Some facts on pricing.
Airbnb is not is only paying vat/tax for hosts, income component, it is only paying tax and vat for Airbnbs income component to the government, so if they does not pay vat component which the host is liable to pay to govt, then this is responsibility of the host to pay this. Airbnb does not currently provide option to hosts within the airbnb portal to charge the vat/ Tax charge to the guests.
Also I dont understand why Airbnb are forcing hosts to charge cleaning charges on a per reservation basis , why hosts cannot charge cleaning charges on a per night basis. This in my view is not flexible, we pay to our cleaners for daily cleaning and we cannot recover these charges.
Also I dont understand why Airbnb are forcing hosts to charge management fee charges on a per reservation basis , why host cannot charge management on a per night basis.This in my view is not flexible.
I dont understand why Airbnb are forcing hosts to charge community fee charges on a per reservation basis , why hosts cannot charge community charges on a per night basis.
Airbnb is always making life of airbnb host difficult by not giving freedom to decide the way he wants to charges, the current pricing model is not good and does not have options for hosts to pass his costs to the guests.
Why dont Airbnb just add a per night fee for airbnb and let the airbnb host decide what he wants to charge for local taxes, cleaning and everything else.
No model can be sustainable when airbnb wants to charge 3% to hosts and 12% to guests. If airbnb charges 15% without taking care of host expenses. Particularly when not all markets are profitable, not all locations are proftable, not all hosts are making money. Airbnb is only making life more difficult for those hosts who are already making losses.
Perhaps Airbnb should charge every property based on the business and traffic, if a host is always 100% booked Airbnb ought to charge 15% service fee for such properties, but if there is less average bookings then Airbnb must charge less service fee. The Airbnb Service fee table charge table could be like below sample.
A property that is always,
100% booked - total service tax 15% possible, Host pays 5%, guest pays 5%, location fee charged to profitable locations only - 5% else it will be 0%
A property that is always,
80-99% booked - total service tax 13% possible, Host pays 3 %, guest pays 5%, location fee charged to profitable locations only - 5% else it will be 0%
A property that is always,
60-79% booked - total service tax 11%, Host pays 1%, guest pays 10%, location fee charged to profitable locations only - 5% else it will be 0%
A property that is always,
40-59% booked - total service tax 9%, Host pays 0%, guest pays 9%, location fee charged to profitable locations only - 5% else it will be 0%
A property that is always,
20-39% booked - total service tax 7%, Host pays 0%, guest pays 7%, location fee charged to profitable locations only - 5% else it will be 0%, location fee charged to profitable locations only - 5% else it will be 0%
A property that is always,
10-19% booked - total service tax 4%, Host pays 0%, guest pays 4%, location fee charged to profitable locations only - 5% else it will be 0%
A property that is always,
0-9% booked - total service tax 1%, Host pays 0%, guest pays 1%, location fee charged to profitable locations only - 5% else it will be 0%
So you need to helping new hosts and hosts who are less profitable to help grow the community, and thus airbnb should only charging service fee or making money only in profitable locations and to profitable properties.
Also hosts have other expenses like, how can airbnb not allow hosts to recover these costs, on a daily basis. This cannot be per reservation basis. Also how can airbnb charge service fee on our expenses, currently these fees get added to room charges.
Room rate/ Property Rate - Room rate/ Property rental/ Bank monthly interest
Utilities Fee - Electric bill/ Internet bill
Community Fee - Community cooling/ District cooling/ Air-conditioning and heating bills.
Cleaning - Daily/ monthly cleaning bills
Miscellaneous costs Shampoo/ Soaps/Breakages&Repairs / insurance
Profit/ Management fee - Host is giving his time/ he should be entitled to some fee for this time.
Local vat / local taxes come in two variations, % and fixed costs. We need to have two type of taxes
variable tax - 5% of bill to adjust vat
fixed tax - per night $20 to adjust fixed taxes to govt, which the guest should pay to host. There cannot be service airbnb charge on this.
So hosts should be allowed to charge, like below example
Room rate/ Property Rate - $100 per night
Utilities Fee - Electric bill/ Internet bill - $25 per night
Community Fee - Community cooling/ District cooling/ Air-conditioning and heating bills. - $25 per night
Cleaning - Daily/ monthly cleaning bills - $10 per night
Miscellaneous costs Shampoo/ Soaps/Insurance - $10
Profit/ Management fee - Host is giving his time/ he should be entitled to some fee for this time. $20
variable tax - 5% per night vat
fixed tax - $20 per night
The guest should pay for all this breakup to host so he can evalaute all cost breakups. There shouldnot be service airbnb service charge on everything. Service charge can only be on profit or room rate bit not on costs of the hosts. like there cannot be service tax on govt tax and cleaning and miscellaneous costs , utility and community costs/ bills
So based on above example service tax can only be on the below components. not all other components, as they are costs of the host.
Room rate/ Property Rate - $100 per night
Profit/ Management fee - Host is giving his time/ he should be entitled to some fee for this time. $20
For long term sustainablilty of business Airbnb need to take a hit to allow sustainability for hosts. Any business that makes 15% as brokerage which is what airbnb is charging is not sustainable.
Even the 15% charged by airbnb to guests and hosts is too expensive and not conducive to any workable model. Airbnb is literally killing those who are already making losses. The home rental business model was meant to give cheap home solutions/ alternatives to hotels, currently hotels are less expensive despite their overheads due to high service charge by airbnb.