Simplified pricing

[Antoinette151]

Hi everyone,

I just received an email from Airbnb regarding their new simplified pricing system. They explained that they will now take 15% of my payout amount. Has anyone received this email? And how do you plan on working around this? I think I need to get my own website. Please share how you all went about developing your own website!

regards

Antoinette 

[Emiel1]

@Antoinette151 

Airbnb offers different price structures regarding the service fees, they are listed here:

https://www.airbnb.com/help/article/1857/what-are-airbnb-service-fees

In your account (section payouts) you useally can choose the pricing structure.

(but there are exceptions, like when using property management software)

If you move (or are obliged to move) to "host-only" fee, you need to increase your prices with same percentage.

[Antoinette151]

Thanks for the assistance guys! Appreciate it!

[Flavia202]

What was the reason airbnb gave for the pound of flesh, @Antoinette151 ?

[Debra300]

@Antoinette151 @Flavia202,

Airbnb changed my account to simplified pricing in April.  This is the same method that other platforms use, such as Booking and Expedia.  The commission is 15%, and only the host pays the commission.  I took the opportunity to raise the nightly rate to cover the additional service charge costs, and also rolled in the cleaning fee.  Now, when guests see my rates they are no additional fees when they click the details page.  I also added a graphic on the main photo to indicate this.

It is difficult to tell if simplified pricing has had any impact for us given the St. Lucia government's policies regarding COVID certification of non-villa STRs.  We don't have a pool, fenced property and an on-site security guard, so we were closed from March 2020 until July 2021 (entry policies for vaccinated travelers went into effect at the end of May).  Since re-opening, all of the reservations have been from returning nationals or Caricom residents who used Booking, or locals who booked with us directly (usually in response to FB Marketplace promos that I posted offering a discounted rate for locals).  The base nightly rate on Booking is the same as on Airbnb, but I charge a 5% service fee for credit cards and an 8% electricity fee.  So, our guests pay more to book on the other platforms, but I think the reason why so few Caribbean folks use Airbnb is because they are not marketed to become Airbnb customers.  There aren't any ads that encourage local getaways or regional travel.  Instead our respective countries are always highlighted solely as destinations for foreigners to visit.  Thus, many Caribbean folks may not feel as if they are invited to become a part of the Airbnb community.

[Flavia202]

Good tip @Debra300 . I like that move - to roll your fees in one!  Not feeling Airbnb much these days so I've been marketing to my network and so on. It's been reaping success albeit slowly. Before Covid Jamaicans were hot on Airbnb (I'm late to the party) but the pandemic has cooled things a lot - to the extent that many have turned to doing longer term rentals.

[Antoinette151]

Thanks for your tips! Will adjust my prices accordingly and offer one rate. Do you have a website? I’m thinking of setting up a website and doing more direct bookings!

[Debra300]

@Antoinette151,

Yes, we have a website, but we don't get many reservations through it.  We will not renew when the hosting contract is up, because the cost of the website has been significantly more than the commission paid to the OTAs.  I believe that social media, apps such as FB and IG is a very viable marketing channels.  I just need to become more familiar with using them.

[Antoinette151]

[Flavia202]

Ok. I see, @Antoinette151 ..

[Branka-and-Silvia0]

@William810  please help me with math, I am struggling  😄

in Croatia we have to pay 25% VAT on Airbnb provisions.

Airbnb provision is 3% x 1,25 VAT=3,75%

Now, if we want $100 we have to charge 4% more

100$x1,04= $104/night. After deductions $104x0,9625=$100,10

if Airbnb charges 15% fee it will cost us 15% x 1,25 = 18,75% (round it on 19%)

If we want $100/night we have to charge 24% more

$100 x 1.24 = $124/night. After deductions, $124 x 0.81 = $100,44

So, we will have to raise our prices from $104 to $124 .... it is 20%

Our guests are paying now a 15% guest fee.

104x1,15=%119,6/night.... but with a host-only fee, they will pay $124/night.... or 4% more.

[Mike-And-Jane0]

@Branka-and-Silvia0 I think the last paragraph in your maths is wrong. The guest currently pays 104x1.15 PLUS VAT on the .15 (say 25%) so 1.04x1.1875=1.235

How it all works out is actually dependant on the VAT rate. At 20% (where we are) it works out slightly cheaper on the new system

[Branka-and-Silvia0]

@Mike-And-Jane0 

No, my last paragraph is about what THE GUEST pays now and it is 15% GUEST FEE to Airbnb (without VAT)

The guest also pays a HOST FEE 3% + VAT25% ( but both included in nightly price)

Another problem is - we have to pay some other taxes on our GROSS income (before Airbnb deduction) so we will have to raise our prices by a few extra % to cover these too .

Airbnb low host-fee was one of the reasons why I listed on Airbnb and not on Booking.com

[Mike-And-Jane0]

@Branka-and-Silvia0 Strange because our guests pay 14.2% Airbnb fee plus Vat on that 14.2%. Indeed when I look at your listing the service fee includes VAT and seems to be 14.2% +20%VAT. Perhaps this VAT at present depends on where the guest is based?

In the Uk we also need to keep below the VAT threshold with our gross earnings so for some hosts the extra Airbnb fee coming their way will mean they have to charge VAT on the full rental price!

[Jake408]

The only winner is AirBnB