Airbnb fees to hosts - might they change soon?

[Annette33]

 Right now, hosts (in the US) just have something like 3% subtracted from their payout as their Airbnb fees. That gets us plenty of bookings, support from Airbnb (even though it could be better), basically no financial dealings with guests, and access to the community here! If I were in business myself, just running a credit card would cost me close to 3% . Also, the marketing necessary to get me customers , then build up a credible and trustworthy platform, would consume lots of $$ and time. So I recognize that as a host I am getting a great deal from Airbnb! 
I consider all this almost too good to be true and think it might change fairly soon: guests look at the base price per lodging, but then often enough a cleaning fee gets added, then taxes, which in many cases Airbnb adds and collects on behalf of the host, and finally the 10-15% Airbnb charges to guests as their fees, so the final cost to the guest can easily be 30% higher than the listed nightly price of a property.
Gone are the days where Airbnb listings were dirt cheap, never charged taxes, and you could really get a great deal. Sooner or later, guests will wake up and realize that for hotel bookings they never pay an extra cleaning fee, nor a service charge, and often enough they can score special deals.
As Airbnb is actively morphing itself into a major booking site, perhaps the biggest one out there, comparison is inevitable: So I am afraid that Airbnb itself might sooner than later shift the burden of booking fees away from the guest and simply pile it onto the host. Airbnb hosts who are renting their properties through other outlest always pay more than 3% to them, right? Airbnb might just follow suit sooner than later, and I can't say I'd blame them. Any thoughts on this out there?

[Mark26]

I'm not sure I'm following....   Which fee from the guests perspective are you looking at?  The booking fees other platforms charge guests are about the same as the fees from AirBnB.  I'm frequently astonished to see the premium a guest has paid to another platform to book a four week stay.  It's the same percentage as a guest would pay for a three night stay.... but that number is HUGE.   And every time I see that dollar amount I realize that someone was happy to pay it...  and I'm probably not charging enough.

[Annette33]

@Mark26 , I was purely looking at the service fee Airbnb charges to guests, which other companies don't. and I was just wondering if that might undergo some changes in the future. not talking about the overall booking fee which on every site includes accomodation and taxes - but talking about that Airbnb's tally adds service fee to the guests and sometimes a cleaning fee as stipulated by some hosts. so that makes them different, and I was thinking that guests might start paying attention to that...... not  talking about how we as hosts would compensate for a change in case it was going to happen. 

[Mark26]

I'm not sure that we're using the same terms or talking about the same fees BUT...

If we ignore things like "Cleaning Fees" and "Sales and Use Taxes" or "Transient Occupancy Taxes" and just look at the fees that guests and hosts are charged by different marketing platforms I think it might help to simplify things. That Cleaning Fee is yours to add or not... your choice.  Sales Tax, or Transient Occupancy Tax is not an option...  The guest has to pay it, and you are obligated to collect and forward it to tha appropriate agencies.  AirBnB has begun their own unique "We'll collect and forward the tax so you can remain an anonymous business owner" approach to those taxes, but the guest still pays them.

AirBnB and three other Marketing Platforms that I use have essentially the same fee structure...   And we might want to look at it from an easy to work with figure of $100 per night.  Whether a guest comes to us through AirBnB, or anywhere else, you're looking for $100 per night.

When a guest books a night on AirBnB they pay that $100

They also pay a "Booking Fee" to AirBnB, which is their fee for bringing the guest and the host together.  Most services are at about 13%  So, the guest is paying $113 for that night.

AirBnB and other services take about 3% from the host...  So they take $3 from that $100, and send the host $97

Maybe you advertise on Craigslist (Someplace I'll never advertise my rentals on again... ) or some other service or platform that lets  guests book directly with you.  Guests pay you $100 (Plus appropriate Tax, and perhaps your Cleaning Fee)  The bottom line is, you're ahead by $3 and the guest saved $13   But... those guests who book directly are few and far between.   Guests appreciate the ability to see a wide variety of offerings all in one place.  Their search is a lot easier, and they trust AirBnB, so they're willing to pay that "Booking Fee"   Conversely I appreciate the ease of booking through AirBnB, and the fact that they act as a middle-man... guaranteeing payment, and backing up my cancellation policy.

The "Booking Fees" that guests are willing to pay to AirBnB and others only reaffirms that guests see a greater overall value in what I have to offer than I'm actually being paid.  It tells me that I can charge my guests more when they book directly with me...

If AirBnB or the other marketing platforms I use started to charge me a higher percentage on each booking, I'd simply raise my rates to make up for it.  If they decide to charge me 10% instead of 3%, I'd adjust my rates to $110 or $115 on that hypothetical $100 per night listing.  They charge me more... I see the same dollar amount.  If it means less bookings, I'd aggressively persue additional marketing platforms.

If guests want to pay less, there's always that broken-down Motor-home parked on the side of someone's house across the river.  More power to 'em.   I hear "Tiny Homes" are really in.

[Annette33]

@Mark26 , I appreciate your long response, we are just not talking about the same thing, I was pursuing a completely different, much simpler angle, sorry if that wasn't clear enough. much better if we could meet in person and brainstorm on this. Thanks for all your responses!

[Branka-and-Silvia0]

@Annette33 if Airbnb wants to keep the lowest prices on the market than they shouldn't increase service fee for the hosts and here is why:

in Croatia any host has to pay  25% taxes on the service fee (among other taxes.  We are the country with probably the highest taxes in the world.)

For example, if I want to get 100€  then:

my price on ABB (my gross earning) will be 103 € -  ABB service fee 3€  and my tax will be: 25% of 3€ = 0,75€

but, my price on Booking.com (my gross earning) will be 118 € -  Booking service fee 18€ and my tax will be 25% of 18€ = 4,5 €

It is 3,75 € more tax on every 100€ I receive!

To cover the loss I have to add it on my Booking.com price, and as a result my guest would pay about 4% more on Booking.com than on Airbnb

But, that is not all....

If my yearly GROSS earning (before service fee deduction) exceed certain amount than I can not pay flat tax per bed any more. I have to do bookkeeping and it is A LOOOT more work, time and effort and higher taxes. (paperwork in Croatia is unbelivable, trust me). So my prices will go up even more.

That's why we use Airbnb and not Booking.com or any other site where host service fee is higher.

[Zacharias0]

Not sure why AirBnB would roll a fee increase onto the hosts when we are doing 90% of the work to keeping their company in business. Literally. Its a symbiotic relationship.  An increase in host fee would only make sense once they've reached a saturation point, which they haven't. AirBnBs business model is unique as their costs don't increase the more units they have. They will just have to hire maybe one more office representative per 100 new hosts, but that is pennies to the amount those 100 host generate in fees for the company.

AirBnB is the biggest booking site of its kind ahead of homeway.com, but not even in the top 10 of travel booking sites. They are only number 15 out of 33 as of a 2014 report. You increase your fees when youre highly sought after, not when you're middle of the road. They lose hosts because of fee increases, they lose money and they go further down the list. Starbucks charges more every year, because they can and their overhead is high.  The benefit of what we do is that we can be in places that large hotels can't be. Our overhead is low and our guest satisfaction is high.

Yes, the guests rate may be higher than advertised, but if you've ever booked a plane ticket or a hotel stay in a tourist destination you factor those fees into the cost of a vacation. If you've never heard of resort fees and seen the parking fees PER DAY in major resort towns in CA and in FL I suggest you take a look. Our listings may not be as "dirt cheap" as they were before, but you can blame that on the government and tourism agencies wanting their take.

Lastly, cleaning fees, if reasonable, are expected. Time is money and no one works for free last time I checked. I see some cleaning fees going upwards of $300. Im not sure how any host can justify that rate, but if that is what it takes to get the job done right then at least the guest is informed ahead of time.