Do you Include all Airbnb service fees in your price?

[Patrick947]

Hi all! 

Are you aware of this feature in Airbnb - to include all the fees in the price so that the guest will not be charged a service fee? - see pic below

A lot of people try to get a discount because the service fee is high. Up to 20% on top.
Has anyone tried to raise their prices 14% and then show a price will all included for their guests?
I know guests hate seeing the fees... and so do I when I travel. It's more psychological than anything else. But I was wondering if anyone has done any experimenting?

Best, Patrick

[Lizzie]

Interesting post here @Patrick947. Thanks for starting this and sharing this option here in the Community Center.

What are you intial thoughts on this?

Has anyone else gone for this option or what are your thoughts on this?

[Mark116]

Even though it will be the same price as someone who doesn't wrap all fees together, it will appear to the guest as a higher priced listing, so there is no benefit to the host.

[Lisa723]

@Lizzie @Patrick947 Wow, yet another way for Airbnb to obscure its fees and shift the burden onto hosts.

[Lizzie]

Hey @Lisa723,

Good to hear your initial thoughts on this. I remember seeing as part of the Host Q&A quite a few questions from hosts asking to make the price a guest sees, one price. To me this could be a possible solution to help with this. 

Based on your reply here, do you think there is a different way this could be presented? (To add, this is an optional setting so it's up to the host to choose). 

[Lisa723]

@Lizzie I would not choose to do it, since it would make my prices look higher than hosts who don't do it-- and I think Airbnb's fees should be transparent to hosts and guests so everyone is aware of where the money is going.

IMO search results without dates should show the range of minimum/maximum nightly rate for each listing, including all service fees, and the sum of any flat fees such as cleaning fees; and results with dates should show the total price including all fees.

[Branka-and-Silvia0]

Tnx for posting this @Patrick947 I wasn' aware of it .

There are few reasons why I don't want to include guest service fee in my price:

1. more expensive listings are down in searches.
2. when guest is searching he will see nightly prices with and without service fee so the listing without service fee included will appear cheaper then the other with service fee included although at the end the guest would pay the same.
3. Up to certain amount of brutto income we can pay tax annualy - per bed but if we pass that amount then we have to do accounting and books and it is not simple , it is much more expensive and time consuming. It's not worth it.
4. We have to pay additional tax on our brutto income (before Airbnb service fee is deducted) so if I rise my prices to include guest's service fee then my brutto income is higher and my tax is  higher too.
5.  In Croatia we also have to pay 25% VAT on Airbnb service fee so it is a big difference if my service fee is 3% or 14%  (3 + 25%= 3,75   vs  14 + 25% = 17,5 )

So no, I will not include guest service fee in my prices.

[Branka-and-Silvia0]

btw, where did you find this article ? I can't find it.

[Patrick947]

@Branka-and-Silvia0 - it's not an article, it's a screen shot from the setting on the Airbnb website. 
Click your profile pic in top right corner --> Account Settings --> Service Fee 

Lot's of good reflections. In Colombia, Airbnb does not charge VAT on top of their fees, so that part would not be a problem for me. 

Oddly enough, I have apartments that range from $30 per night to $150 per night - and I have the highest occupancy in the expensive units, so I'm not so worried about the price per night Also, I rank on first page for of search results in Cali, so I'm not too worried about being pushed down, although that could be a wake-up call as I'm receiving about 60-75% of my business from Airbnb. 

@Lizzie - my initial thought is that I personally don't like anywhere where they give me a price and then they add the sales tax, the service fee, the tip, etc. I prefer to just see a price and what you see is what you get. It seems like most hosts have the setting so that the fees are added on top - so most guests on Airbnb are used to seeing the price being displayed in this way... I'd really like to hear from someone who has the "all-inclusive setting" activated to see what kind of response / traction / occuancy they are getting - and also know if they have had to lower their prices?

[Branka-and-Silvia0]

@Patrick947I don't have "service fee" on my "account settings" page. So maybe this option is not available here yet.

[Patrizia16]

@Branka-and-Silvia0

it was a 4-week test to see if the hosts had agreed to join ... this is what they say in ABB ... but I think it was just a way to hide their high commissions ... We Host, would have lost many money with an increase in both taxes and VAT ...

.

[Elena-and-Antonella0]

Very interesting topic, i am looking forward to reading more!

I am personally not changing my settings for now, but I am considering doing it, with the concern that a higher price will intimidate my potential guests..

[Victor607]

It may a California thing . I also see the option , but I’d try for 1 listing , but I have 15 listings and I don’t way to choose per listing. I don’t have an initial good feeling on it. I’m a financial planner by trade and tax wise I don’t see it as a big issue in the US. 

We incense our prices by 14% then Airbnb charges a 14% comission thus the net pay out should be the same . However , guests would benefit from an overall lower price . Think about this 14% commission as the 3% credit card fee, you never actually receive the gross of the reservation and the amount that you show on your taxes is what you were actually paid (net) not the gross amount of the reservation thus your net earnings from Airbnb on your taxes become your gross earning minus all of the expenses you incurred ( any deductible fees) after those then you get your net earning which then go into your tax bracket depending if you are a sole prop or Corp etc... 

[Antonio1243]

Well Victor, in the US airbnb income is taxed like normal  rental income at least at the federal level

(or at least it was when I lived there).  There are other countries that are a bureaucratic nightmare in which Airbnb is income is treated differently.  As several people have mentioned, we have a VAT here in Europe.

In Portugal, I have to pay VAT on the service fee so paying 23% on 3% is far less than paying that on 14%.  Additionally, the simplied tax structure for airbnb income is you pay income taxes on 35% of the gross income (you can't discount expenses since it's assumed they are 65% which on the surface seems generous).  If I have a 14% fee, then I'll have to raise my prices and now my gross goes up and so do my taxes even though I'm not making any additional money.  I'm sure there are many European countries with a similar tax structure.  In short, if airbnb chooses to implement this across the board, I'll find another platform to list on.  I think this is the crux of the problem.  What Airbnb needs is another real competitor that will force it to stop screwing their hosts.  

my two cents

Tony

[Susan17]

There's now a two-tier fee structure on Airbnb. While this feature was initially tested on (a few) regular hosts, to give the impression that it was an option for all hosts, in reality, it was only ever intended for the professional and commercial operators in the long-term (same as Plus, the now defunct Co-Host Marketplace etc)

Option 1 - Regular Hosts 

Host and Guest Fee. 

Host pays 3-5%, Guest pays up to 20%

Airbnb's total take on regular host bookings = up to 25%

Option 2 - Pro/commercial Hosts

Guest only fee. 

Host pays 14%. Guest pays 0%

Airbnb's total take on Pro/Commercial bookings = 14%

Only a matter of time until there's a nice big "No service fee to guests!!" emblazoned on all the Pro listings, while small host listings returned in the same searches, will have no such sweeteners to attract attention to their listings.