Simplifying service fees

[Villaeora0]

Is nobody going to comment on the elephant in the room . Pushing service fees all onto the host will be a disaster for the Airbnb booking channel . 

[Amy2584]

I manage around 30 properties under this structure, and not one of my hosts has had an issue with the change. Neither do I.

For the past seven months, guests have largely been seeing the total price rather than focusing on a breakdown of who pays what anyway. And ultimately, without guests booking our properties, we wouldn’t have this first-world problem of debating who pays the fee in the first place.

I also have a number of properties listed across other platforms and have been tracking the fees closely for the past few months, across both split-fee and single-fee structures. From what I’m seeing, Airbnb still comes in lower than platforms like Booking.com in many cases.

Then there’s the insurance and protection element attached to each stay. If we’re asking who should technically carry the platform fee, I actually think it makes sense that the owner does. It is their asset being booked, their income being generated, and their property receiving the benefit of the platform’s protections.

And that brings me full circle.

We can debate whether the fee sits with the guest or the host, whether it’s visible or absorbed into the nightly rate, but ultimately it is a cost of acquiring a booking.

No platform. No guest.
No guest. No booking.
No booking. No revenue.
No revenue. No fee.

For me, I’d rather focus on pricing the property correctly to account for the cost of doing business than get too caught up in which side of the transaction the fee appears on.

[Shelley159]

Hi @Villaeora0 

@Amy2584 has phrased it very well.

If you look around the Community Center, it's not an elephant at all - the majority of posts are about this.

The important point is that it's a change in fee structure structure, not an overall higher percentage.

[Jon47]

Absolutely! a 500% increase in commissions we'll pay, under the guise of Airbnb advertising 'no booking fees" I imagine for bookers. What a crock. They need to address our very real concerns upfront with a letter, especially to Super Hosts. The booker will end up paying more anyway if we do as suggested by Airbnb and raise our prices to "protect our payout". Their math doesnt math. 

[Elaine701]

@Jon47 

Well, your best option is to move to another platform. 

But I'd recommend not closing your airbnb listing quite yet because what you learn from other platforms will surprise you.

Good luck with that.

[Shelley159]

@Jon47 can you illustrate with an example how you calculate the increase in service fees?

The most common omission seems to be when the 14.1% to 16% portion of the service fee that the guest used to pay, is left out of the comparison.

An increase from 3% to 15.5% is about 417% - is that what you mean by 500%? If so, you're only taking the smallest (host) portion of the split fee into account. You need to compare 15.5% to 3% plus 14.1% to 16% on the guest's side.

[Jon47]

Here's an example.....let's say my property price per night is set at $100 per night. I currently am charged 3%, so my payout is $97 per night, plus any cleaning fees etc I charge. The guest is paying approximately 14% in fees, so they are being charged approximately $114 plus taxes if applicable, pet fees, cleaning fees etc. All itemized before checkout...the guest sees what service fees are applicable at checkout and makes the decision to book with all the info displayed before accepting. 

With the new plan the host pays all the commission. I rounded up to 500% as 15.5 is roughly 5 times as high as 3, so yes, 417% is more accurate. By raising my price to protect my payout, although the guest now doesn't see a service fee, they see a higher price, and Airbnb may market the new fee structure as "no booking fees", which is misleading , because to get the same payout, we as hosts will need to raise the price to compensate for the increased commission. The guest may be paying the same, but it may appear to many booker, especially repeat bookers for our properties, that the price simply has gone up , and that the host is being greedy. They may be overall the same price for the booking, but its not really transparent . The service fees are a good value, with AirCover, marketing , ease of collection of fees and taxes etc, but AirCover is not just for hosts...it's for guests as well. Hosts should not have to bear the entire costs of using Airbnb. 

[Elaine701]

@Jon47 

Apparently, guest service fees in your jurisdiction are 14%. The price that the guest sees and pays includes that (plus VAT). 

That 14% plus the 3% host service fee is 17% +VAT.

That is now being eliminated from your price and replaced with a flat 15.5% service fee +VAT.

That's not an increase, if anything, it's a slight decrease. 

If you price it properly, the guest should see little, if any difference, and you should receive about the same payout. 

Also, so far, not a peep from Airbnb claiming "no commission". I don't think that would fly anyway. 

But ... Aircover isn't what it claims to be, and should be disregarded as fluff. I have legitimate insurance. I would never attempt an Aircover claim.

In any case, aside from a few tax greedy jurisdictions, nobody's paying more or taking more. It's just simplifying the structure and making it more consistent with how the entire industry operates. And other platforms charge even more commission, using the very same model. But don't take my word for it, see for yourself. Sign up with the others. You'll be surprised. 

Still, if this is the most troubling aspect of hosting for you, then I'm extremely jealous. I can only wish I had it so easy. 

Anyway, good luck and happy hosting!

[Shelley159]

Hi @Jon47

The full price (including service fees) displayed to guests in searches. Service fees were not added on afterwards, so the total price looks the same.

But you're right that under the split fee,  guests could click through and note the line item with the guest portion (14.1% to 16%)  of the service fee. That will no longer be there, as you've said.