host only fee problems

[Wouter-and-Vivian0]

Are there other people that think the host only fee is creating unfair competition??? Let me explain what happened to us. We host multiple listings on Aruba and in October 2020 we received an email from Airbnb that they were going to change the fee set up for us from 3% to 15% commission. At that time we did not felt good about that only there was really no choice and we thought it would be the same for everybody. That 'everybody' assumption was not correct.... We now found out that there are multiple hosts here on Aruba that still pay the split-fee commission in which they only pay 3% on their end. These host are also connected with a software system and manage multiple different listings. We think Airbnb is creation unfair competition and is measuring with two different standards. 

We hope that we are not the only ones and other people can join us so that we can be heard by Airbnb. 

[Helen3]

In what way does this create unfair competition? - if you are paying the whole fee you just adjust your fees accordingly . @Wouter-and-Vivian0 

[Wouter-and-Vivian0]

well the hosts that pay 3% fee to airbnb can sell their listings 12% cheaper. So if they ask $100 per night they get a payout of $97 from Airbnb. If we ask $100 per night we get $85 from Airbnb. So in order to get the same we need to raise our price and the guests will choose the other cheaper listing. I don't fully understand what you mean by adjust our fees? we can charge the guests higher fees but the total price the guests will pay is always higher since our commission to Airbnb is higher than what other hosts with similar listings pay. 

[Mike-And-Jane0]

@Wouter-and-Vivian0 what you are missing is that in the case where you are charged a 3%+VAT service fee the guest is charged 14%+VAT. So the 15% flat rate is, depending on VAT rate actually slightly cheaper than the original model.

What @Helen3 is saying is that by adjusting your rates upwards (to account for the higher fee to you) the guest will pay no more than they do today.

[Gavin65]

But guests don't see that until they book. All they see is my listing is 13% more expensive than the competition. 

[Jenny349]

This is absolutely not clear to me! 🤔

As far as I can understand, choosing Simplified Pricing over Split Fee (it’s in Profile -> Payments and Payouts -> service fee) does put you at a competitive disadvantage.

I tried it, and be careful those of you with multiple properties, the choice applies to all properties across the board, so you’ll need to rethink the pricing at all your places!

So, I changed my base price to factor in the 15% service fee I am now paying (guests pays nothing).

In travelling mode, I now see my property on the calendar looking much more expensive. Remember, at this point the guest doesn’t know there’s no service fee to be added on! He’ll only discover that once he actually clicks through to Reserve, which he may never do, because you now look more expensive!

[Jenny349]

To add to my confusion, this is what I see in travelling mode, after clicking Reserve:

[Jenny349]

Why am I seeing a service fee?

[Jenny349]

Of course, if Airbnb add a search filter such as « Only show properties without service fees », that might turn a disadvantage (?) into a strong competitive advantage.

I’ll stick with Split Fee until I’ve worked it out! 😩

[Jenny349]

Sorry, I meant to say that in travelling mode, I now see my property on the MAP (not calendar) looking more expensive than properties on split-fee pricing = a competitive disadvantage, no?

[Jenny349]

Well, no one has posted to tell me I’m wrong, so I guess that means I might be right? 
Anyone here using the Simplified Pricing option? I’d love to hear your feedback! 

[Debra300]

@Jenny349,

This past April, I received the same message from Airbnb regarding the service fee for my listings in St. Lucia.  Despite what the message stated, this change has not be rolled out to all properties on the island, and the majority still have the split service fee option.

I used this change as an opportunity to gain an additional 1.5% profit, and for market differentiation.  Prior to the change, our guests were charged about 13.5% for service fees.  Since our rates incorporated the 3% host fee, the guests were actually paying about 16.5% in total for services fees.  We removed the cleaning fee, and raised the nightly rate to cover the cleaning and service fees so that the final cost is the same as before, but now the guests are not charged fees separately.  One complaint that I have repeatedly read about is that folks are irritated that the costs displayed in search results don't includes all fees, and feel duped when they see a significantly higher total cost after they click on a listing.  

The primary photo for each listing includes a graphic that says, "No Service Fee, No Cleaning Fee".

[Jenny349]

Thank you for your detailed answer @Debra300 !

Unlike you, I didn’t, or I don’t remember, getting a message about this option. I read about it somewhere and finally found I could make the choice under Profile -> Payments & Payouts.

I’ve switched it on (and off again), but have not seen a banner stating loud and clear that the guest has no service fees to pay - are you saying that’s something you added to the cover photo yourself?

i totally understand that most hosts will want to raise their nightly rate to take account of the increased service fee which they are now paying on behalf of the guest….but until this is made crystal clear to potential guests as they browse the map/listings for properties, they may never click through to you as your price now looks higher than what competitor properties charge (at least until the final book and pay stage).

oh well, I suppose this is still a work in progress!

Thanks again!

[Debra300]

@Jenny349,

I found the no fee images online, and then used the free LibreOffice Draw application to add them to my photos:

I received the following email message from Airbnb on April 12, 2021.

[Jenny349]

Thank you @Debra300 , that’s really helpful to know!

I haven’t received that message (yet). As I mentioned, I found the option to switch to Simplified Pricing  entirely by chance (-> Profile -> payments/payouts).

Your tactic is the one I would choose: differentiation. And thank you again for sharing the great photo idea 👍

I won’t opt into this for the time being. Whilst all my competitors are still using Split-fee pricing, the increased rate I would have to apply, AND WHICH SHOWS ON THE MAP BEFORE GUESTS CLICK THROUGH TO YOUR LISTING, does indeed put me at a competitive disadvantage imho. (Sorry, not shouting 😉, just wanted to convey what I feel is an important point 😊)