Guest Fee waived but HOSTS now automatically charged 15% commission by Airbnb

[Melanie818]

Email received from Airbnb September 2nd 2020

Starting 11/1/2020, we’ll be switching your listings to simplified pricing—a new service fee structure that gives you more control of your final price.

What’s changing Today, there are 2 service fee structures: split-fee pricing with the service fee shared between hosts and guests, and simplified pricing with the entire service fee covered by the host.

After 11/1/2020, split-fee pricing will no longer be available.

That means a 15% service fee will be deducted from your payouts, and no fee will be charged to your guests—what you set is what guests will pay. Why we’re making this change We introduced simplified pricing last year, and hosts who tried it out and priced competitively across websites got an average of 17%* more bookings. We heard that removing the guest fee made it easier for hosts to price competitively, and we saw that guests preferred to book places that didn’t have a guest fee.

This is especially important for your listings, since guests usually don’t pay fees on other booking platforms in your region. What will happen next?

This change will happen automatically on 11/01/2020 and will be applied to any bookings that you get after that date.

We’ll send you a reminder 7 days before this change, along with a guide to walk you through changes you may want to make to your prices. Here’s a summary of what will change:

• Your service fee settings will automatically change on 11/1/2020 for all your listings
• We’ll deduct a flat 15% host service fee from each payout and won’t charge a guest service fee
• This won’t affect any existing bookings you have and will only apply to any bookings you get after 11/1/2020
• Using Airbnb after 11/01/2020 means that you’ve accepted this new service fee structure

[Ute42]

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@Robin4 

Thanks for replying, but I didn't read it. I'm occupied with a more urgent issue right now:

"Puddles in Seattle"

[Debra300]

Put down that glass of wine, @Ute42! 😁

[Ute42]

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@Robin4  

Sorry that I didn't read Your post yesterday, as I said I was occupied with something else. Also I got pretty drunk later.

But I did read Your post now. Thank's for rerolling the 2018 Australian payout crisis.

You said You never had a payout problem. That's fine, but that doesn't mean You may have a problem in the future. And thousands of hosts are having payoutproblems every day. Don't You read this on this forum? Robin, You are just trying to make airbnb look better than they are.

[Sarah977]

@Ute42  I've never had a payout problem either, or a bad guest, or any guest issues I had to contact Airbnb about. But that doesn't mean I'm immune from it, anymore than I'm immune from contracting coronavirus just because I've managed to avoid it so far.

And I'm disgusted with Airbnb every time I read about a host who has thousands of dollars of unreleased payouts owing to them , which Airbnb keeps passing off as a "tech issue" or hosts who get their listings suspended because of Airbnb's knee-jerk reaction to a guest claiming there was something "unsafe" about it, or Airbnb doing nothing when a host calls them to say the guest has snuck in 40 more people and thrown a trash the house party.

Because that could be me the next time.

[Sally221]

I remember that one & it did not reflect well on airbnb - the float on all those delayed payouts must have been a nice bit of extra cash. When a screw up by a company results in a profit for the company, there's little incentive for the company to do better. (from the point of view of their bottom line they did do better & why not try it on again from time to time)

[Sarah977]

@Sally221  And I remember the Aussie hosts saying that Airbnb couldn't even manage the decency to apologize for the major payout issue.

[Anna9170]

@Ute42  I put the price much higher on booking com, because they have extortionate taxes and deductions. And most importantly, it is not clearly written anywhere, I get different amounts every time, but in any case it is 100 euros from the 150 indicated in the booking.

[Ann72]

@Ute42  I have to find other platforms.  I list on VRBO with lower prices than on Airbnb, but I get almost no action from VRBO unless you count scammers and people who whinge about the price.  At the end of every season I raise my Airbnb prices about 5%.  (Hotel prices go up on average roughly 3% a year.)

We've heard this new price structure is coming for several years now - I believe @Susan17 warned us all.  I wonder though how Airbnb will handle the occupancy tax that allows them to jack up their service fees with this tricky double-dipping calculation:

They calculate the 9% occupancy tax on nights+cleaning+service fee. 

But the 13% service fee in the example - $402 - is calculated on nights+cleaning+occupancy tax.  It would only be $370 if calculated solely on nights+cleaning.

And if the service fee was $370, the occupancy tax in the example above would be $289.

I find this truly despicable.  And it's less onerous on me than it is on the guests.

How will they scratch out those extra dollars if they separate service fee from nights+cleaning+occupancy tax?

[Helen868]

May I ask what the others platform you are listing?

[Jeff89]

@Robin4

@Katie

Hi Rob,

Yes, this is another way that AirBnB camouflage the benefit to themselves to the detriment of hosts.  The current host service fee of 3% (plus VAT) without "Simplified Pricing" is based on  pre guest fee subtotal.  I suspect AirBnB's marketing material that states up to 17% more bookings were achieved in some market testing could be due to lower total prices - nothing to do with guest fee being disclosed separately. 

AirBnB's 15% commission via "Simplified Pricing" is based on a higher room rate rate - assuming most hosts will increase their rate by some amount.  That higher base gives AirBnB a higher base upon which to charge their combined guest fee and host fee earning them higher fees. 

Furthermore, long term guests who would normally pay roughly 10% guest booking fee will effectively be paying more for accommodation (which will go to Airbnb - not the host - as AirBnB are still scheduled to grab 15% for the standard host fee for moderate or lower booking condition or 17% fee if the booking condition is strict.  

Some weeks ago, we received an email from our channel manager stating AirBnB were discontinuing a certain integration method, effectively forcing hosts to utilise the fully integrated channel manager API connection type which has its own limitations.  I suspect this was a precursor to forcing “Simplified” pricing for hosts that use a channel manager.

The only thing that is simplified in this new model is that AirBnB can more easily estimate their forward income as its either 15% or 17% on a higher base rate and it simply increases their income.

The additional host fee percentage for strict booking condition clearly shows that AirBnB force hosts to align with their hosting policy ideals which also includes hiding charges from guests.  Hosts do not gain or even break even with this new pricing structure.   Hosts will likely also get lower page rankings apart from absorbing higher hosting costs.  We have seen previous iterations of AirBnB's hard-handedness when instant booking was introduced years ago and strict booking policy was relaxed and is not considered strict when compared to strict hotel or airline bookings. 

Despite pretending they listen, the decision making style at AirBnB hasn't changed over the years.   If only top management realise their marketing style (glossy with poor quality veneer) has forced many hosts to multi-channel on platforms that are much more understanding of hosts’ requirements or host their listings on their own web sites.

[Fred13]

I have liked 'Option #1' best all along: charge me a mere 3% to bring the customers and take care of payment, and in exchange, I will..

1. Run the customers I even get through my own website through Airbnb

2. You will never hear from me and I can't think of a reason to hear from you. 

A match made in heaven. 

[Emiel1]

In the "normal" fee system there is a difference in Guest Service Fee for "long term stay" (approx 11%) and "short term stay" (approx 15,5 %). So on the "host only fee" system  this difference is not possible anymore ! i also wondered about VAT. The fees are subject to VAT and if Airbnb is charging them themself, they are in control about the VAT  But if they simply deduct 15 % from the Host payout, then what about VAT rules ? .

Best regards,

Emiel

[Debra300]

It is common on other platforms, such as Booking and Expedia, to charge the host a 15% commission, and hosts must adjust their rates to account for it.  Most guests are none the wiser that they are paying for the commission, because it's not listed separately.  Airbnb is attempting to change to this model so the rates on their platform are the same and competitive with rates for the same listing on other platforms.  

The difference is that these platforms allow the hosts to collect the payment directly, including a security deposit.  Also, they offer cancellation policies that have free cancellations that end as far out as 30 days before arrival.  If the guest cancels within the free cancellation period, they are refunded all of their money, and the host doesn't have to pay any commission.  These are very important points, because Airbnb made no mention if refunds will be handled differently than they are presently where the service isn't refunded after the free cancellation period has ended or if the guest has already received 3 service fee refunds.  If the refund policy doesn't change, Airbnb is just increasing its service fee take at the hosts expense, because they are not going to give the host the 3% that was previously collected at payout.

[Anna9170]

@Debra300  Perhaps the situation in different countries is different, our booking com takes not 15%, but at least 30%. 😒

[Debra300]

@Anna9170,

Yes, it's very probable that the commission fees are based upon the location of the listing.  Every platform has its pitfalls.  In my experience, 15% commission is the base amount charged by Booking and Expedia.  The fee increases if you allow them to process the payment.  For example, I paid Expedia 15% when I collected the payment, and paid my credit card processor between 3-4.5% to take the payment.  When I let Expedia collect the payment (Booking doesn't offer the service in St. Lucia), I paid them 20%, and still pay a 3% credit card processing fee to get my payout, because they issued electronic virtual cards.  However, I still received the guest's credit information for the security deposit and incidental costs.  This is very important, because I am able to enforce my cancellation policy and house rules,  and Expedia has never over-ridden my cancellation policy without my permission.

My primary problem with Airbnb trying to be more like other platforms (guest anonymity prior to booking: no real identity verification is done, allowing unverified guests to make reservations, not requiring that each guest be listed in the reservation, etc.) is that unlike them, Airbnb still wants to control the entire financial process and be the arbiter of all financial matters.  So, they want hosts to accept the risk of hosting total strangers, and deprives us of the ability to personally remedy situations in which the guest has breached the TOS, cancellation policy, or house rules.