Warning - Service Fee error happening now!

[Claire910]

This is to warn other hosts that Airbnb have an issue with the split fee system. They are overcharging all my guests.  If I go onto my calendar and select a date range, it gives me the price breakdown, e.g. £350 per week with £49 service fee (14%).  But if I pretend to be a guest booking those exact same dates, same price £350 it's charging them £59 service fee (17%).  This is so naughty.  I have screenshotted this to support..  Please submit a ticket if you have this issue. We are all getting less bookings when the service fees to guests are so high.  The more you are charging, the higher the fee and price difference to your guests!

[Joan2709]

@Joelle43 

I have seen interest-free options with Klarna and some that do charge interest. Must have something to do with the total amount financed and length of financing (I'm guessing)?

[Joelle43]

Thanks @Joan2709 for that but I'm amazed that the guests get to pay in not 3 but 4 instalments for a what is a small sum but it is what it is.

So in your example, the guests can cancel within the hosts moderate policy of 5 days but if they default on their last payment, Airbnb can shorten that cancellation to 72 hours, is that correct?  So presumably the host would get some money back and would be left to scramble for a last minute booking which they would probably have to discount?  Does the guest get a refund of the money they have already paid that falls outside of the host cancellation policy?  Does Airbnb keep their commission though in this instance?  Presumably the cleaning fee and tourist tax would be part of the refund?  So many questions sorry Joan but just trying to get my head round this as I know we're not aware that guests are making partial payments when we accept their bookings

[Joan2709]

@Joelle43 

I too have alot of questions....

Here is the biggest issue for Hosts. In the above example, let's say the guest doesn't pay the last payment. Check-in was supposed to be 11/10. According to the terms they must make the last payment on 10/27. If they don't, Airbnb still gives them 72 MORE hours to pay (until 10/30). If they don't, then Airbnb cancels the stay and that leaves only 10days for the Host to try and get another booking! For Hosts with large properties (like the one in the example), it will almost be impossible to get another booking.

Depending on the Host's cancellation policy (larger properties usually have at least "Firm", the Host would only get 50% of the orig booking amount and in addition, almost impossible to get another booking in such a short time for a large property - and their calendar could have been blocked for months in advance for this reservation?

Someone didn't think this through, or didn't care about the consequences to Hosts. Airbnb will still get their service fee however.

I can tell you we had a situation like this where the guest had to cancel the stay (not because of failing to make the last pymt) and since the guest only made a partial payment, and cancelled at 28days (outside the 30 day window) they got zero refund on their partial payment. The Host got paid 50% of the booking (Firm Cancellation Policy) but NOT paid until 24 hrs after original check-in date. The Host was NOT able to get the dates re-booked - 28 days is not enough lead time for very large properties to obtain an new booking.

If this was a cancellation by Airbnb for failure to make the last payment, the lead time would have been much less (10days in the above example). Even LESS lead time to get another booking.

[Shelley159]

@Joelle43 don't ask difficult questions! 😀

I clicked through to book your listing and was offered a partial payment with no extra charges as follows:

I get the impression that Airbnb is just keen to encourage bookings by lowering the initial payment required, and not charging interest.

No mention of Klarna or 3 separate payments in the text above, but it's possible that Klarna just isn't a thing where I am (the host payout options seem to be very regional, so maybe the guest payment options are also regional).

[Joan2709]

@Shelley159 

For smaller booking amounts I have still seen Klarna offered. Klarna puts on "hold" on funds in the guest's bank account, but not sure if they put a hold on the whole booking amount, or just the individual payment amounts. I also don't know if Klarna is offered world-wide or just in the US.

However, the bigger issue is Hosts are still vulnerable to the guest not making the last payment, Airbnb cancelling the stay and Hosts left scrambling to get another booking last minute.

[Joelle43]

Thanks @Shelley159 for checking that so what I'm thinking is that I will be revising my moderate cancellation policy to the new 14 day trial host cancellation policy in October to have a better chance of getting some money back and a chance of rebooking (maybe!) 

Given the option, I would say that the vast majority of guests are going to go for a part payment, why wouldn't they?  They are limiting the risk for themselves especially for stays where the host has a Firm/Strict policy in place

To make things even more difficult for hosts with large properties and international guests who tend to book flights in advance, is the withdrawal of the Firm cancellation policy (unless existing hosts specifically say they wish to keep it)

[Joan2709]

@Joelle43 

This is what I have been suggesting to my Host clients in light of the whole partial payment issue. I have suggested they move to a stricter cancellation policy. Again, someone at Airbnb didn't think this through. Of course Hosts will try to manage the much higher risks with partial payments by moving to a stricter cancellation policy. If Airbnb wants Hosts to move to a more relaxed cancellation policy, then why did they not put some safeguards in place for their new partial payment policies? For larger properties/amounts booked well in advance, the last payment should be made at least 60-90days out - that at least gives Hosts a fighting chance to get those dates re-booked.

BTW, Vrbo allows the Hosts total control over whether they offer partial payments and also total control over when the last payment is due.

[Joelle43]

Exactly @Joan2709 - all these changes are going to have potentially  the reverse effect - instead of hosts lightening up their cancellation policies, it's possible that they are going to have to go the other way to protect themselves from these incomplete partial payments. 

[Joan2709]

@Joelle43 

Actually...it is the Strict cancellation policy that Airbnb said they were going to remove unless the Host opted out....

...but wait...guess what? Airbnb failed to tell those Hosts who want to keep strict that Airbnb is CHANGING what the Strict cancellation policy is (moving the goal post as it were). Hosts that think they are keeping the old Strict cancellation policy aren't in reality - cause Airbnb is changing the terms of Strict as well. 

See this post

https://community.withairbnb.com/t5/Host-circle/Airbnb-New-Cancellation-Policies-Be-Careful/td-p/212...

...and yet we still don't have a seasonal cancellation policy (Vrbo has one BTW).

[Joan2709]

@Joelle43 

See the other post...

[Robin4]

@Joan2709 

I can't tell you how long this has been going on Joan, and I have not checked every transaction but, I have checked 46 random booking details over the past year that were not subject to currency transfer fees. They were simply bookings transacted entirely under the AUD financial system.

Every one of those 46 guest bookings was charged an Airbnb service fee of 15.53%, so it isn't random, it doesn't have anything to do with currency conversion. It is Airbnb's service fee charge and that's all there is to it.

The figure it's just a small amount and nobody is going to take issue with it. But collectively it does come to a large sum of money.

I don't care what Airbnb charge, I just want them to be upfront about it and make it public. I don't want to have to make excuses to guests and refund some of their payment so I don't look like the criminal.

Cheers.......Rob.

[Joan2709]

@Robin4 

Wow...😮

Agree 100% I also don't like that they don't disclose their service fee unless the guest clicks "price breakdown". It makes it appear like the Host is charging a much higher nightly rate than they actually are.

Nightly rate should be the rate plus cleaning fee ONLY. It should not include the Airbnb Service Fee. Guests think the Hosts is getting the service fee the way it is displayed now.

[Shelley159]

@Robin4 you already know what I'll say! 😀

The 15.53% means Airbnb is charging less than their stated 14.2% maximum. They're charging your guests only  14.12% plus 10% Australian sales tax = 15.53%

The total service fee percentage (including tax on Airbnb service fee) is higher for Claire because the relevant VAT rate on service fees in Wales is 20%

[Joan2709]

@Shelley159 

I'm only familiar with US listings so don't know much about VAT and GST. Is this what you are talking about? 

VAT

https://www.airbnb.com/help/article/436

@Claire910 

[Shelley159]

Yes @Joan2709 

It would help if the tax on service fees were shown as a separate line item. It's presently shown as part of the service fee and if someone calculates the percentage, it easily looks like an overcharge of the Airbnb service fee.

Also, there have been many hosts here who object to the fact that there's any mention of VAT in their booking calculations, because they're quite sure that they don't earn above the threshold and therefore don't need to register with their government to pay VAT. In the case of individual hosts, they're usually right about this ...

 ... BUT that's why the VAT is only calculated on the service fee, not on the total accommodation fee. Airbnb earns the service fee. Airbnb does have earnings above the threshold and therefore has to pay VAT on its service fees to the government of the country where the rental is located.