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

[Ann72]

Aha!  So that's why they keep wanting us to lower rates!  Aside from the idea* that lower rates attract more bookings, I always thought Airbnb was shooting themselves in the foot, because the higher the rate, the more Airbnb would take in.

*As to this idea - I'm not convinced and never will be.

[Gerry-And-Rashid0]

@Rex27

It;s moving towards the Booking.Com BDC model - hosts are charged, not the guests.

[Rex27]

I actually prefer it that way, but I dont like stealing, lies, and inadequate support. 

[Branka-and-Silvia0]

 In Croatia, we have to pay 25% VAT on Airbnb host fee + another tax on the gross amount  (before host fee deduction), so if I would pay guest service fee then my guests would have to pay more then now.

Low host fee is a big plus for us and the main reason we list on Airbnb and not on Booking.com. for example to earn the same amount my price on Airbnb is 35€ and on Booking.com is 50€. It 's almost 50% higher.

[Ben551]

@Branka-and-Silvia0. That's exactly why they need to retain current pricing as an option for those markets where it works better. I've not seen anything saying they are taking current pricing away, so you should be fine after the new option appears. It might not even apply in your area for that very reason, they do tend to roll changes out in a region specific manner.

[Anita19]

I fully agree with Branka and Silvie. We have a similar situation in the Czech Republic.

[Branka-and-Silvia0]

@Ben551

it depends not just of a region, but also of the type of host.

For example in Croatia, we are a small hosts who earns up to xx € / year and pays a fixed amount of tax PER BED, not per earning. It means our expenses are not deducted. As I sad, we also pay VAT on Airbnb host fee + another tax on gross income so our prices would go up.

But...

some hosts are registered as a company. They pay taxes and VAT on the earning, their expenses and VAT are a deduction. So they could pay guest fees and VAT on it, and then deduct it from their gross earnings.

So it seems this is another step towards professional property managers.

I hope we will have a choice to choose

[Helen427]

@Ben0

Welcome to CC

If you look at the listings as a Guest you will see in New Zealand that Airbnb give a total price when viewing listings.

This was introduced late last year I believe as a result of something to do with The Fair Trading Act/ perhaps Commerce Commission.

If you look up Airbnb in News on G o o g l e you should be able to find the media release about it.

All there best

[Rex27]

My account has not been refunded, but I am seeing some bookings go through at 14% as promised. Maybe it was a forgottten bit of code that charged everyone extra. They should really refund everyone that was overcharged, and to be fair, throw in a little extra fort the trouble. 

[Ben551]

@Helen427 thanks Helen. I don’t see any news articles covering that change,  but I do know AirBnb rolled it out all over the world in different countries at the same time, not just NZ. The option was originally coded by AirBnb because of EU regulations, NZ just got in on the racket.

It still doesn’t satisfy my customers though, they don’t like the breakdown showing a service fee, hence I’m keen on an option to blend it away entirely. I actually can’t wait to get my hands on this pricing option and am checking every day like a kid waiting for Christmas...

[Lilly28]

@Ben551

Could you, please Ben - explain the new proposal as I cannot see any difference besides that the guest is going to see higher prices? So he - as guest is going to pay the same, I - as a host am going to receive the same, but when searching guests are going to see higher prices? 

Well, I find this against a good marketing strategy - looking that prices are even higher than booking.com - nobody will be willing to LOOK at Airbnb! Yes, it is a trick, but still - I would rather prefer the price to be seen as a whole unit in search, but the service fee to be equally paid between guests and hosts. Except for business property menagers with many listings, they should pay the whole service fee  because as Blanka said they deduct their expenses from the amount due for taxation!

[Ben551]

@Lilly28 I suggest taking another look at the posts I have made in this thread, starting with this one (which includes a picture of the current pricing problem)...

https://community.withairbnb.com/t5/Hosting/New-Service-Fee-Included-Option-charges-17-36/m-p/920811...

[Rex27]

Update: I did recieve a call from Airbnb and they offered me more than twice what they owed me. They more than made up for the 3.36% extra that was initially charged. I appreciate that they reached out.

[Ben551]

Hey that’s great news @Rex27 ! Great outcome for you.

[Cor3]

Hi All,

I just recently learned about this new idea of Airbnb.

And it can even very well be, they are piloting this. Also because of the current pressure by the EU and other countries (The total guest price should be displayed upfront).

So I made a small calculation model, based on this.

As we also have to pay VAT & Taxes on ‘our’ gross rental amount.

To keep it ‘clean’, I’ve removed any additional charges such as VAT, Currency conversion rates, Etc. from my model (Related to the guests service fees). Because you can count on it. Airbnb will still add these on top of the new model (they won’t pay a dime themselves).

Most likely this is causing the 17.36%, as mentioned in the title if this thread.

So currently 12% (educated/calculated guess) guest services fees (without the additional charges, mentioned above).

Me paying 3% host services fees (For me: VAT does not apply to host service fees).

I have to pay 6% VAT, on my gross rental income. The remainder is then taxed at 8.75% (IRS).

So in the current situation, the guest would pay 112% of my gross rental price.

And I would be left with 82,775% of my gross rental price – as my net rental income (after deduction of taxes and Airbnb service fees).

In order to achieve the same net rental income, in the new situation (14% total service fees). I would have to raise the guest price with close to 3%. And Airbnb would gain over a staggering 7.6% on their service fee income!

The rest will end up in the pockets of the taxman (gaining another staggering 15.3%)

Now I understand, why the new option states: Recommended!

Thanks, But no thanks.

I thought all these wiz-kids at Airbnb HQ, had a master degree in mathematics?