New Service Fee Included Option charges 17.36%

[Rex27]

I just got the feature option on my account that offered to show prices to guests that already include the service fees. The wording and comparison of current service fees to new service fees said that in the old model, hosts pay 3%, and guests are charged a fee of up to 20%. In the new model, guests arent charged any service fees, and hosts agree to pay 14%. I gave it a try, and both bookins were charged 17.36%. I sent the matter to Airbnb help, and was not given any reasonable response. See below for service fee page.

BEWARE of the new service fee model, they will charge a hidden 3.36% just for fuqs-sake

[David-and-Fiona0]

Thanks for the heads up. I hope this isn't a precursor to them doing this unilaterally anyway  

[Sarah977]

This sound like they are punishing hosts for wanting guests to see the full price (aka transparency). The platform doesn't want them to. That's what I figure. But they figured they could add a bunch more $ to their coffers by doing this.

Honestly, they're going nuts there at corporate with one stupid, anti-host idea after another. They need an intervention.

[Sandra126]

THanks, wasn't aware. My guests pay 20%, plus my bit. If we paid 17% together, I would be happy as the total price would drop but it doesn't seem that this is the case? Or did I misunderstand?

[Sarah977]

@Rex27 I just checked my account and that's not on there, at least not yet. You must be one of the lucky guinea pigs. 

But thanks for heads up- I'll keep checking to make sure they haven't slipped it in.

[Christabel-and-Rita0]

be carefull with this new option. If we start paying 14% to remove the service charge, in order to make up the same profit as before we would have to increase the nighly fee. Do not forget that you also have to pay the national VAT on the total price. So increasing the nighly fee means you have also to pay more VAT (for those countries that have VAT system)

[Branka-and-Silvia0]

@Rex27@Sarah977@Sandra126@David-and-Fiona0

it seems they target professional property managers

https://thepointsguy.com/news/airbnb-considers-getting-rid-of-guest-fees/

[Sonia210]

Thanks for the link. Very informative.

In my area, I have seen 1 listing where it states "No service fee. (Host name) will cover the service fees for their guests." And the host is indeed a professional property manager with multiple listings in one building. His nightly price came out to $70 per night. I do not know his original price so I couldn't compare the difference, but in our area, the average nightly price is about $50-58.

[Mark116]

This would only work if it's the same for everyone, otherwise, if a host chooses to do this, the listings that don't are going to appear 15-20% cheaper, and once a person has decided, they will probably go ahead and pay the extra 20%.....so, this transparency as a "choice" is harmful unless I have misunderstood something?

[Ben551]

Ran the numbers on this today (wife has an Excel model) and... we now want this feature.

Search results only go on Base Price and Total Cost, which means we're unaffected by the change in search results.  We'll add to our listing title "No Service Fees!" to catch people's eye... Wheelhouse will adapt to the increase in prices automatically to account for the extra fees, through an "aggressive" pricing strategy (as opposed to increasing the base price), which will protect us in search results...

.. yeah, we're going to keep an open mind on this one.  The maths isn't terrible.

[Sandra126]

@Ben551,  I will not do that, instead I will tell guests the service fee exist as normal on ALL listings, even the ones who say they haven't as it is now baked into the pie.

[Ben551]

@Sandra126  you have a point there.  It would be misleading to say "no service fees" because ultimately they are included somewhere.  Perhaps "all inclusive daily rate, no extra service fees" - which may be clearer.  Even if the prices work out the same, I think people might go for this type of pricing in New Zealand... particularly our local customers who like this style of approach.  This is entirely human behaviour driven, there is no logic at play here...

[Sarah977]

This makes no sense to me at all. If hosts go for this, they will have to up their per night charge to cover the additional fees. So their listing will look much more expensive to perusing guests than listings which aren't using this. I assume Airbnb would put something on the guest's end to indicate that this is the actual price and there will be no added service fees. But then it still will come up as more for the guest depending on whether they are booking dates where prices are higher, or whether they are adding guests. And even if they do make it fairly obvious that there are no added service fees on a particular lisitng, we all know how many guests don't read and manage to miss stuff that's right in front of their eyes. 

[Ben551]

@Sarah977  that's not quite true in terms of base price if you're using an intelligent pricing engine.  Using Wheelhouse, I can leave my base price just as it is (for search term purposes) but change my pricing strategy to "aggressive" which changes each individual daily price, every day, to match market conditions and incorporate any additional service fees.  My underlying pricing strategy doesn't impact my base price, that's just how it works...

I think it depends on where you live and the market you are competing in.  I can see this type of pricing working really well in New Zealand, where people prefer to see "all inclusive" all the time, even if it means prices are higher when they enter specific dates (as you said).  Perhaps it's a cultural thing, but I'm quite open to this for our market here.  I'm not a great supporter of pricing in one way for the entire planet... we're all different after all... I'm willing to give this a go and see.

[Sandra126]

But it might be a move towards a new model? I much prefer to see the split upfront, but also want guests to ultimately pay less... We may not have a choice in the end.