Avoiding the Foreign Transaction Fee

[Terrence0]

I have a suggestion for Airbnb.  Currently, they have a very inefficient policy that they pass off onto the traveler.

I have a credit card that doesn't charge foreign transaction fees (like many other avid travelers) - my bank covers these fees for me.  Airbnb charges foreign transaction fees to book based on location - in fact, if you are booking and you switch the currency to the local currency of the listing, you will see a 3% lower cost (the foreign transaction fee cost) than if you look at it in another currency.  For my last 2 trips I have attempted to pay in the local currency (for example, if I am travelling to France, I will try to pay in Euros), but Airbnb will not let me do this.  Instead, they force me to pay in US dollars because I live in the US (even though I want to and have tried to pay in Euros), then they take my US dollars, convert them to Euros themselves, charge me a 3% fee (which my bank would have done for me for free!), and then pay the host in Euros.  This is dumb and inefficient - even worse, they pass this inefficiency off on me.  Give customers the option to pay in the currency of their choosing.

[Jeff-And-Cheryl0]

@Miko1

I agree completely about this just  beinging a money grab. I know guests that didn't even know that the 3% was being added on!!

I'm suprprised that airbnb doesn't offer a co branded credit card that then covers the 3% Convesion Fee - which again will still suck because I want to use my Chase Sapphire Reserve Card for the travel benefits/rewards - a card that charges no conversion fee.  

I find it hard to understand why a Company trying to build a brand would do something so shady.

[Cormac0]

@Terrence

The whole thing is bogus,

Airbnb have Euro customers so a big pot of Euro cash in a Bank account

Airbnb have Dollar customers so a big pot of Dollar cash sitting in a Bank account

all Airbnb need to do is display the price in dollars if you are visiting a Euro country with a mid-market rate and pay the fee out of their Euro account and similarly the opposite way around, so no actual exchange rate transaction takes place it’s a notional thing and you know what, that’s what they’re probably doing and sticking the customer with a bad rate and exchange fee to booth.

TransferWise operate along these lines and charge a fee for it, but there in the currency exchange business not the hospitality business.

Regards

Cormac

ECK III

ECK VIII

[Brian130]

"Airbnb’s holding costs and foreign currency risks"?

So at least that's an explanatino from Airbnb about why the fee is there, but I still haven't seen an actual answer to the question of why we're forbidden from paying in the currency of our choice.  When I travel, my credit card lets me pay in the local currency and I let them do the conversion because I know they won't screw me over.  Some businesses have the option of paying in USD, but by default charges are made by the business to my credit card company in the local currency.

If they let me pay the host in the host's local currency, they shouldn't have any foreign currency risks.  That sounds like a problem *they* created when they prevented people from paying in whichever currency they wanted.

The holding costs should be no different than holding costs on a domestic reservation, and since when does holding money involve fees?  Airbnb effectively has that money to do whatever with between reservation acceptance date and host payment date.

If this is to cover currency fluctuations between when the reservation is accepted/guest is charged and when Airbnb releases the fund to the host:

1. That's a normal cost of doing business and it should even out anyway, unless there's some massive Airbnb reservation foreign currency speculation ring I'm unaware of.  
2. Or, true-up the currency differences on the day the reservation begins - that way, it can benefit either the guest or Airbnb, instead of a guaranteed profit for Airbnb.  
3. Or, have hosts accept the currency risk - the conversion rate is at time of payment is used when paying the host in the host's local currency.  This is the way hotels handle nonrefundable reservations.

[Peggy-And-Mike0]

WOW. Thanks everyone!  I was just beginning to plan for some international travel and won't be using AirBnB for it!  Even though I'm a host and love staying at AirBnB places, I am offended at this practice of skimming the extra fees, especially when they aren't even using the accurate rate at the time.  

[Patrick316]

Yeah, I've had similar problems.

For a while there, I was getting around it by registering the same credit card 3-4x with a different country for each. It was working. It doesn't now. The crazy thing is, my card is USD my country is a USD currency country yet they make me pay in GBP. I get dinged because I pay a fee on the GBP conversion to my USD card and I get a 3% fee on the fact that they call my account GBP.

Absolute rip off and the support treats me like crap.  All around a bad company.

Anyone have recommendations on other companies?

[Liz228]

I have the same issue...today...USD credit card, USD currency where I live but they want to convert everything to GBP. What the heck? Did you ever get an answer from AirBnB about that issue?

[Judah1]

I'm an American host managing a listing in a Israel. I set up my listing to charge in USD, I get paid to PayPal in USD and 100% of my customers are from the US and paying in USD. So why is it that my customers are getting charged a 3% currency conversion fee if nothing is actually getting converted? 

Ultimately this fee is coming out of my pocket, because now my prices are displayed with the 3% included and I will need to adjust them lower to stay competitive. 

This is a real shady and scummy move from Airbnb, I can't see how it's not deceptive to charge a fake currency conversion fee. 

Perhaps I should contact the FTC to see what they think about it?

[Jeff-And-Cheryl0]

@Judah1

It's one of those hidden fees that I would bet the majority of one or two time a year airbnb guests don't notice.  I never realized it until about my 4th stay in Italy last year (its has cost me $1,000USD the past year).  You can see airbnb's weak response. From your hosting side it does make it more expensive for your US guests - even if they have a no conversion fee credit card, or as you set up to get paid in USD.  Not sure why airbnb continues this practice with all the complaints....Oh wait ..... they don’t have much competition in what they are doing.  If they did we would have options.  Best of luck in hosting.  We have become friends with many of our hosts.

[Judah1]

Many of our guests will be paying extra fees worth hundreds of dollars for a single reservation. That's on top of the hefty service fee that Airbnb already charges guests.

I am a former VRBO host and will reconsider listing on there. I stopped because they copied the Airbnb service fees (on top of membership fees) without adding any benefits in return. Now with the currency conversion fees I will probably make more money on VRBO. It's the only site that brings in customers like Airbnb.

Thankfully we also started getting more word of mouth bookings.

[Jeff-And-Cheryl0]

 The problem I found as a full time traveler with VRBO/Homeaway is 1: Available selection in the areas I travel is much less and 2: The VRBO owners tend not to keep their calendars up to date - so I waste time only to find out that the property is booked and they just kept it open in order to try to get you to book another property they may manage – but I still use them.

The problem I found as a full time traveler with VRBO/Homeaway is 1: Available selection in the areas I travel is much less and 2: The VRBO owners tend not to keep their calendars up to date - so I waste time only to find out that the property is booked and they just kept it open in order to try to get you to book another property they may manage – but I still use them.

[Judah1]

1. For a host, this is actually a good thing. Especially if you have an attractive property 😉

Web traffic is very heavy for VRBO/Homeaway, so less competetion isn't bad at the moment.

2. I can sync my calendar to Airbnb and vice versa.

[Kevin306]

Just adding another voice to the chorus. Noticed this fee today when my wife and I were booking a place for some summer travel. We live in Europe but have US-based credit cards. I hadn't noticed this before because normally I'm not sitting next to my wife when she books travel through Airbnb. In any case, these fees are completely unjustified-- if the consumer wants his card (from anywhere!) charged in the local currency, Airbnb should process it as such and leave any fees to the consumer's credit card company to charge.

I will be filing a formal complaint with Airbnb and documenting this on the US Federal Trade Commission's website. Hope you will all do the same!

[Jeff-And-Cheryl0]

@Kevin306 at all.  Great.  Dont forget to not only look at the Hidden 3% conversion fee but also the real time accurate conversion rate that  your US credit card gives your vs the scam that Airbnb gives you (for them to make more on a conversion that should be handled by your credit card)

Any person/company as a current investor or on the board of directors of Airbnb should be concerned over this anti customer centric practice.  Please fix this!  I will never consider an Airbnb "Experence" when this is going on!

[Adam185]

I just discovered this hidden fee as well. The current exchange rate is $1USD to .90Euro. Airbnb is showing $1USD to .86Euro. This results in a hidden $10 fee to my potential stay. I appreciate airbnb's platform and would gladly pay an extra $10, but not in this presentation. If consumers don't hold companies accountable for these hidden fees, no one will.

Wife and I are going to Europe for 5-6 months this year, and we were going to use Airbnb. Because of these hidden fees, we will not use Airbnb as planned

[Jeff-And-Cheryl0]

@Adam185

Do not forget the very hidden 3% they add when you use a US credit card and book in Europe - that's in addition to the crappy exchange rate you point out.