Service Fee Increase (June 2020) - No Communication with Hosts

[Becky88]

The Service Fee that Airbnb charges guests has gone up to 16.63% in the U.S. versus the previous rate of 14.12% (that's an increase of 2.5 percentage points.)

There has been NO communication about this with hosts and NO update to their own Help Page which still quotes "typically less than 14.2%".

https://www.airbnb.com/help/article/1857/what-is-the-airbnb-service-fee

Hold on, let me check.  Nope, still not feeling like Airbnb thinks of hosts as partners.

[Becky88]

@Sarah977 

I did a spot check of the top search result in 5 additional U.S. cities, 4-day and 18-day bookings in Feb 2021, 6 guests, entire house properties.  Service fee rates were consistent except for one (Houston), so I'm sure there probably are other cases as well.  It would be nice if Airbnb were transparent about fees.

4-day / 18-day bookings:

Seattle WA:  16.67% / 16/61%

Madison WI:  16.59% / 16.61%

Charleston SC:  16.80% / 16.63%

Atlanta GA:  16.67% / 16.60%

Santa Barbara CA:  16.57% / 16.62%

Houston TX:  14.10% / 14.10%

What has given you the impression that Airbnb increases the Service Fee in conjunction with host price drops - has that happened to you?

[Sarah977]

@Becky88  No, hasn't happened to me- I have never reduced my price, so I wouldn't know personally if that's the case. But I have read other posts from hosts and guests here on the forum that would make that appear to be so.

The thing is, you seem to think the percentage has to do with the country, but I think it has more to do with the listing. Try checking out private room listings in your area for 1 or 2 people for the same number of days and see how it comes up. I'd be curious to know. 

I realize you are looking at similar listings to yours as far as number of guests the place accommodates, etc, and that may be similar, but I don't think the percentages are country-based.

The thing is, we can't really expect that Airbnb would simply keep a stagnant service fee- the cost of everything goes up little by little- groceries, gas, services, etc.

[Mary419]

When I first signed up for Airbnb the fine print clearly said the service fee was a range. It said typically 12-20%

I never understand why people think it’s a set number. 

it’s only a fixed percent for pro hosts who sign up to pay it for the guest. Otherwise it fluctuates. In fact based on my experience when I ask guests what theirs was... it’s highest if the rent rate is low and the AI detects there is room to charge more. 

[Becky88]

@Mary419  At the individual listing level, it is a set percentage at any given point in time.  I can look back in 8 years of hosting history and see quite clearly when Airbnb increased it.

After posting this question in June 2020, I discovered that in this case, it wasn’t an increase on my listing, as occurred in Jan 2020.  It was due to using the promotion tool. Incredibly, when demand is down and your biz is struggling, and you use this tool to lower your prices... Airbnb actually INCREASES the Service Fee. 

I removed the promotions and the Service Fee went back to 14.2%. Solved. 

[Becky88]

@Mary419 I should add that the Service Fee on my listing used to fluctuate based on the total cost of the booking, but that’s no longer the case. 

[Becky88]

@Sarah977  the point of my post was that Airbnb increased the Service Fee on my property and continues to offer no transparency about how fees are calculated or when they increase.  If I could edit out the "in the U.S." I would, but that's simply not the point of the post.

Airbnb increased the Service Fee on my property in June from 14.1% to 16.6%.  Given the points in time when I've observed other Service Fee increases and the way I've managed pricing in the past, I have no indication that this increase has anything to do with price drops.

Airbnb also increased the Service Fee on my property in Jan of this year, from 12.9% to 14.1%.  So in total, that's an increase of +29% in less than six months.  That's not "little by little" in my book.

[Sarah977]

@Becky88  Yes, I understand. But Airbnb has never been transparent about almost anything to hosts, let alone share how they arrive at service fees and when and where they up them. I'm not saying it's right, I'm just saying that its not at all surprising that they don't share this info.

[Ryan2140]

@Becky88   I looked at your property real quick and see as a guest booking it, the service fee is exactly 14.2% as Airbnb describes in the What are Airbnb service fees? article you linked to. So are you saying you have to pay 16.6% on your side as a Host to get the payout? There article says you should only have to pay 3% to get your payout. If you are paying 16.6%, that seems very high for Airbnb to be taking 30.8% overall profit. 

[Becky88]

Hi Ryan@2140,

No, I was saying that back in June 2020, it appeared that the Service Fee (the fee charged to guests) had gone up.  Later I discovered that the Service Fee had gone up because I started to use the promotions tool to offer guests a % off on upcoming unbooked nights.  When I eliminated the promotions, voila, the Service Fee went back down to 14.2%.

Last time I looked, I couldn't find any Airbnb documentation that disclosed this increase when using the promotion tool.  I also can't say whether this increase was a limited test by Airbnb, or whether is was -- and still is -- in widespread use.  All I can say is that, IMHO, it's not too cool for Airbnb to *increase* the Service Fee, when a host has unbooked nights and feels the need to *decrease* their rates.  I realize that one could say that the increased Service Fee "only" increase the price to guests, but that increase makes my listing less competitive and might be the reason I miss out on a booking.

Philosophically @Catherine-Powell , increasing the Service Fee on listings that use the promotion tool (if that's still the case), runs counter to helping hosts who are struggling.

Becky

[Bruce90]

Becky, how did you discover the service fee  increases? Do you run your own calculations?

I just saw this last week on a new reservation the section that shows what the guest pays. I had never seen that before!

Thanks for a reply if you see this.

Bruce in Sedona

[Becky88]

Hi @Bruce90 , yes I keep a running spreadsheet detailing all of the cost components to be able to catch errors and answer guest questions. 

[Jerry250]

@Becky88 Thanks for the post. Just checked and the service fee on our UK listing is now 20% (was previously 16.5% when I checked last month). This total will be 16.5% to airbnb and 20% of the fee as a UK govt tax on top  (20% VAT). We don't lower our rate to accommodate the fee.

[Fred13]

I have never worried about what Airbnb is charging or not to the guest, just focused on what I charge and what I am making. I always assumed that what they charge the guests must be acceptable to them, otherwise they wouldn't book my place in the first place. Perhaps this way of thinking is based on the fact that to me they are not my business partners, but simply that we are in a quasi-symbiosis that works until it does and ends when it no longer does.

[Resort-Vacation-Rentals0]

---

@Fred13 wrote:

I have never worried about what Airbnb is charging or not to the guest, just focused on what I charge and what I am making. I always assumed that what they charge the guests must be acceptable to them, otherwise they wouldn't book my place in the first place. Perhaps this way of thinking is based on the fact that to me they are not my business partners, but simply that we are in a quasi-symbiosis that works until it does and ends when it no longer does.

---

Exactly our philosophy as well Fred!

[Ricardo85]

Greetings from Brasil.

Uses to be 12%, but now it is 14.2%.