Service fee

[Eero11]

Hello,

I am new to Airbnb and I have noticed, that some of the hosts pays the extra service fee instead the client. How can I make that happened.? I think it seems more interesting for client to rent  when not paying anything extra.

Thank you in advance.

[Mike-And-Jane0]

@Eero11 Go into your account and you will find the option to pay the service fee yourself rather than have the guest pay it. You will have to increase your rates to ensure you end up with the same net rate per night as you do today

[Eero11]

Hello. Thank you for your advice. Could you still help me a little, I tried to find where to change it from my account but I can't find it, could you explain where is it exactly?

[Mike-And-Jane0]

@Eero11 On a computer:

Go to your hosting home page

Click on the picture icon of you in the top right hand corner

Click on Account

Click on payments and payouts

Somewhere in the middle of the screen you then click on service fee

Choose the option you want

Good luck

[Eero11]

Thank you.

It is interesting, that I don't have that option. I guess i need to contact airbnb support for this. Thank you anyways, good community we have here. BR. Eero

[Ann72]

On your phone Menu->Settings->Payouts - then you will see this @Eero11:

 

[Elaine701]

@Eero11 @Mike-And-Jane0 

We changed from "split fee" (guest 15%, host 3%) to "host pays full commission" (15% host, 0% guest). We raised prices to compensate (actually made it slightly more than the difference). 

Unexpectedly, the bookings have accelerated remarkably since then. 

I can't identify why there's more bookings. It appears that there is no indication on our listing that the guest pays no commission, and actually the price the guest pays is a bit higher than before. It might just be that people are booking more for whatever reason.

But I find it curious that when I changed it, suddenly the bookings accelerated. Probably just a coincidence. I can't see why it would make any difference to the guest. 

[Sarah977]

@Elaine701   Have you had any cancellations since being on the simplified pricing? I have a question about it that I have asked before both on this forum and another that no one has answered.

Under the split fee system, as you know, Airbnb doesn't return the service fee to guests when they cancel outside of the free cancellation window. 

So what happens when the host is paying the entire service fees? How does Airbnb take their cut of the fees? Do they keep the same amount they would otherwise and deduct it from the guest's refund? Or do they take it from the host? 

I can't fathom how this works.

[Ann72]

Thanks for the intel @Elaine701.  The response doesn’t really surprise me as my bookings inexplicably increase every time I raise the rates.  I must sit down and do some math soon and change to this option for next year.

[Gavin65]

Hi @Elaine701 

By how much did you raise your nightly price?

Was it enough to cover your net income?

Depends on how your rental income is taxed in sunny Spain, but here in Texas I need to raise prices by about 34% to be net income neutral (even more if I include cleaning fee in the nightly price).

You can guess what raising price from $149 to $199 against competition in a market as hot as Austin does to bookings!

I am all for all inclusive pricing (a la EU where "final price" is law), but ABnB are passing the buck onto Hosts. They 100% could solve this themselves, but don't. Because f*** hosts.

[Elaine701]

@Gavin65 

Well, Airbnb commissions on total price paid were reduced from 18℅ (3% host, 15% guest) to 15% host, 0% guest. So, effectively a 3% discount in commissions.

But we raised prices 20% to account for the 15% now paid by the host alone (effectively adding 2% to the price paid by the guest). So, a 5% increase in gross income. 

Taxes, well, they take 20% of that 5% increase, so we end up with 4% increase. Rather insignificant, really. And we have a lot of deductions. So nothing notable tax-wise, really. 

[Mike-And-Jane0]

@Elaine701 it is not a 3% discount on commission because the percentages are on different amounts depending on who is paying. When I worked it out I think it is within about 0.5%

[Elaine701]

@Mike-And-Jane0 

Sorry. It may be different in England, but it's always been 3% host, 15% guest here, regardless of who books. That's 18% using any maths. 

When you switch to "host pays commission" it's 15% (here), that's, all. That's what they charge. It may be different in England. 

[Mike-And-Jane0]

@Elaine701 

if your nightly rate is 100 then the guest pays 115 and the host gets 97 under the split fee model.

If, under the host only model, you set your rate at 115 then the fee is 17.25 so you get 97.75

the difference between 97.75 and 97 is 0.76%

Percentages are tricky little beggars as the above shows

[Elaine701]

@Mike-And-Jane0 

Well, yes, it's not much gain, but it's not a loss. And the commission is 15% (of a higher price), no matter how you slice it.  It's probably why Airbnb doesn't charge 18% in the host pay model. The numbers would probably go negative. 

Other platforms we list on charge 20% from the host. And of course VAT on top.  And they require that public prices on other platforms aren't lower than prices on their platform. So, we have to watch that advertised prices are like-for-like. 

Yet Airbnb still runs circles around them in terms of bookings, regardless of the commission or who pays it. 

If dependence on Airbnb weren't so risky, I'd probably drop all other platforms. But it's essential to reduce and/or eliminate dependence on Airbnb for obvious reasons, by nurturing listings on other platforms, even if Airbnb dramatically outperforms them. And I don't mind using the same commission model as others. It's rather inconsequential, and if anything, keeps things more consistent.