Yeah, I mean I see that - but it’s more work for less reward - and hosts aren’t going to stick around at those prices… Seems like it would be smarter to build a quality product.
But I know who I’m preaching to - the choir!
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I suspect one of the reasons is so that Air can increase their traveler fee and raise it from the 6-12%.
Flipkey started out at 5-15% and used to clearly display their tier table. You could calculate yourself what the guest would be charged. But now (at least for my all of my reservations) they charge 13.5% of the total. It doesn’t matter if my guest wants to book for 30 days. Once a guest did make an inquiry for a month long stay and FK added over $800 as a booking fee…lol.
But the lower rates we have, the more the sites can charge in booking fees.
They are greedy mutherfkers.
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Maybe I’m missing something, but I’m not following the logic. If the listings are priced cheaper, Airbnb can charge a larger percentage of the price? Why? And even if they do that, how does it help them? If they charged a fixed percentage, and the prices were higher, wouldn’t that be better for them?
I don’t understand that.- see above.
Say a hotel charges $100 and price suggestions say $30 for your place. You’re not wiling to do that but double your price, feeling guilty that Air suggests $30 but you’re charging $60, and taking home $57. Sounds good, you doubled the suggested price and got a booking. Well Air charges 10% and makes $6 from the guest and $3 from you and the guest still got the room for $34 less than a hotel with better amenities.
Due to market saturation, hosts will be scared to raise their rates because they don’t want to not get booked. But air says they charge up to 15%. So Air has no motive to only charge the 10%, if they charge 15% round the board Air is now making roughly 35% more off of everyone, and the guests are still paying $30 less than a hotel. Scare the hosts into keeping their prices low, but Air is skimming 50% more profit for them across the board. Pressuring low prices is a win for them!
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Hi @Sarah_Warren,
Oh, I see what you (and presumably @cabinhost) mean. You mean if the host keeps his or her price low, then Airbnb can increase their slice of the pie and still keep the price at a competitive rate relative to a standard hotel?
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I think they want to increase the number of users of the plaform. Low prices gets more users (with the hosts competition, they can always find hosts that are lowering price). The number of users is very important when they will go public
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Air knows there is only a certain price the average customer will pay for a certain type of property. So let’s take an apartment that has a $500 total for 3 nights. Since Air’s algorithm is a secret, let’s just say for this amount they charge a 9% booking fee.
$500 (9%) = $45 + $15 (3% from host) = Air gets $60 and guest pays $545.
Now let’s say according to Air’s research they know the average customer is willing to pay $550 for this type of apartment. If they force the host to reduce their rates, then yes they can take a bigger piece of the pie. Let’s say you reduce the rate by $20, to $480. And let’s use a 13.5% fee (like FK).
$485 (13.5%) = $65.48+ $14.55 (3% from host) = Air gets $80.03 and guest pays $550.48.
That wasn’t really the best example as there so many other factors that we don’t know about. And the nightly rate really isn’t that much different when you divide by three. But I just using those numbers to show how sites can take a bigger chunk.
Another thing is the sites are trying to make customers believe the fees are just part of our rates. HA does this, and FK too. I checked Air the other day and it looked like they changed the appearance of where they explained the booking fee, under the pricing detail. I don’t recall the explanation being above the total. But I can see them at some point only including everything in the total, and customer just thinks it’s all part of our rates.
Even HA said the traveler is more likely to book if they think it is just part of owner rates verus a fee the site is charging.
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@dcmooney I think you should list it as a full apartment AND clearly outline that it is a mother in law, self contained, type of unit that shares your front door. I promise the ABB gods will not swoop down and boot you from the platform.
My two units of currency!
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Hi @cabinhost,
Thank you for the explanation. That’s similar to what @Sarah_Warren was saying, but with extra numbers! You’ve obviously put some thought into this. I haven’t really.
That’s pretty dishonest.
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That’s a thought - and I have toyed with the idea. I did at one point list it that way and then had it all over my listing that they would come in the front door. However…it seems like I come up earlier in the search results, AND, some people choose our home specifically for that ‘American family experience’ - so I’m torn. I might try it, though, since I’m in a drought booking-wise.
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Yes, I noticed that - you don’t see the fees at all - unless you click on ‘more’. Don’t like that!!
What got my attention was the location of the explanation. At first I didn’t even notice it, as my eye was not drawn to that area. It could have always been like this, but I don’t remember that at all.
I’m sure they do much research to see where the consumer eye is naturally drawn.
No, it’s brand new. And, it used to be the difference costs were similar in font size. Now the total price is large and the fees are listed in tiny font. booo…hisssss
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Very good math and examples!
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Don’t hold back, tell us how you really feel!
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This feature was introduced last year and it’s been brilliant. Unfortunately, it is squirrelled away in a secret place that only the most intrepid can find.
It’s under AVAILABILITY SETTINGS. Scroll down and then in small grey type you’ll see ADD ANOTHER REQUIREMENT. You can select specific dates from the drop-down.
My latest guests told me they thought the service fee was to me, the host. I’ve never had that before. I really want to know what has changed in the language they use. I will be so pissed off if they’ve changed it. Is there any way to find out for sure?
I thought at one time occupancy taxes was one line (in areas where Air collects) and service fees was a separate line.
I cannot recall what it used to look like. But I thought not too long ago it was fairly clear that the service fee was a fee for booking through Air.
That’s why they force a question mark to hover over. If all these sites really wanted to be transparent then they would have a line item saying “Airbnb service fee” etc.
Go to try to book a property in North Carolina in U.S. (where they do collect the tax) and you can see what I am referring to.
I checked in my own area and it is listed simply as Service Fee. I feel sure it used to be Airbnb Service Fee but of course I can’t remember for sure. The more info question mark reveals “This helps us run our platform and offer services such as 24/7 support on your trip. It includes VAT”
Searching in N Carolina, there is the additional Occupancy tax. The more info reveals this:
“North Carolina General Sales and Use Tax Graham General Sales and Use Tax Graham Accommodation Tax Robbinsville Accommodation Tax”.
I cut and pasted that. Is it some kind of duplicate text? Sorry, I know that’s not the point of this discussion! It just looks a bit weird.
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