Host base service fee and Split service fee

[Alexander185]

I am in the process of getting all rental channels I use for my STR business to channel manager(CM) b/c I want instant booking on all channels and have to come up with a sure way to avoid double bookings and insane airbnb, Vrbo host fees if I have to cancel b/c of double booking. Anyway, when switching Airbnb to CM they switched me from split base service fee model to host base service fee model. So when Airbnb switched me from the split base fee model (14.2% guest fee + 3% host fee = 17.2%) to their "new and improved, better for host and guest as they claim" Host Base Fee model—a flat 15% charged to the host—it seemed like an improvement.

But after crunching the numbers, I discovered it’s anything but. 

Here’s the truth: While 15% sounds better than 17.2%, Airbnb’s Host Base Fee isn’t as simple as it looks. They calculate their 15% fee on everything—including any extra fees I add to cover that host fee. That means I’m stuck paying a fee on top of a fee!

The Reality: I want to keep my payout at $2,100 for a 2-night stay (including the cleaning fee), no matter the platform I use. But here’s what happens when I compare Airbnb’s Host Base Fee model to the old split base fee model:

Example Breakdown:

* Target payout: $2,100

* To maintain that payout under the Host Base Fee model (15%), I need to charge my guest 17.92% more, meaning the guest pays 18.5% more than they would under the split fee model.

* Split Base Fee Model (17.2%): The guest pays less overall, and I get the full $2,100 payout without hidden extra costs.

Breakdown: Airbnb’s 15% fee is applied not just to the booking total, but also to any fees I add—like a management fee or an increased nightly rate to offset the higher host fee. This significantly drives up the guest’s total cost.

Example Guest Costs:

* Host Base Fee Model: Guest pays $2,842.19

* Split Base Fee Model: Guest pays $2,398.20

* That’s a $442.99 difference purely from Airbnb’s fee structure!

The Real Question: Do hosts simply pass this extra expense on to guests (and risk losing to competitors still on the split base fee model), or do we eat the cost ourselves, or split the difference —paying even more to Airbnb just for the privilege of using their platform?

Either way, it’s a lose-lose for hosts and/or guests. Airbnb’s Host Base Fee might look like it’s better for everyone, but in reality, it’s just another way for them to pad their own bottom line—leaving both hosts and guests paying more.

[Mike-And-Jane0]

@Alexander185 Your maths is wrong I am afraid. Also you need to account for tax on the Airbnb fees. 
With no VAT (typical Europe tax) if you do the sums properly the amount paid by the guest and received by the host is pretty much identical. With a 20% tax applied to the Airbnb fees then the simplified pricing is about 0.5% more expensive so not a big deal.

[Alexander185]

After TAX the total amount that being overpaid is only higher.

Happy to be proven wrong. Please show me. 

[Alexander185]

@Mike-And-Jane0  Here is a real reservation and all the numbers are matching what Airbnb have calculated for that reservation. In the last column I tried to understand/show your comment about 0.5% difference (which I would NOT call negligible) and I think I came very close to what you are talking about. Now, please check out how much the Host is loosing ($264) in your example. 

[Erin8255]

@Alexander185 I spent a good amount of time digging into single fee vs split fee as well and thought I'd share. It may already be clear from the other responses, but I still needed to play around with it to fully understand. Maybe there was a simpler way to get to these numbers, but it wasn't immediately clear to me. 

Ok given the two scenarios: Single fee (15% from host payout, 0% for guests); and Split fee (3% from host payout, 14-16.5% for guests)

Here are the questions I was exploring and what I learned. In this scenario, we want guests to pay a nightly rate of $285 + tax regardless of whether there are fees included in that $285.

1) With the split fee scenario, is that fee baked into the nightly price guests see when searching for a place to rent? Answer: Yes. During a search the nightly rate guests see will be the price you set in your calendar on the backend + any fees. Taxes are not included until the checkout page. 

2) If I want guests to always see $285, is there a difference in my net revenue after fees between the two models? Answer: My net take home would be the same. This needs a little explanation. On the calendar view, for the single fee model I had $285 a night entered in and guests see $285 a night when searching (before tax). For the split fee model, I had to adjust it to $250 a night so that guests would see $285 ($250+14% fee) - I had to do a little math to figure that out: $285 = x + x * 0.14 and solve for x which works out to be $250. For single fee model, my take home is $285 - 285*0.15 = $242; For the split fee model, my take home would be $250-$250*0.03 = $242. So they are the same amount.

The important difference is, for the split fee scenario above, I'm assuming an AirBnB fee of 14% to the guest, but sometimes they will be charged 16.5% and that means they would see a rate of more than $285/night. I don't like that. Also, while guests see the same $285 during a search, when they get to the checkout page and go to price breakdown with the split fee model, the will see our nightly rate listed as $250 and then the added AirBnB fee. I could go both ways on whether that is a pro or a con. One way, is that it looks better that we are charging less per night (compared to $285 in the single fee model). However many people get annoyed with AirBnB fees. Their annoyance isn't projected on us, but it feels a little nicer to not have that there. 

So I think it's a matter of personal preference and what you care about. I personally don't like that AirBnB might charge 16.5% and that would show up in the nightly rate when they are doing a search and would be extra money the guest is paying to AirBnB. So my vote is the single fee for that reason. Just make sure if you are switching from split to single that you boost your rate listed in the calendar so that you get your same take home.