Single fee structure impact

[Aaron1508]

Hello,

i would like to discuss the new and surprise single fee structure. I would love to talk off channel with an Air B and B corporate member. Unfortunately, the call centers cannot go above and beyond script. 

I could not attend the only webinar. Any advise on how to reach out to one of these team members?

[Mike-And-Jane0]

@Aaron1508 I doubt there is anything you can tell Airbnb that it doesn't already know.

The effect on a US host is near zero so its not worth worrying about.

[Aaron1508]

Thank you 

[Meral238]

I think the main problem with the new pricing system is that the cleaning fee included within the 15.5% cut from us which is unfair. And I must say my August is totally empty due to these changes.
 
1. Airbnb are not the one doing the cleaning or paying for cleaning materials etc. They forced us to increase the cleaning fee along with nightly price do to the changes.
 
2. Because of 15.5 % cut from the final price, our take home gradually reducing. In the past we could adjust the cleaning fee and receive take home money around the amount we need. Now it is gradually reducing so either we won't accept long stays or increase our price as high as possible and avoid short stay. In both scenarios, we lose some potential guests. Let's say our nightly charge 40 pounds and we increased the cleaning fee to 40 pounds too (it used to be lower), with 10 night stay, our take home will drop to 37 pounds..longer will be less...and if someone pay tax on it, if they are hosting more than the tax free allowance, then they don't earn anything...as there are always empty nights and nightly take home on the booked nights are reducing a lot..


Some people says people were abusing it. Showing like 25 per night but charging 200 for cleaning. Who would book your place if they see 200 for cleaning fee! That is why the cleaning fees were less than current rates in the past. I totally disagree! If there were those charging like that they could limit cleaning fees at certain amount.

Now I have been told that I need to increase my cleaning fees. Then I lose short stay people, like for 5 night and 10 nights if I adjust my price for 30 nights..

Don't know if I need to target long stay people or short stay people...either way, I am losing some potential guests... it is all because of the cleaning fee included and there aren't other bands, no way to earn good money...you end up earning peanuts...
 
I think, they need to exclude the cleaning fee from Airbnb cut as before..In the long run it is harmful for both hosts and Airbnb itself as we are losing some potential guests...short or long stay guests depending in whether you are increasing the price and cleaning fee...
 
And we need more cleaning fee bands. There is 2 band now but it is not enough as there are longer stay guests. Like less than 5 nights, less than 10 nights and less then 30 nights, 30+...

[Aaron1508]

I do feel it was a bad overall decision for Air B and B. It has not been host friendly as of the past year or two. They didn’t have to burden the hosts so heavily for transparency. They could have given an immediate breakdown showing their exact fee in %. I had to raise my cleaning fee by 15% because I was already paying over 25% more than collected for cleaning. It would help if they left this part out but I think it will take a partial

collapse of this business model for them to change. Otherwise the hosts won’t be leaving as many amenities and the quality will go down as well. It is hitting hard in the US as well and I don’t agree with the other persons response to my question. 

my bookings thru Air B and B went down significantly once I made the change. I guess we will see if it normalizes when everyone is onboard next month. 

[Vanessa2864]

@Aaron1508  

I keep seeing the same argument repeated in this forum: "Just increase your price by 15.5%."

The discussion focuses almost entirely on the mathematical neutrality of the fee: if a host can increase their price by exactly the amount needed, their gross earnings after fees remain roughly the same.

That is absolutely true.

What is often overlooked, however, is the economic neutrality of the fee: whether the market will actually accept that price increase without reducing bookings or occupancy.

The first is a simple, cold equation. The second depends on demand elasticity, competition, and the availability of alternatives.

Math explains how fees work. The market determines whether that math actually holds true in practice.

If you're operating in a highly competitive market with many similar listings, in an area with weak or seasonal demand, or where guests are very price-sensitive and compare total costs carefully, raising your price by 15.5% may simply not be an option. The same is true in markets where guests can easily book directly with hosts or choose hotels or other accommodation instead.

Airbnb's reasoning only holds in markets where hosts have enough pricing power to pass the entire fee increase on to guests. In many markets, that simply isn't the case. The market will ultimately test these new prices.

In less competitive markets, higher prices may stick. In highly competitive markets, however, some hosts will eventually lower their prices again in order to remain competitive.

That's why there isn't a one-size-fits-all answer.

The slogan, "Just raise your price by 15.5%," ignores a fundamental reality: once everyone is moved to the host-only fee model, listing prices are no longer determined solely by hosts. They are determined by supply, demand, and competition. Whether that 15.5% increase is sustainable will be decided by the market, not by Airbnb.

If the market fully accepts a 15.5% price increase, then switching to the host-only fee model may leave a host's earnings largely unchanged, assuming the host operates in a tax system that taxes net income rather than gross revenue.

If the market only accepts part of the increase, the host recovers only part of the additional fee, and profit margins shrink.

The worst-case scenario is when raising prices makes a listing uncompetitive. In that case, the host has to keep prices where they are to remain in the market while absorbing the entire additional fee, resulting in lower net earnings.

For many hosts, the second scenario is the most realistic. The market doesn't have to reject a 15.5% increase outright. Even if it only supports a partial increase, the host's margins will still decline.

In highly competitive markets, being able to raise prices by only 5–8% instead of 15.5% can make a significant difference to profitability.

[Emily352]

@Vanessa2864 

What do you think will happen in the months after the change?

[Vanessa2864]

@Emily352 

It depends on the market. More specifically, it depends on how easily that listing can be compared with competing listings.

The fact that Airbnb is moving to a model where the host pays a 15.50% + VAT commission does not mean the host can automatically pass that entire cost on to the guest simply by raising the price.

Yes, @Elaine701  is right about one point: if a host raises the price by exactly enough to offset the commission, the guest’s total price may end up roughly where it was before. Fine. But that doesn’t refute the argument.

Under the old model, part of what the guest paid was an Airbnb fee charged directly to the guest. Now that same cost is being pushed onto the host. If the host wants to keep the same net income, they have to build that cost into the accommodation rate. Their listing is then competing against other listings.

And that is where the market gets the final say.

If every host raises their prices by exactly the same amount, as Airbnb presumably expects, then yes, the effect could be largely neutral. The guest’s total cost stays roughly the same, and relative competitiveness doesn’t change much.

But that is a big “if”.

What happens if some hosts decide they cannot afford to lose bookings and absorb part of the commission instead? They take the automatic price increase, then cut their rate again to stay competitive. Suddenly, the hosts who pass the entire cost through are relatively more expensive.

Not necessarily more expensive than they were before. More expensive than the alternatives available to the guest right now.  And that distinction is crucial.

The guest doesn’t care whether the higher price is caused by an Airbnb commission, a tax, the host’s mortgage, or anything else. They see the available listings and compare prices. If another comparable property is cheaper, that is the one they may book.

So this is the part I think is being overlooked: the host can choose to raise the price, but the host cannot choose whether the market will accept that price.

If the market accepts it, great. The host has successfully passed the commission on to the guest and preserved the margin.

If the market doesn’t accept it, the host has two choices: accept fewer bookings or reduce the price again. Either way, the host ends up absorbing part of the cost, either through lower occupancy or through a lower margin.

And the occupancy effect alone can be enough to make the economics worse.

Take a very simple example. Suppose an Airbnb host was selling 20 nights a month before the change. They increase their price enough to compensate for the new 15.50% + VAT commission. But the higher price makes the listing less competitive in a given area, and they lose 5 nights. They now sell only 15 nights instead of 20.

So yes, they may have successfully passed the full 15.50% + VAT increase on to the guest on every night they actually sell. But they have lost 25% of their bookings.

And that is the distinction being missed here: passing a cost through in the price is not the same as preserving revenue or occupancy.

Some markets will have enough demand and limited enough supply to absorb the increase with little impact. Others - especially oversupplied, highly competitive markets - won’t. In those markets, some hosts will have to choose between lower occupancy and lower margins.

The real questions is not whether the host is allowed to raise the price. Of course they are. The real question is whether guests will still book at that price. That is something Airbnb and the host do not get to decide. The market does.     

[Vanessa2864]

That’s exactly what I said above would happen.

If all hosts raise their prices by the same amount, as Airbnb seems to assume, the overall effect could be largely neutral: the final price remains roughly the same, and the competitive landscape doesn’t really change.

But that’s not necessarily what will happen.

If some hosts lower their prices after the automatic increase in order to stay competitive, then the hosts who pass the full increase on to guests simply become more expensive relative to the alternatives. Not necessarily because the guest is paying dramatically more than before, but because they’re now comparing that listing against cheaper options.

Hosts can try to protect their net income by raising their price, but they don’t get to decide whether the market will accept that higher price. The market does.

[Emily352]

@Vanessa2864 

So, could a slight price drop be the game-changing move? People have been talking about it all over social media for days.

[Vanessa2864]

Sometimes, yes.

As hosts, we control our price. We don’t control what guests are willing to pay, what competitors charge, or how attractive those alternatives become when our price goes up.

So the real question isn’t: “Should I raise my price by 15.50% + VAT to pass the new commission on to the guest?”

It’s: “What price will maximize my total revenue?”

In other words: "Can I raise my price enough to cover the commission without losing bookings?"

If yes, great. The guest effectively pays the higher price, while the host technically pays the commission.

But in a competitive market, maximizing revenue matters more than simply maximizing the nightly rate. A higher price means more revenue per booking, but potentially fewer bookings.

That’s why absorbing part of the commission can sometimes be the smarter move. The best price is not the one that passes 100% of the commission to the guest. It’s the highest price the market will actually accept.

And there’s another issue.

Airbnb support has recently confirmed to Italian hosts that, for algorithmic purposes, only Flexible (24-hour) and Moderate (5-day) are treated as “free cancellation” policies. Limited is not.

That matters.

With the new 15.50% + VAT host-only fee, Airbnb gets its commission directly from the host, so it has an even stronger incentive to favor listings that convert well at a competitive final price.

If Limited cancellation is treated as a disadvantage, hosts using it may already be starting with a handicap.

Maybe I’m being cynical.

But as the saying goes:

“It’s a sin to think badly of people - but you’re often right.”

[Vanessa2864]

Sometimes, yes.

As hosts, we can set our price. What we can’t set is what guests are willing to pay, what competing listings are charging, or how much more attractive those alternatives become when our price goes up.

The price that maximizes your revenue is not necessarily the price that allows you to pass 100% of the commission on to the guest. It’s the price the market will actually accept.

And then there’s another issue that has come up on the Italian forum over the past few days.

Airbnb support has recently confirmed to Italian hosts that, for algorithmic purposes, only Flexible (24h) and Moderate (5 days) are treated as “free cancellation” policies. Limited (refund up to 14 days before check-in) is not.

Under the old fee structure, Airbnb had to balance the guest-facing price, guest fees, host fees and conversion. With the new 15,50 + VAT host-only fee, Airbnb takes its cut directly from the host. So Airbnb has an even stronger incentive to push listings that converts well at a competitive final price. And if your listing has a “Limited cancellation policy”, you may already be starting with a handicap.

Basically, the algorithm is being told: “This listing doesn’t offer free cancellation”

So it has a reason to favor the ones that do. Limited is still officially available in Italy, but I have a feeling it could slowly become a second-class policy in the algorithm. And the new host-only fee structure may make that even more pronounced.

Maybe I’m being overly cynical. But you know the saying: “It’s  sin to think badly of people, but you’re often right”.

[Elaine701]

@Vanessa2864 

What you said there would be valid if there were any tangible increase in price to the guest. 

Luckily, there isn't.

Unless of course you choose to significantly increase your price above what it was in the split fee model. But that would be your choice. 

[Vanessa2864]

@Elaine701 

You’re right about one point: if a host raises the price by exactly enough to offset the commission, the guest’s total price may end up roughly where it was before. Fine. But that doesn’t refute the argument.

Under the old model, part of what the guest paid was an Airbnb fee charged directly to the guest. Now that same cost is being pushed onto the host. If the host wants to keep the same net income, they have to build that cost into the accommodation rate. Their listing is then competing against other listings.

And that is where the market gets the final say.

If every host raises their prices by exactly the same amount, as Airbnb presumably expects, then yes, the effect could be largely neutral. The guest’s total cost stays roughly the same, and relative competitiveness doesn’t change much.

But that is a big “if”.

What happens if some hosts decide they cannot afford to lose bookings and absorb part of the commission instead? They take the automatic price increase, then cut their rate again to stay competitive. Suddenly, the hosts who pass the entire cost through are relatively more expensive.

Not necessarily more expensive than they were before. More expensive than the alternatives available to the guest right now.  And that distinction is crucial.

The guest doesn’t care whether the higher price is caused by an Airbnb commission, a tax, the host’s mortgage, or anything else. They see the available listings and compare prices. If another comparable property is cheaper, that is the one they may book.

So this is the part I think is being overlooked: the host can choose to raise the price, but the host cannot choose whether the market will accept that price.

If the market accepts it, great. The host has successfully passed the commission on to the guest and preserved the margin.

If the market doesn’t accept it, the host has two choices: accept fewer bookings or reduce the price again. Either way, the host ends up absorbing part of the cost, either through lower occupancy or through a lower margin.

And the occupancy effect alone can be enough to make the economics worse.

Take a very simple example. Suppose an Airbnb host was selling 20 nights a month before the change. They increase their price enough to compensate for the new 15.50% + VAT commission. But the higher price makes the listing less competitive in a given area, and they lose 5 nights. They now sell only 15 nights instead of 20.

So yes, they may have successfully passed the full 15.50% + VAT increase on to the guest on every night they actually sell. But they have lost 25% of their bookings.

And that is the distinction being missed here: passing a cost through in the price is not the same as preserving revenue or occupancy.

Some markets will have enough demand and limited enough supply to absorb the increase with little impact. Others - especially oversupplied, highly competitive markets - won’t. In those markets, some hosts will have to choose between lower occupancy and lower margins.

The real question is not whether the hosts are allowed to raise the price. Of course they are. The real question is whether guests will still book at that price. That is something Airbnb and the host do not get to decide. The market does.

[Meral238]

Don't add any cleaning fee and remove less than 3 nights bookings from your listing! I have asked this to Airbnb customer service, because when you add cleaning fee and allow both short and long stay bookings then if they book a long stay your take out gradually reducing (as the include this one off cleaning fee in the single fee and then take their %15.5, so that your net earning reducing but their commission increasing. They say customer has to see single fee, no cleaning fee, no pet fee etc separately.  I was like that is fair but why you are taking your commission aftet my cleaning fee 😆 it is effectively recuding my net earning when it supposed to cover my extra expenses for short stay people and do other way around 😆). Anyway, you can calculate it for yourself, you will see, it is gradually reducing. Your tax will get more complicated too.

They told me If you would like to receive 40 pound per night then your night rate needs to be 48 pounds (+%18.35).  I was asking what about if add cleaning fee. calculate this then? i dont receive 40 pound. Obviously he couldn't calculate and told me the cleaning fee now with this pricing system, it is obselate...you have to charge single fee!

If you remove cleaning fees then you will receive 40 pounds for every night after their fee, but if you add cleaning fee, with long stays your nightly take out after their commission dropping to 30 pounds lol...Cleaning fee that we were adding because of the short stays as nobody would like to host people for 1 or 2 nights from 40 pounds ‌‌😆‌‌ so once you change your listing to minimum 3 nights then you are fine...

Anyways with this system Airbnd damaging their own system because no one will take short stay people any more. It doesn't worth to get guest, do all preparations for 40 pounds for one night...

Airbnb customer service told me you are right, there is this problem, I will pass your concerns...I told them you are taking the opportunity from me to host short stay people also damaging your own business too...because there will be a lot of people like me who won't be willing to host people with small money for 1 or 2 night if I need to remove the cleaning fee to get my desired nightly rate...he said he will pass this one to the relevant department. I was like if we can't use the cleaning fee, why do you have it there? It is reducing my net earning, if I add cleaning fee...

he couldn't answer my questions, he just told me remove the cleaning fee, the only solution is this and if you don't want to get short stay people with that same rate then limit it with minimum 3 nights..
It is really frustrating now, I can't get booking any more. Now trying his suggestion, if this doesn't work, I guess I will have to rent my extra room for a permanent lodger.