New host single fee.

[Petrona2]

Hi all, is any host happy with the new single fee. I am struggling to comprehend it. If you set too high high you may not be booked, set too low and loose a big chunk in 15.5 deduction. So I am thinking of going back to split fee. Let me know what your thoughts are.

[Elaine701]

@Petrona2 

I've been on single fee for years and for me, it simplified a number of things. 

It's the same system used by every other platform, so it's easier to keep price consistency among them. It simplifies accounting tasks. And it's actually a slight discount from the 18% previously charged on split fee, so hosts actually profit a few cents more, while keeping the guest price the same.

But I understand that uniquely in the UK, hosts are taxed on the full amount that the guest pays, including the VAT. So UK hosts aren't happy about it. It only raises your tax bill unnecessarily. 

But it would be the same on every other platform, so it appears that for UK hosts, Airbnb just removed one key advantage over other platforms.

Yet other platforms charge even more commission, so I wouldn't expect a mass migration to other platforms by UK hosts. No advantage there. 

I believe Airbnb is phasing out split fee globally, so I doubt you'll be able to go back to it. Or maybe they'll make an exception just for UK hosts?

Good luck 🤞 

[Petrona2]

Hi Elaine i think you are right. I tried to return to split fee but the platform prevent me from doing so.

[Helen471]

@Petrona2   You had until the end of September to change from Split Fee to Single Fee. Even if you had waited to make the change, the system would have automatically changed it to the Single Fee, as that is the new fee structure now. Airbnb gave hosts a few weeks notice to decide on how much they wanted to increase their nightly rate. Most of us do not want to lose money, so the math is simple to increase the rate to an additional 15.5%, which the system will do for you. But you can still set your nightly rate lower.

The only thing you do have to be careful with is if you have any "promotions" set up, as Guests will still be offered any promotions you have set up when you lower your nightly rate.

[Shelley159]

You're in the UK @Petrona2 so you can't go back to a split fee. All UK hosts have a mandatory single fee (since June this year). Good news - it saves you the trouble of having to decide 😀

Like @Elaine701 it looks to me as if split fee may be on its way out altogether.

[Petrona2]

Hi  Shelley, thank you very much for. I will go back to split fee.

[Shelley159]

You can try in your settings @Petrona2 but I really don't think it will be an option for you.

[Petrona2]

I think you are correct, it’s not an option.

[Helen3]

You can't go back to a split fee in the UK @Petrona2 

[Petrona2]

Thank you. Which is better split or single fee

[Shelley159]

Single fee is simpler and in line with other platforms as @Elaine701 has said.

The main disadvantage is that hosts who do plenty of business may reach a threshold (such as mandatory VAT registration) sooner.

[Helen3]

From a guest point of view it makes no difference @Petrona2 

[Petrona2]

I realised that.

[Roy1390]

I just tried using the app tool that Airbnb provides to automatically adjust the daily base price. However, as per Airbnb, this new single-fee charge will be applied to other host-charged items as well,  such as extra guest fees, cleaning fees, pet fees, etc. The app does NOT appear to adjust these other charges. If you, as the host do not adjust them manually yourself, your overall payout WILL be lower, it appears. It is very confusing.

Roy

[Richard3335]

Hi Roy, yes I just saw the notification from AirBnb and noted this comment "Airbnb service fees are a percentage of a host’s nightly price and any fees a host adds, like a cleaning, pet or extra guest fee.".

As you suggest, for a Host to receive a payout of the same amount prior to this change, the Host needs to set a grossed-up price that includes all fees, taxes and charges.

I think AirBnb might have missed something  in their tool / calculations. You don't simply add 15.5% to your previous payout to  arrive at the same payout net of the new 15.5% fee. For example:

1. If my payout was previously $100 (net of Host fees) then if I add 15.5% my new price is $ 115.50
2. If AirBnb take 15.5% off that amount I am left with $97.60
3. The correct approach is to take $100, divide it by (100 - 15.5) and then multiple by 100. E.g. 100 / (100 - 15.5) * 100  becomes 100 / 84.5 * 100, which gives $118.343. To check the result: $118.343 gross fee less 15.5% = $100.00 net fee

So, instead of increasing your old payout by 15.5% you need to increase the amount by 18.343 %.

And Yes, the new base amount needs to include all fees. So if I was charging $100 per night for 5 nights and had a $75 cleaning fee the maths is:

1. overall stay cost is $500
2. overall grossed-up costs are $500 + $75 = $575
3. what I need to charge a Guest per day is now $575 / 5  = $115 per night
4. grossing up becomes: $115 / 84.5 * 100 = $136.09. So I need to charge $136.09 as the new daily rate
5. checking this by working this backwards: $136.09 less 15.5% = 114.996 = $115.00 when round to 2 decimal places
6. Or put another way, my fee for the total stay is $680.45 which less 15.5% become $574.98

So this not as easy and obvious as AirBnb implies. I can see other "unintended consequences" with this change too. Consider what happens when you offer (say) a 10% discount on the daily fee you are charging. This discount of 10% would then be applied to all the components that make-up the daily fee, such as cleaning and taxes. I only ever discount the costs I charge and not the fixed costs of other providers, of which I have not control over. So basically need to pay more from my net payout to cleaners and other services / taxes.

If I have got any of this wrong please feel free to correct me (anyone) as am still getting my head around it.

Cheers

Richard