UK Service Fee Change - Existing Bookings

[Ian56903]

Hi,

I am planning on using the automated tool to update nightly rates to take into account the service fee being paid solely by host. 

When I apply the tool it updates all rates from today onwards including rates for existing bookings. 2 questions - 

1) Why are dates before May / Junewhen  the fee change comes in  being auto updated?

2) Will guest with existing booking see any difference or will old fee structure still apply?

Thanks

[Shelley159]

The guest will see one price anyway @Nicholas558 , Airbnb has switched to displaying the cleaning fee as part of the total cost a guest sees.

The service fee (and the VAT on the service fee) also applies to the cleaning fee, so there's no difference if you keep the cleaning as a separate per-booking charge (a cleaning fee can make pricing for changeovers more accurate).

[Ray2330]

I spoke to support about the VAT on the host only fee and received the following feedback:

The 20% VAT on Service Fees

- In the UK, Airbnb is required to charge 20% VAT on their service fees.

- Is it included? Yes. For UK hosts, Airbnb’s stated 15.5% fee is VAT-inclusive.

- This means the actual service fee is roughly 12.92%, plus 2.58% for VAT (which is 20% of the fee), totaling exactly 15.5%.

- Since the Price Adjustment Tool used the total 15.5% figure to set your new rates, it has effectively 'baked in' the VAT cost for you. You aren't paying an extra 20% on top of the 15.5%.

[Shelley159]

@Ray2330 I would recommend that - when your first transactions come through on the new fee structure - you just keep an eye on the calculation and make sure that the VAT really is included in the 15.5% (otherwise you'll get out less than expected).

I'm still on the split fee, but I can say with certainty that for me both the published host and the published guest service fee percentages (3% and roughly 14.2% respectively), exclude VAT. This is how it shows in the payout breakdown:

So just double-check the VAT on a completed transaction when you have the chance.

[Ray2330]

After posting the info from Airbnb support above, I did think "hang on, that doesn't sound right!". I did aa calculation on my nightly rate and it does look like the deduction is host service fee + VAT> I have queried this again with Airbnb Support as I think the first advice is incorrect.

[Ray2330]

So I heard back from Airbnb support again and after a quite tortuous phone call when they repeated the incorrect information while acknowledging that the nightly rate figures I provided to them showed that what they were saying was incorrect, they finally acknowledged that VAT is being charged on top of the single service fee (in the UK). In practice, this means that the actual deduction made by Airbnb (service fee and VAT) is 18.8% of the nightly rate. 

I expressed my frustration at the shocking lack of clarity on this, including in their recent email and attached information!

[Shelley159]

👍 I think18.6% including 20% UK VAT. I agree with you it's unlikely that the 15.5% already includes the VAT in the UK.

[Gail1141]

This is exactly the query I had - Airbnb support, eventually, after a very painful and long phone call, confirmed that VAT had not been taken into account and the pricing tool will not 'bake it in'. I was on the Webinar this evening and this question was not raised at all. So as Shelley says, the calculation is nearer 18% to cover the VAT element too! and this will need to be done manually!

[Sally144]

Thanks for this Ray. Really important information 👍

[Sally144]

Spoke too soon! And I was so delighted to hear this. Oh well 🤣

[Zoe549]

Hiya, I’ve just used the tool and all my prices have updated (in uk, was forced to act by June 22nd) and I’ve been on with Air BnB support for about 12hrs now!

Not only does the tool not up your prices including vat but excluding, but it also updates your cleaning fee automatically…and yet air BnB support denies this (3 different agents) who claim that WE have updated our cleaning fee manually by exactly 15.5% at the exact moment I accepted the new fee structure! 

it’s driving me mad! I’m having to use AI which says the fix on my example booking would be: 

Here is exactly how to remove your cleaning fee and set up the length-of-stay discounts on Airbnb using a computer or the mobile app.

Step 1: Remove the Cleaning Fee

1 Log into Airbnb and switch to Hosting mode.

2 Go to your Listings tab and click on your property.

3 Click on Pricing and availability at the top of the page.

4 Scroll down to the Fees section.

5 Click Edit next to Cleaning fee.

6 Change the amount to £0 (or delete the number) and click Save.

Step 2: Change Your Base Nightly Rate

1 While still in Pricing and availability, scroll up to the Price settings section.

2 Click Edit next to Base price.

3 Change your base price to £106 (this covers your £100 net night + your £6 restructured cleaning fee portion).

4 Click Save.

Step 3: Add the Length-of-Stay Discounts

1 Scroll down to the Discounts section.

2 Click Add or Edit next to Length-of-stay discounts.

3 Look for the option to add a custom discount based on the number of nights:

◦ Select 4 nights → enter 3% → click Save.

◦ Select 5 nights → enter 4% → click Save.

◦ Select 7 nights (Weekly) → enter 5% → click Save.

Note: Airbnb's system will automatically apply these percentage drops to the base £106 rate when a guest inputs those specific dates, keeping your total payout perfectly mathematically aligned to your goals.

This is because our cleaning fee used to be a one off charge per booking, but they’ve now raised it and swallowed it up into our nightly booking fee, so that go the guest the more nights they book the more expensive it seems per night, which is madness!

[Shelley159]

Hi @Zoe549 

1) The cleaning fee hasn't changed. It's a per-booking fee as it always has been - It's just shown as part of the guest total. 

You can test the above by selecting different numbers of nights - the cleaning fee is charged once per booking.

2) You're doing yourself in by not adding the price increase to the cleaning fee. Airbnb's service fee is on the total charge, so you have to increase the total price (including the cleaning fee) to be in the same payout position after the change.

[Zoe549]

 

 

Heya, when I clicked accept on the new fee structure yesterday, their tool updated all my unbooked days by raising the price by 15.5% (which we expected)  but it also added 15.5% to the cleaning fee too (so from £15 per visit to £18) I didn’t do this, but Air BnB says I did.

Here’s a screenshot from an existing pre change booking, and a theoretical booking post using their tool.

I didn’t increase the cleaning fee, it was done globally to all my unbooked days: 

[Zoe549]

My issue/worry is that if it has raised the cleaning fee by 15.5% but says that they haven’t, that rise will increase my per night fee as far as the guest knows, so every night is more expensive, not just one guest-visible £15 fee regardless of trip length….unless you’re saying they somehow spread the newly increased £18 fee across all the nights once the guest picks their trip length, in which case the price a guest sees will change based on the number of nights booked but the guest won’t know WHY it’s changing if the cleaning fee is not shown to them separately?

I’ve also read that their algorithm now favours no cleaning fee, not sure if that’s true though.

[Shelley159]

Hi @Zoe549 

Yes that's right, the cleaning fee will spread out with an increase in trip length.

And the tool added the price increase to the cleaning fee on purpose, to make sure you're not worse off after the change.

You're alao right that the guest doesn't see the cleaning fee separately. They search for a specific number of nights and compare listings on total cost.

Don't worry, as long as you've added the increase to your nightly rate and to your cleaning fee, you're all set and you're in line with what your competitors also have done 👍

[Zoe549]

Great, thanks, now we just need to persuade Air BnB that this is what their tool does as they are still claiming that I added £3 to my own cleaning fee a year in advance…and just forgot!