The Algorithm Hates Me - Guests charged a higher fee my listing than my neighbour's

[Jennifer1421]

I noticed today that the platform has increased the service fee it charges my guests from 13 to 15%

Wondering if this was a one-off, I searched my listing, and sure enough, my guests are charged a total price of $98 now, instead of $96. As I have price-matched with a nearby listing that is very comparable to what I offer, I checked that one too. Their guest fee has dropped from 13% to 10.5%. Instead of paying $96, as before, their guests now pay $94.

I contacted CS and was told that the fee varies depending on the nightly rate. I changed my nightly rate (was 75) to 70 and increased my cleaning fee (was 10) to 15. This is exactly the same pricing structure as the neighbouring listing. My guests are still being charged 98, while the 94 for the other listing has not changed. I sent CS the screenshots

The CS rep said that it was determined by the algo, and that it sometimes depended on how many views a listing was getting while someone is booking. I asked if guests were charged a higher percentage if the listing was being viewed a lot, or if the percentage was lower with lots of views. Her response was: "That depends on the system, it automatically computed by the system. We apologize for the inconvenience, we would appreciate your feedback in regard to this matter by clicking this link, <link to the feedback form>"

How are we to remain competatively priced with our competition, who offer the same value at the same price in the same neighbourhood for the same number of guests, if the platform prices our offerings differently and randomly? Why are my guests being penalized by paying a higher percentage?

Pretty annoyed by this. When I told CS that I would, indeed, provide feedback on such a discriminatory practice, she told me someone would be in touch with me shortly. I'm still waiting...

[Emiel1]

@Jennifer1421 

Your cleaning fee = 10,- and your price per night = 75,-

The Airbnb Guest Service fee: appr. 18 %

The booking form shows a consistent pricing, for example :

1 night: 75,- + 10,- + 15,-

5 nights: 375,- + 10,- + 69,-

etc..

It is unlikely the neighbour has a 13% Airbnb fee added, unless the  stay is more then 28 nights.

Best regards,

Emiel

[Jennifer1421]

@Emiel1 

Screen shot with my original 75/night, $10 cleaning fee:

Neighbour's property:

...and so I changed my pricing to match it:

Please note guests are charged $4 less to book the neighbours property ($94, instead of $98). Both used to be the same at $96. It is the difference between what our guests are being charged by the platform that I'm having an issue with. My guest's fee of 13 /85 per night = 15%; Neighbours guest's fee of 9 /85= 10.5%. My math may be sketchy ( I don't "math" well), but the difference is right in the photos. My guests pay more to Airbnb for no apparent reason.

How am I to stay competitive if the platform randomly lowers someone else's fee and raises mine? (Without taking a hit on my net, that is...)

[Tammie18]

Same thing is happening to me, and I got the same response - send feedback. I gave them lots of examples (as you did), and they gave me a lame excuse about the algorithm. I have seen a drop off in reservations due to the huge fee. Would you pay $100 in  Airbnb fees for a two night stay?

[Jennifer1421]

Have just received a response, which says "Thanks for your feedback" (in a nutshell), then links to Airbnb's anti-discrimination policy. So, that's that I guess. No explanation, no help, no fee change to level the playing field.

Torn about what to do with my pricing and would appreciate some feedback. If I leave my pricing the same, the $13 service fee looks terrible on a side by side comparison with the neighbouring comparable at $9. It also just looks weird that the platform is charging guests more to book, than I am to clean the apartment.

Do you think it would be better (as a booking guest) if my nightly price were higher, say 80 -82/night, but there's no cleaning fee? The ABB fee would still be more than the neighbouring comp, but the overall price would be the same/a touch less. Or, should I leave the base rate as it stands, so that I'm comparable in a search? I realize that we're talking about only a few dollars, but it's all about the optics...

[Emilia42]

@Jennifer1421, we will likely see guest service fees disappearing by the end of this year. Hosts will start to be charged the high fees causing prices to increase. Some hosts have already seen this trail affect their area. http://www.vhrnetwork.com/news.13

I, personally, don't think a price difference of $5-$10 is going to sway a guest one-way or the other.

I would book whichever place I perceive as 'nicer.' Why not focus on making your listing stand out in other ways other than the lowest priced.

[Jennifer1421]

Thanks @Emilia42 for the interesting link, and the helpful advice. Just so I'm clear, you wouldn't question (as a guest) why one service fee is higher than another on listings with the same price? It wouldn't put you off or make you more inclined to book the one with the lower fee?

[Emilia42]

@Jennifer1421 

Personally, me, no. If your pictures and reviews are far better than your neighbors I am not going to let a $10 difference in price decide for me. $100-$200 then yes, depending on why I am visiting, I would probably choose the cheaper listing. Why not offer a length of stay discount. Set it up so guests get a discount if they stay 3, 4, or 5 nights. I do that and it usually is a wash with the tax amount.

[Christian784]

@Jennifer1421 

I have made the same experience like you, suddenly the neighbour's offer was cheaper than mine due to less service-fees. No one could tell me, why It's like that. I did the same like you, changed my offer similar to the neighbour's and still the same resp. even worse. The service-fee remained higher.

And my situation is similar to yours. The client is deciding after the total price, when the accomodation is comparable. And 4 Euro difference means a decision against me. So I do not agree @Emilia42 .

The answer of the CS was the same, the fee is calculated somehow, but they don't know how. It's simply calculated.

Poor development, when we are not able to understand and getting no idea, where we can adopt the offer to be competitive again.

[Jess78]

Holy crap this is eye opening. And I don’t agree that a few euro won’t make a difference between bookings. It definitely will, and could explain a lot in terms of booking drop offs for hosts. Geez, can we get that nondiscrimination policy to apply to host service fees? It seem too obvious to base the service fees on a tiered percentage of a stay— is’t that just what we assume it to be?

When I think about it, Air never publishes what their service fees are, do they? Anyone remember anything in writing about their take? I could be wrong, 

[Jennifer1421]

@Jess78The published fees are "up to 20%" so I guess I should be be happy my guests are only charged 15%.

[Jess78]

@Jennifer1421  this is a brand new way to screw hosts that hadnet even occurred to me yet. Variable service fees, depending on who knows what secret formula that no one at the company is at liberty to disclose. 

[Jennifer1421]

It's frustrating, for sure, @Jess78 . It's also screwing my guests over, since they're the ones that are paying extra for no reason at all.

If you were me, what would you do around pricing? Bump the nightly rate up and drop the cleaning fee, or do nothing and cross my fingers that guests don't notice they're getting screwed over on fees when they book my place (in comparison with my neighbour)?

[Jennifer1421]

Well how about that? My fees just dropped to the original amount of $11, and the neighbouring comparable's fees are raised back to the original $11. Weird! Good, but weird. Do you suppose this was a random experiment they've been running?

I guess the take away for this is, if your bookings drop off, check the fees that guests are being charged. Random fee increases may be the culprit.