Increases in Airbnb service fees to guests: a price elasticity issue for hosts.

Status changed to: Archived

Hello All.

 

I wanted to share some information I recently received from Airbnb about their increases in service fees. I decided to find out what the guest was actually paying for my accommodation as this is not immediately apparent on the Host platform. I went in to the Airbnb site with an incognito tab and discovered that Airbnb was adding on a 14 to 15%% service fee. I was a bit surprised as they advertised that they charged between 5% and 12% (sometimes starting at 6%). I then went in and looked at a wide range of scenarios - different guest numbers, different days, and so on. In every case the service fee was well above the advertised maximum of 12%.

 

I had not received any notification from Airbnb that they had increased their service fees to guests, so I decided to ring them and ask about it. I felt that this was important information to inform my price settings. The customer service representative first re-stated the advertised service fee of 5% to 12%, but when I told them that mine was well above that rate, consistently, they confirmed that Airbnb had put up their service fees in August 2017 and told me they were receiving feedback about the issue and were reviewing the policy. I have been monitoring this forum and have never seen another comment about this. I invite you all to check how much Airbnb is charging from your guests so you can see clearly what is going on. This can only be done via an incognito tab, or to ask the guests directly which I have also started doing.

 

I have a few points I would like to communicate to Airbnb. Perhaps if any of you are experiencing the same issue we could come together to ask for further clarification.

 

  1. Why did Airbnb not inform me about this significant increase? Price setting is a fundamental aspect of managing my small business.
  2. Why does Airbnb documentation still state 5% to 12%, when my customers are being charged well over this amount, on every booking?
  3. What proportion of guests are being charged at the low end of the advertised service fee - say 6%? What circumstances trigger a low service fee?
  4. Is Airbnb preparing to float the company, and therefore needs to show a greater level of profit?
  5. Is there a risk that hosts, who own the actual assets, pay for the human resources involved, and all associated costs (aside from marketing) may feel the Airbnb platform no longer represents good value for money? Price elasticity is just as important to hosts as guests.
  6. Is this leaving the market open to another major operator who feels they can offer a similar service for much less? Airbnb has already prepared the market with a huge number of enthusiastic hosts with a great deal of experience, all looking to increase their own profitability. It would seem careless to hand them over to another company willing to offer more for less. Why not take great care to preserve brand loyalty from Hosts?
  7. Does Airbnb recognise that, in the past, the brand has been associated with the "feel-good-factor" with ideas of community and sharing. When that community is faced with behaviours that may be associated with corporate greed, positive perceptions could change in a flash. We know from elections around the world that the global community is fatiguing of actions of corporate greed.

Over to you hosts. In case we don't get an answer from Airbnb, we might have a go at informing each other. What's happening in your world?

 

Susan

Comments
Cathy-and-Ed0 in
Las Vegas, NV
Level 5

I agree with much of what has been said here.  Higher fee's and making Instant Book the only search tool are 2 very bad moves.  Hope they get it together before it all falls apart.  Guess they can go with all the Hotel's on Instant Book.

Good Luck to everyone.  I don't think they will change their mindset. Too bad!

Susan598 in
Urrbrae, Australia
Level 5

Has anyone rung Airbnb to question the silent increases in fees? That is the most effective way to inform Airbnb that this matters. 

Laura1221 in
New York, United States
Level 2

I am very disapointed at airbnb right now.  They better get it togther   

Cathy65 in
Bloomington, IN
Level 10

Thank you, Susan!  

Corporate greed run amuk, is what we are now seeing from ABB.

They have glutted the market by aggressively recruiting hosts.  I was a fully-booked Superhost, now reservations have fallen off a cliff,  and it's obvious why:

 

1) a glut of hosts, including a bunch of newbies who blindly follow the low-ball "price tips;"

 

2) aggressive downward pressure on rates, so ABB can boast a lot of bookings, with rising fees for them;

 

3) guests getting fed up with higher fees, plus taxes, and going elsewhere.

 

ABB is going to end up killing the goose that laid golden eggs for them -- high quality, hard-working hosts. 

Melinda6 in
Sydney, Australia
Level 2

15% - Sydney Australia.  While they constantly recommend me to lower my prices by $160+ per night. (To compensate for their price rise) 

Bluewater-Vacation-Homes0 in
San Diego, CA
Level 2

This just occured with us. A guest brought up the difference in fees, and when we recreated the situation with a private browser, we found for the same property and same dates a difference in $220. I escalated this with airbnb- it is definitely fishy and dishonest as they advertise the service fee being a % of the total, but had no excuse for why the same total would have different service fees.Ocean Palms- non private.JPGOcean Palms private window (002).JPG

Susan598 in
Urrbrae, Australia
Level 5

Yes, this is definitely the case. For me the really curious thing is that hosts do not seem too concerned about it. If hosts don't register a complaint like you have, it will only increase over time. Thanks for being someone of action!

Bluewater-Vacation-Homes0 in
San Diego, CA
Level 2

Of course! As a host of many properties and a management company, we don't want our guests feeling or questioning our honesty with rates.

 

They refunded my guest the difference in fees, and said it was a "mistake in the system", but I sent the link to this thread saying its been an issue before. Definitely encourage everyone to bring this up to them. Less people wanting to use Airbnb because of things like this = fewer guests and income to hosts. 

Paul60 in
Dublin, Ireland
Level 2

Hi all,

All this talk about 'community' is total rubbish.  Airbnb are big corporation at this stage and one I admit are very very gready.  They are always biased towards the guest and often are quite willing to gift the gift the hosts money at any opportunity.  

 

Take the extenuating cancelation policy for example.  If the guests planes are cancelled due to weather the guest gets refunded 100% while the host takes the full hit.  Is this fair.

 

Oh and does Airbnb refund its share of its fee in this instances?  .... of course not !!

 

Paul

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