Varying Service Fees being charged for identical properties & rates

[Amy792]

Has anyone discovered their listing is being charged more in service fees than that of a neighbor for same exact rental dates?

I was doing some pricing research to see what my neighbors are charging, so did a specific search for my condo building (zoomed in on location). Noticed my neigbor in my condo building with same floorplan as me (# rooms & baths, end unit,  same floor, etc...) was charging just $2 more per night than me, but his total price was less than mine. Clicked on his listing and then mine to see price breakdown for each of our units and found the service fee on my listing is about $50 more than his! 

I called Airbnb to inquire and was told there is an algorithm applied and the rates can vary from 11-15%? How can this even be legal? Airbnb is SO against any form of discrimination, but I feel this is a discriminating practice!

Thoughts appreciated!

Amy

[Ian-And-Anne-Marie0]

@Amy792 Do you both include cleaning fees or not?

If cleaning is added to night rate then no commission is charged on it.

If cleaning is included in night rate then commission is added on the cleaning fee.

Might that have a bearing?

[Amy792]

@Ian-And-Anne-Marie0 

Cleaning fee is separate as is our neighbor's.

My husband thinks Airbnb's computer algorithm might assign what appears to be a "more popular" rental property a higher service fee % based on its rental numbers. Although, it isn't a good measure of popularity as it doesn't track properties listed on other platforms. As I mentioned earlier, my neighbor rents his out a lot on VRBO. It is just disappointing as it puts us at a disadvantage, since overall, our property is more expensive for a prospective guest.

Wish someone at Airbnb could actually answer these questions! 

[Ian-And-Anne-Marie0]

@Amy792 

Wish someone at Airbnb could actually answer these questions! 

This and other things. Why does it always appear to be a fight!? Simple transparency would be the best policy.

[Suzanne302]

@Amy792 

Wow! This is interesting. Sorry I don't have anything to add right now, but I'm going to do some price comparisons for my area now. I usually use an incognito window to check other listings just to monitor nightly prices, but I've never taken notice of service fees1

[Suzanne302]

@Amy792 

So I just did a few searches/comparisons. Based on a very small number, the trend seems to be the newer properties have a lower service fee than those with a solid amount of reviews. I have 50+ reviews and my listing has a 15% service fee.

Several other properties with less than 10 reviews, have an 11% service fee. This only amounts to a a difference of a few dollars. Do you have any idea what the percentage is on the listings you compared?

[Amy792]

@Suzanne302 

Thanks for your input!

I just looked up three other properties in my building to check their service rates. Our condo building is pretty new. My unit is only listed on Airbnb while all others also use VRBO.

1 ) Mine (3 bed 2 ba), 26 reviews, .1488 service rate

2) (3 bed 2 ba), 18 reviews, .1087 service rate

3) (4 bed 3 ba), 12 reviews, .1488 service rate

4) (2 bed 2 ba), 16 reviews, .1088

Anyway, I don't know what indicators are used to determine the rate, but I don't think it is a fair practice!  My husband says it is a usage fee and maybe the more you use it, the higher rate they charge. But if you look at the airline industry...there are benefits to being a frequent user/flyer. Can you imagine being a regular at your local hamburger joint and being charged more for your hamburger because you come in twice a week? It would never fly!! 

I think this practice could drive hosts to pursue other avenues to rent their places. Regardless, I feel that our building of like properties, should be charged one rate (whether it's 11, 12, or 15 %) and stick with it. Otherwise, it seems like Airbnb is helping to pick winners and losers. 😞

[Alon1]

@Suzanne302 @Amy792 

Suzanne,

Please note my contribution a few days ago.

4 rooms in the same house. (I would add all listed for over 5 years).

Yet for identical dates, rent & cleaning fee, DIFFERENT SERVICE FEE (in the case of 2 rooms)

and same service fee in the case of two other rooms.

Lastly, it doesn't seem the number of reviews affects this issue.

[Helen350]

I've noticed that my service fee has increased from £3 to £4 recently. I have not increased my listing price.

[Ben551]

Oh right, you’re trying to work out the variable service fee thing?

Yeah it’s linked to SEO placement, near as I can tell. If my listing is (say) in rank position 10, I get charged more service fee than someone in rank position 20. It’s the same or similar algorithm.

I assume it’s because it operates like an advertisement fee. You pay more to be in the front page of the classifieds than you do on page 20 amongst the Obits.

I noticed this at some point when I was doing my SEO research. I remember thinking “heh, makes sense” and didn’t think much more of it. Actually, I thought it was fair in the same way a classifieds system would work. If you want to sell on page #1... you gotta pay more to be there.

[Alon1]

@Ben551 

Thank you.

[Alon1]

@Ben551 

ps. The only thing is we don't chose re. advertisement. Airbnb does.

So it seems to choses to promote one of the rooms in my home over and above the other and charges more service fee. 

[Ben551]

@Alon1  yes, but if you understand the SEO science behind “why” a listing gets to be on page #1, it does make some sense.

By being on page 1 you will have higher occupancy, therefore far higher earnings than (say) the listings buried on page 20. Why should the listings on page 20 pay the same service fee as those on page 1, when they don’t get such preferential treatment or high turnover?

This kind of math is hard to understand at face value, but at its heart it means there is a self regulating market through variable supply and demand. Without this variable, the listings on page 1 would be fixed. They would become... the landed gentry of Airbnb society!  Permanent listing royalty. The listings on page 20 would never have a shot at climbing up that ladder... at bettering their position or... knocking those royals out of the prime SEO real estate. Trust me when I tell you, you don’t want this alternative... the current system ensures the high earners are taxed appropriately...

I hope this makes better sense...

[Alon1]

@Ben551 

I don't understand the 'science'... but you're doing a good job of explaining it!

However, I have also noticed - hard to ignore - that Airbnb price tips comparison emails invite me to compare with 'other listings' in my area. Strange as it seems some of the 'other listings' are in fact my own! In other words, the computer doesn't recognize listings as rooms in the same home.

I find it quite funny when computer  invites me to lower my rates based on a booking I recently take in which I may have lowered my price for a day or so. 

I constantly concertina prices up and down. It feels like I practise as much as a concert pianist.

[Ben551]

@Alon1 Yeah it’s best to avoid reading price tips lol. I have long since decided that the coding for them was written by a one eyed, brain damaged, illiterate swamp thing that eats socks for breakfast...

[Ian-And-Anne-Marie0]

@Amy792 

 I do not agree with this practice as it punishes me for having more bookings/reviews. My neighbor also lists his property elsewhere, whereas, I do not. Hmmm....still seems discriminitory, in my opinion!

@Ben551 

Yeah it’s linked to SEO placement, near as I can tell. If my listing is (say) in rank position 10, I get charged more service fee than someone in rank position 20. It’s the same or similar algorithm.

Which comes first? Does popularity and good reviews just result in good rank placement?

It would make sense for ABB to promote accomodations which in it's eyes are providing good service and which for their input into promoting such (by way of placement) can determine higher service fees. In @Amy792 case that would work regarding her same condo competitors using other agents thus, diluting ABB bookings, thus making @Amy792 more 'popular' and thus deriving higher fees.

Higher service Fees = Better Placement = More Bookings... would work cyclically.

Or even... More Bookings = Better Placement = Higher Service Fees.. as ABB might look at it?