@littlehost : "I think the one who makes the payment can choose whether to absorb the cost or pass it onto the recipient."
You are correct. Many hosts absorb the PayPal fee and look upon it as the cost of doing business. Not me.
Most travelers prefer to use a credit card for the security and the perks (mileage awards, cash-back, points, etc.). It's the traveler that receives all the benefits so I pass the PayPal processing fee onto him.
The fee for U.S. accounts is 3% (2.9%+30 cents), and 4.5% for outside the U.S. If I were to absorb the fee, it would affect my bottom line and I am loathe to give discounts as it is.
In a situation where I am handling the booking and payment, I remind the traveler that they can avoid the PayPal fee by making a direct deposit to my bank account or doing an electronic transfer (eCheck). For non-U.S., a credit card is the only option for them because I don't accept wire transfers.
I've had my PayPal account for 7 years with never a hitch.