Hi All Hosts
I just found this new fee structure that Airbnb posted. Simplified fee of 15% or Split-Fee pricing that totals to 17.2% cost increase to guest. Yet net zero to host. So do we all have to change our pricing to accommodate the Simplified Pricing?
Disscussion, comments, suggestions, thoughts?
@M199 This has already been rolled out in some areas to some hosts who use channel managers awhile ago. Was this something you suddenly see on your hosting settings?
The split fee option is more or less what it has always been- guests pay 3%, guests pay 14%.
If the host pays the whole service fee, of course you'd have to raise your price to cover it.
My question with this, for which I've never seen an answer, is- what happens with cancellations? As it stands now, if a guest cancels after 48 hours, they don't get the service fee back and hosts aren't charged the 3%. If the host is paying the entire service fee, and a guest cancels, the host loses 15%?
Thank you, I value experienced opinions . Yes, this was new to myself. I have already been in touch with another local host who was totally unaware and we are now just trying to justify/understand the market impacts, along with a local municipal accommodation tax for 2022 of 4%.
Being a discussion board, we are reaching out to other hosts for their insights and opinions.
Well of course Airbnb are going to hope that you will see this as a great initiative that will increase the number of bookings you get, which should offset that 12% hit you are going to have to take on every night you host from that point, and they hope you will not increase your listing amount!
If you can afford to take a 12% pay cut, good on you......most hosts can't! It's not just the 12% for the service fee, couple that with the 15% length of stay discount you are encouraged to give and you could be almost 30% out of pocket! Very few hosts can afford that, they don't make that much!
To the host who maybe has 3 or 4 bookings a month for a bit of extra money on the side and doesn't use Airbnb in a professional sense they might consider this a good deal. But if you already have a moderately full calendar you will of course increase your price to offset the loss of revenue and in all probability your attractiveness to potential guests will decrease along with your bookings.
It's a strong bet Airbnb will promote on their search pages hosts who opt for the 'no service fees' option because it makes them look like the good guys.....it makes them look like they are doing something for nothing, while at the same time making hosts look like they are asking exorbitant amounts for their properties.
And as @Sarah977 says, the cancellation issue is going to be a minefield for hosts!
Once again the only winners here are Airbnb!
@M199 @Robin4 It is going to be a huge mess to have some hosts on one fee structure, and some on another, because as we know, most guests don't read thoroughly and some listings will look far more expensive than others, when in fact, they aren't.
It's insane- a booking platform either needs to have the service fees split, or not, across the board- all listings showing the pricing in the same way.
As I've done with vrbo, I'd simply raise the price to compensate. The guest would pay the same price anyway. Or a bit more.
I do hope Airbnb doesn't just change it without giving me any choice or informing me in advance.
And yes, it seems the host would bear all the consequence for guest cancellations. The host would have to eat the 15% if the guest cancels. So, I'd expect many hosts to "upgrade" to "strict" cancellation policy.
@Elaine701 Of course I would raise my price to compensate, and as you say, the guest ends up paying the same price in the end, but most guests wouldn't realize that unless they looked at listings with and without the service fee included and saw the total on the ones where it's added at booking.
So listings with the fee included are going to look more expensive in search than they really are.
I'm not so sure about that.
When I search Mallorca and find our listing for any given date and number of persons (just browsing, not booking) the price tag given seems to be our price + tourist tax + Airbnb commission. That seems to be the price tag shown, not our asking price.
So, I'm not sure if changing the commission structure would affect that, other than to make the price tag lower for any host who failed to raise their prices to compensate for the lion's share of the commission now being taken from the host, instead of the guest.
My concern is if Airbnb unilaterally decided that's the plan now, without directly advising us individually. All they'd need to do is broadcast a message saying they've updated their terms and conditions. It's not their fault if anyone failed to read it, or missed the part about the changing commission structure.
I suspect (hope) they wouldn't do that, but it's not exactly unthinkable.
I can already see CS responding... by simply sending a link to the new commission policy. Thanks for being a superhost. You're really great! Case closed. Move along now.
The only downside of this that I can see is that it will drive some hosts over the VAT threshold because their revenues before costs are increased by 14ish percent.
Other than that hosts adjust their prices and move on with strict cancellation policies so that guests have skin in the game and are not encouraged to cancel at zero cost.
@M199 I haven't seen it yet! I will opt in once it appears because I think it's not only inevitable but good for guests. My prices already appear higher than most of my competitors and I still get booked. But I do get the occasional message from a potential guest that "with fees" it's too much. So I think guests don't always flinch at a high listing price but do back down once fees are added in.
The downside is that state occupancy tax is calculated on nightly+cleaning+Airbnb service fees, so taking the Airbnb service fee out of the calculation means that states' revenue will be reduced. Why is this a downside? Because states will raise their tax rates. Maine is already agitating to do so, undoubtedly because they've gotten wind of Airbnb's plan to go to a host-only fee.
Saw this about a week ago.
"Is that Airbnb too expensive? CEO plans ‘systematic update on pricing’ as travel recovers"
My personal take on it is that guest are posting on social media that the fees are sometimes higher than the nightly rate. On one hand I think adding fees was the click bait approach, and ABB responding to negative publicity from guest, and maybe moving away from click bait.
Also ABB started refunding their service fee according to cancelation policy almost a year ago. If host has moderate cancelation policy guest gets full refund including service fee up until 5 days before cancelation.
But agree it should all be one policy. I like ABB collecting and paying the local taxes. One less thing I have to do. I'll bet they will still take that out of host payout and pay local taxes. Its an incentive for local governments not to enforce local restrictions because its a revenue income. All about that cash flow.