I am a host and had to cancel a reservation made yesterday due to guest declining to pay tax...

[Marita11]

Aloha,

We host a condo on Maui and had a guest reserve our unit almost 6 months in advance.  This reservation was made yesterday.  Per our listing, we will charge an additional HI accommodation and state taxes on top of the total nightly rate.  Our guest accepted the reservation, we then altered the reservation to add the taxes and the guest declined the alteration as they felt that they were "hidden fees."  As a result, we as hosts decided to cancel the guest's reservation.

We do feel that this is an extenuating circumstance and should not be penalized by AirBNB.  This is the first time we've had to cancel on a guest and our understanding is that our condo will not be available for booking  and we will incur a penalty.  We have not had any other issues from other guests regarding the additional taxes.  This seems a bit extreme for this particular case, no?  What's the best way to contact AirBNB to explain this situation and not be marked for any of the penalties?  The booking was made yesterday.

Cheers,

Marita

[Emiel1]

Hello,

Your listing states the tax is 13,45%. Airbnb says it has to be collected at check-in, or should be included in the monthly rate: https://www.airbnb.com/help/article/318/how-do-taxes-work-for-guests.

You are changing the reservation after it is confirmed. Maybe ask Airbnb what's the best thing to do in future: Airbnb Help: contact 

Best regards,Emiel

[Marita11]

@Emiel1   Aloha Emiel, thanks I was trying to reach out to AirBNB help but the link wasn't able to connect me to contacting AirBNB directly - any idea how?

[Marita11]

@Emiel1  Aloha Emiel, found the phone number.  AirBNB actually said that the way we are listing it is their recommended method.  Looks like not all guests like that!

[Matthew285]

@Marita11, I don't understand at all why the tax isn't just part of your nightly rate. It is a predictable percentage, is it not?

Are you saying that for each and every booking request you receive, you modify it and add the tax onto it, making the booking more expensive than what the guest was originally presented?

This seems crazy, and a recipe for guest dissatisfaction.

This didn't happen when we travelled to Oahu and stayed in an AirBnB there.

Is this only for Maui?

[Marita11]

@Matthew285  Yes, we alter every booking after it's made to include the additional tax and we haven't had any issues with renters until this most recent booking.  There's a very complicated short term rental tax issue in HI for the last couple of years.  As hosts and owners, we have to pay taxes to the state for our rental property but the HI legislature won't add a tax calculation on AirBNB for HI hosts to add the tax to the property.  So we either have to add the tax to the nightly rate or add on after the booking.  If you didn't get taxed on Oahu your taxes were either 1) added to the nightly rate  2) your hosts absorbed the taxes.  

You're saying as a guest you would rather pay the nightly rate + tax upfront but our original sense was that it would isolate price sensitive guests.  We know people in Maui who own/rent and do it both ways (add to nightly rate and add taxes after)...there isn't a straight forward solution until the state decides how to move forward! 

[Matthew285]

@Marita11, you can certainly run your AirBnB listing as you wish.

For myself, it just seems like you are continually running the risk of upsetting potential guests (like what just happened).

On Oahu, you say the host either "1) added to the nightly rate  2) your hosts absorbed the taxes". These two options are the exact same thing.

I know you say you are thinking of the price sensitive guests, but you aren't really saving them any money at all. They still have to pay the tax; you just aren't telling them about it until after they book. Other listings where they are up front about the cost (meaning they build the tax into their nightly price) are being more fair to people, in my opinion.

If I put up a sign that says "Rooms for $199" and someone comes in to rent a room and is told "By the way, the room is actually $213", I think they have a right to complain.

Telling them "Well, I put the lower price on the sign because I didn't want to isolate you" doesn't seem like a valid excuse.

If you put $199 up as misleading price, and your neighbor puts up $213 as an accurate price, who is actually thinking of the customer, and who is just thinking of themselves?

This is in no way an "Extenuating Circumstance". I don't think you understand what the term "Extenuating Circumstances" means. It means something "unusual or extreme".

You adding the tax after the fact is the very opposite of "unusual". In fact you say that you do it for every single booking. How does that mean that this circumstance is in any way unusual?

This is exactly what a host should expect if they try to change the price on guests every single time someone books.

[Marita11]

@Matthew120  Mahalo for your thoughts.  As we've been hosting our AirBNB we have an overwhelming feeling of constantly being on the losing end.  Many of our decisions made around our AirBNB unit have been a reaction to guests complaining one way or the other, so this trend certainly continues with our pricing as you noted.  We just can't win.  I appreciate the perspective from the other side.  

To clarify the host absorbing the taxes, I meant that the host paid the taxes on behalf of the guest to the state and didn't pass on the taxes to the guest.  We'd prefer to pass the accomodation taxes on to guest, obviously we're challenged with the best way to present it on AirBNB.

I ended up speaking with a representative from AirBNB and they said that since we have the taxes listed on the details section of the listing and given the issues with HI legislature we're actually doing what they would recommend.  So perhaps the extenuating circumstances do apply here?  Hope so.  

[Matthew285]

@Marita11, it is good you reached out to AirBnB for guidance.

I don't know why the representative said your method was the recommended method. AirBnB's own page on Taxes specifically says:

"Some hosts are required by their local regulations to charge a tax. We recommend they include the tax in the price of the reservation, but some may require the tax to be paid directly upon check-in."

So unless the Hawaii tax is required to be paid directly upon check-in, AirBnB says to include it in the price of the reservation.

(And if the tax is to be paid upon check-in, you would not add the tax the way your are doing it now, which causes the guest to pay it months in advance.)

(Here in San Francisco the Hotel Tax is even higher: 14%. It is added automatically when the guest is shown the price of their trip, so the guest sees the final amount before they confirm their booking.)

Again, you are free to do things however you want. It is your property and your listing. And if you can convince AirBnB to give you an "Extenuating Circumstance" exemption, more power to you.

Just be aware that AirBnB might get tired of giving you exemption after exemption after exemption when it becomes obvious that the guest who protested about the price change is not that unusual.

There are plenty of places to stay on Maui where they tell you the final price up front.

I checked on over 30 random other AirBnB listings around Kihei. If the way you handle the tax is the "recommended" method, then almost no one else on Maui is following AirBnB's recommendation. Only one other listings handles the tax the way you do. Everyone else either specifically says they have included the tax in their nightly rate, or does not mention it at all.

We love staying on Maui! And we hope things work out well for you!

I want to help you avoid unhappy guests (that give you poor ratings) and unnecessary cancellations (that cost you money).

[Marita11]

@Matthew285  We're definitely giving this much more thought on how we outline the rate on AirBNB.  This is the first time that we've had this kind of response and I can guarantee you that if we do it the other way, including the taxes to the nightly rate and being upfront about it, that we'll have complaints from guests as well.  Despite AirBNB's recommend taxing, as hosts we will always be losing this battle.  I'm not sure if you're also aware that there are a crazy amount of illegal rentals in HI and the proposed tax legislature also takes this into consideration.  It would be great if AirBNB took a cue from VRBO on how to handle this situation, a lot of HI hosts would be much happier.  Another lesson learned - try to stay away from AirBNB when it comes to resolutions!  

[Matthew285]

@Marita11, I know we had this discussion quite a while ago, but I saw it pop up again.

I wanted to take the chance to let you know I read more about the tax situation in Hawaii and I have a better understanding of it now.

Because of that I want to apologize for any harsh words I had for you. I understand now that AirBNB is putting you in a tough situation by not collecting the hotel tax for you automatically like they do for some other locations. (They do it for our city.)

I hope AirBnB does right by the hosts in Hawaii and solves the problem for you by adding the automatic tax collection.

[Marita11]

@Matthew285  Thank you for reaching out and your kindness.  The situation is quite unique in Hawaii and unfortunately continues as the governor recently rejected the AirBNB bill once again last month.  We hope it comes to resolution soon!  And - we were able to connect with AirBNB and they were also kind enough to eliminate the blocked week based on the renter's refusal to pay the taxes.  We also took advice from this thread and have included the tax information multiple times in our rental description and bring it up first thing when renters inquire about our unit.  Mahalo nui loa, Marita

[Fred13]

@Marita11Perhaps I can save you the time to bother with Airbnb. Your method of doings things will inevitably bring you conflict, and it did, only a matter of time. People, especially those in the western world really do not like 'nickel and diming', and are always on the lookout for any 'hidden costs', to them they initially come across as a potential 'hustle'. Of course tax is a reality. but best to use a  "X, tax included' price approach, which lets the customer know everything up front, eliminating added moves on your part.

  Also, with Airbnb especially, never cancel and then embark on a long campaign to reverse the automatic penalties imposed by them, because it will be a 50/50 situation at best, but it is a high-maintenance move every single time.

[Marita11]

@Fred13  Mahalo for your perspective - you are 100% right about the western world response and the way this sort of circumstance was approached by western customers.  It was a bit surprising to read a customer's aggressive email over what was stated in our listing.  This whole conversation has given us more to think about with adding tax to the nightly rate and 100% agree that moving forward I will not try to resolve through AirBNB.  Really seeing how as a company they work with their hosts and guests...not too impressed.

[Linda108]

@Marita11  Seems that the host forum worked as it is meant to do, that is, you received a different perspective and you are considering it.  Kudos to you.

I remember selecting a hotel in San Francisco, and once I checked in, the various room taxes that are charged in that city, significantly changed the nightly rate.  Air BNB has to have a system that works for various scenerios as some listings are bargains and some are super expensive, some areas have no room tax and some have huge room tax.

I my case I include the 10% city room tax in my nightly rate.  Admittedly I do that because it is simpler, but my rate is not high.