fee of 12.5% + vat on host fee (£76.80 on £510) - I calculated £76.50 so % is aproximate

all of above fees mean that guest booking through VRBO pays ~ £10 less than they would through Airbnb

In the course of checking these figures I also checked exactly what fees are paid through Airbnb. There is no payment processing fee and the host service fee is as expected 3% + vat. The surprise was the Airbnb guest service fee whcih is apparently 14.117% + vat (checked over serveral bookings of different value).

When I initially listed on Airbnb I think there was an option on fee structure but not sure if that is still available and would it be better for me (current annual host fees are approximately £600 + vat)

Has anyone repeated these calcs on these or other booking sites ?

[Emiel1]

@Brian452 

Airbnb offers different fee structures.

They are mentioned here:

https://www.airbnb.com/help/article/1857/what-are-airbnb-service-fees

If both available in your region you can choose one in your account, section Payments, tab "service fees"

On the "split fee" structure there are two percentages: one for short stays (approx. what you already discovered) and a lower one for "long term stays" (28 nights and longer)

On the "host-only fee" structure there is one tarif both for short term and long term stays.

[Brian452]

Hi,

thanks for that.  For some reason I thought there was another fee structure where the host paid a single annual fee regardless of number of bookings (maybe I'm confused with HolidayLettings).

From the info on fees it appears that the Host-only fee is slightly cheaper than host + guest fees (although you would need to increase your daily rates by 14.2%)

Brian

[John2406]

P.S. When we first went with Airbnb, the %percentages charged to Hosts didn't include for VAT, but now they do!

[Elaine701]

We recently changed to the "full commission" plan, whereas, the host is charged 15% instead of 3% from host and 15% from guest. We raised prices to account for that. We did it because it's more consistent with other platforms. It's an accounting thing,  really. And it's tax deductible. 

My first disappointment is that Airbnb doesn't point that out to potential guests with something like "no commission". The price to the guest is the same, but those guests expecting to pay 15% on top aren't informed that they won't have to pay this. 

Ironically, the bookings keep coming in. Maybe we were priced too low to begin with.

The other platforms are happy though. We no longer appear to be less expensive on Airbnb (although we weren't previously, it was just an illusion). 

Except VRBO. There's just too many hidden costs on VRBO to keep VRBO prices equal. I have to charge more on VRBO. Besides, their bookings are pathetic compared to Airbnb. Two per year at best. And their support is nonexistent (compared to Airbnb, where support is very responsive, but extremely risky to use). 

I'm receiving more and more bookings from one boutique platform we're listed with. Good support, responsive, delivers a good quality of guest (no need to vet each one, because they do it for you) .  But they're also not a worldwide multi-billion corporation. They still care. 

[Susan990]

Thank you for your reporting and analysis of service fees. What I know is ABB charges the guest what the market will bear in the area.  Yours is 14% while mine is 11.3%. guest charged.  Host is 3% world wide is my understanding which is how and why ABB gets so many people signing up to see if they can make some money in this trade. 

  But the devil is always in the details and the only trouble ABB has are the ones it makes for itself in its administrative and policy fields. Add to that it has gone public which takes its focus away from the original mission to predicting trends to catch and algorithms and A I to develop.  

[Brian452]

Hi, thanks for that.  I don't think much of their AI if smart pricing is anything to judge it by.  I am currently being suggested my price should be approximately £60 per night and yet I am fully booked at £110. 🤣

Brian

[Mike-And-Jane0]

@Brian452 It is not clear if the price suggestions are the same as the prices Airbnb's 'Smart Pricing' would put on the listing. We use smart pricing on our two smaller apartments due to laziness BUT we set the min price to what we are happy to get each night. As a result smart pricing is only an upside for us.

[John2406]

Hi @Susan990 and @Elaine701 , and thanks for some interesting little snippets of information.

In the past I have advertised on other OTA. websites, but do have to admit that irrespective of their high percentage additions to what Guests are asked to pay, Airbnb certainly would appear to be the best OTA for being able to direct lots of bookings our way. Indeed, over the years we have gradually been dropping the other Companies, and concentrating on Airbnb.

Now, being a person who never believes in having all of the eggs in one basket, I do feel at times that I may well have created a rod for my own back!

However, having just read the poor number of bookings generated by other OTA's, I do wonder for how much longer these other Companies will be in the marketplace.

Personally I don't think that algorithms, AI, the prediction of trends, or the like are making much of a difference during this pandemic, whilst the quality of a place, what it is able to offer/provide by way of comfort, facilities, little extras, location, etc, hold far more sway in what Guests' really want (or desire) to have during their vacations.

When the world is in a flux, and no-one knows what the future holds, the amount of percentage added to the cost of being able to stay somewhere/anywhere, somehow seems to pale into insignificance at such times.

The latter however should never lead to overcharges by anyone, whether by  Airbnb or Hosts, for when things do ease/get better, there will be many losers if the former are still overcharging!

[Elaine701]

Other platforms will survive, as long as they continue to capture some part of the market share. I'd love to see others become more successful, because honestly, I'm really not all that comfortable being dependent on Airbnb.

Overall, Airbnb is a somewhat a risky platform for hosts, despite delivering more bookings than anyone else. More bookings also delivers a higher number of "undesirable" bookings, so you additionally have the burden of guest vetting, which is often tricky, and something newbies tend to fail at. Airbnb always favours the guest in any dispute,  so it's always best to keep Airbnb out of it. If you don't know that yet, you will. 

Having said that, we've never received a "great" guest on VRBO (but many on Airbnb). The mere handful of VRBO bookings we've had so far have been somewhat "less than desirable", one of which was "highly undesirable". And equally as on Airbnb, little you can do about it. 

It's just not a business that favours hosts. You have to watch your back. Cherish the good guests, and do everything to avoid the bad ones. And forget about support from the booking platform. It can be more trouble than it's worth. Nature of the beast. 

[Pav289]

I have not done exact %calculations but you can check how much a guest gets charged by just not logging on and doing a search for your accommodation. Do not put any dates in until you select your own accommodation to check availability. You will see a nightly charge quoted above the calendar. Now put in a check in date and a check out date - just a couple of nights makes calculations easier. You will see the nightly charge suddenly goes UP (it did in my case). Then look at the bottom line charge given to the customer. In my case Airbnb added on a 16% service charge that goes into their pocket. I don't add on any extra charges for cleaning etc as I believe it misleads the customer.  You can see the same information if you look at your reservations and click on details. I just did that and noticed they are deducting VAT from my payout. I have been paying NZ tax on the small income I make.

 I am currently in discussion with them as they are suggesting they will withhold USA Tax if I don't provide a lot of personal information over the internet that I do not want held on their computers. I feel like they are bullying me at the moment and it is making me ill. My accountant is suggesting I use a NZ based company instead but unfortunately that is not an option. 

[John2406]

@Elaine701  and @Pav289 , I can see how you both might wish/hope that things might be different with Airbnb, and that mostly because of your experiences with them, either because of CS or because of the % they add onto Hosts' prices, and I can sympathise with you both, as well as with anyone else feeling the same way, although I must say that I've a). not had problems with CS, whilst I would b). far rather Airbnb only deducted 3% from my payout, than my dealing with some OTA's who do increase our prices to sell to their customers, BUT then deduct at least 20% [+20%VAT] "commission" from my payout!

As to Customer Service, as I say, I've not had any major problem with them, but then I usually give them all the facts and let them know what I would like to do - all of which I will only do online, and never by speaking to anyone (indeed, I always ask for replies to be in writing, as I have a concentration problem, and within 5 minutes or less of speaking to someone about an important matter, I'll have forgotten at least 99% of what was said!)

Yes, CS do appear at times to only be acting on behalf of the Guest (or on behalf of their employer), and I do t have a problem with that other than that there is always two sides to any story, so whilst a Guest might have got CS on board with their side of the story, it is up to us as Hosts, where we know that the story has been misrepresented to CS, to ensure that the latter hear (read) the story from our perspective, after all, CS can only make decisions when they have the full facts.

Having been in other businesses before becoming an Airbnb Host, I can assure you that Airbnb's CS is not that different from any other Customer Service Department, except, perhaps, that with the latter, there's not the same continuity of staff, but at least they do let one know when they're going off shift, and when they'll be returning, and that others will be able to act on one's behalf in the meantime.

The Covid-19 pandemic last year, with all the problems that came with it for Guests, for Airbnb and for ourselves, also brought contact between Hosts and CS very much to the fore, and I'm more than certain caused a lot more  frustration for some hosts when dealing with CS.

I took the line right from the off that the pandemic was nothing whatsoever to do with Guests, Hosts, or Airbnb, and so I always worked with CS, rather than the opposite, all if which meant that I received good attention, and I have continued to work with CS to resolve problems as and when they occur.

Hope some of the above might be of some help, but wishing you all the best

[Elaine701]

@John2406 

Having been in other businesses before becoming an Airbnb Host, I can assure you that Airbnb's CS is not that different from any other Customer Service Department, except, perhaps, that with the latter, there's not the same continuity of staff, but at least they do let one know when they're going off shift, and when they'll be returning, and that others will be able to act on one's behalf in the meantime.

Yes, well, I find that Airbnb support is quite different from the rest. 

First, you always get a response from Airbnb. It always starts out with telling you how great you are. Other platforms will often simply ignore you. 

Next, the fact that Airbnb CS reps often have little knowledge of Airbnb policy or procedure, deliver damaging misguidance and/or take inexplicably damaging decisions based on that misinformation is one other characteristic that distinguishes Airbnb from the rest. 

Oh, and in case you hadn't sussed it yet, the "I'll be away for a few days" is a tactic used by the outsourced support center to pass you on to another equally uninformed, misinformed CS rep. Virtually all of them use precisely the same phrasing in most of their responses, whether it's disarming you by gushing about how great you are, or getting you off their back by claiming to be "off for a few days".

Think about it. These "reps" are employed by a call center, not Airbnb. They only know what it says on the sheet. They're people sitting on a computer somewhere, who are reading from a cheat sheet, just taking cases one after another. If THIS --> say/do THAT. 

In that respect, yes, similar to any other. But what differentiates Airbnb is that their ability to cause unnecessary, substantial damage from systematic incompetence.

Add in that they'll almost always favour guests in any decision making process run by low level outsourced call center workers, and that makes Airbnb a riskier platform for hosts. Hosts would be well advised to avoid Airbnb CS whenever possible.