See the thread on “Single fee” and @PitonView’s post re the math on that. If you only raise your price by 12.5%, you’ll come out with less than on the split fee.
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On the split fee system, the guest percentage varies by region. 14.5-16% is my understanding. The host always pays 3%,.
I currently pay 15% single fee. Yes I’m aware it’s going up to 15.5%. more about that later.
Prior to adopting the single fee, I was paying 3% and the guest was paying 15%. That is a total of 18%.
So if I charge 100 (currency of your choice) then the guest was paying 115. And I would receive 97 of it (100 -3%).
On the single fee system, I raised my price to 115, exactly the same as the guest was paying previously. But now I pay 15% commission and the guest pays 0%, so my payout is now 100 instead of 97, or 3% higher. Because the commission is now 15%, not 18%. The guest sees no difference at all.
So now it’s going up to 15.5%. so that means I’ll get a 99.50 payout from my 115 per night price. It’s still higher than the previous 97. And the guest still pays no difference.
@islacat - 15% commission on $115 is not $15. It’s $17.25.
So at $115, you will get 97.75, which is 75 cents more than you used to get.
No, you will get a $97.17 payout.
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Ok, I get it. You win.
There’s so much fury and outrage about this, but it’s still a larger payout than before, and the guest is paying the same. There seems to be a lot of misunderstanding.
There is another fury and outrage that I’m having trouble with: taxes
According to some, there are places in the world that tax on the basis of gross earnings, but do not allow deductions.
Example: guest pays 1000, Airbnb takes 15% commission, but you are taxed on the full 1000 and are not allowed to deduct the commission … or other expenses such as laundry, cleaning, maintenance, etc.
This would equate to double or even triple taxation, since those expenses are actually somebody else’s income, not yours, which they’ll also be taxed on. And any expenses those services had in earning that income would also be somebody else’s income. Taxed again.
So according to some who are fury and outraging this, it only means their tax will increase 15%.
I’ve lived in a lot of places in the world, but I’ve never seen the tax system that taxes that way. Nor can I see how you could successfully run any business under those circumstances. Yet, I’ve lost that argument several times. Apparently, the UK tax system is like that. And also some US States?
But I’m still skeptical. Something off about this. Perhaps they haven’t discussed this with an accountant?
The bottom line is that the single fee system is an upside, not a downside. One of the few things Airbnb has ever done that actually benefits hosts.
I was not trying to “win”. It’s just that many people make the same math mistake, applying the new percentage to the old amount. Some of them think that they are already paying 3%, so they only need to raise their rates 12.5% and end up making less.
I don’t have fury about the single fee. I believe that AirBnB selected the 15.5% so they would make very close to the same as they did before on the split fee. The anger I’ve read about is that the OTA’s are now burying their service fee in our nightly rate (whether split or single fee) so it’s hard to find how much goes to whom. As one owner said, the OTA’s are trying to make owners “look like the zeros and they look like the heroes with no fees”.
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I sense many people just don’t get it. Why raise your price only 12.5% (giving the guest a 2.5% discount), when you can raise it 15.5% and nobody will notice any difference?
The other fury that I’ve heard a lot, is that if I have to raise my price, then I’ll lose business because it will be more expensive. It doesn’t matter how clearly you explain that the price will be the same, they still rail that Airbnb is forcing them to raise prices which will scare away bookings.
As far as “burying”, I don’t get that either. I’m not sure it even matters. The guest wants to book a place. Here’s the price they have to pay. They either like it or they don’t. What’s the problem? And every other OTA that I know of has always used the single fee system. Nothing new about that. In fact, It’s easier to calculate price consistency across platforms when they all use the same commission model (?).
If all of your competition also uses the single fee, then everyone is on an equal footing. Single fee listings will look more expensive if much of your competition uses split fee. Not if guests just look at the total price, but if they look at the breakdown of fee per night.
And I don’t get the tax system where no expense deductions are allowed on gross income, either.
There are some tax regimes here in Mexico like that, but in those cases, the business owner is in a tax category that is taxed at a lower rate than categories where you can deduct expenses.
But different countries definitely have different tax structures. For instance, in Canada, you can deduct expenses that you only have counter receipts for and if you have a home-based business, you can only deduct a percentage of things like utilities, property taxes, etc, because some of that usage is personal, not directly for your business.
In Mexico, I can only deduct official receipts (facturas) that have my name and tax number on them. But I can deduct anything I have those receipts for, in full, not at a percentage.
I am on split fee and what I really don’t like about single fee is what was mentioned- that it’s a sneaky way of Airbnb to hide how much they are charging in service fees, making it look like all the money is going into hosts’ pockets.
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Not any longer. AirBnB is now showing the total average per night (except for taxes). When I select random listings to see if they show the details on the pricing while I’m just looking at the listing, all I get is “the nightly rate is $XX” which is simply the total divided by the number of nights. No detail on how the total is calculated.
I’ve heard the details of the cost come up after you’ve started the booking process, but I haven’t tried confirming that yet.
I’m pretty sure I said this many times before but guests who book based on price are the worst guests.
Even worse, our guests who look at “breakdowns” of where the money go and question it. Folks who think that ‘cleaning fee’ is a point of contention, for example; a guest who wants to book direct with you because they don’t want to pay an occupancy tax for instance, or a guest who asks you for a discount is an immediately rejection as far as I’m concerned.
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Why do you think your personal experience is universal? I have one of the most inexpensive places in my town for what I offer, and have never gotten a bad guest. (I do agree though, that guests who start out asking for discounts are a big red flag)
And I doubt there are many guests who book on price alone. They may start their search with a low price parameter, to see what’s out there within their budget, but then they are going to sort through those options, looking at other factors like distance from local places where they need or want to go, whether it has a private bathroom or good Wifi or access to kitchen facilities, if those are factors that matter to them.
I’ve found it interesting when guests have told me what factors matter to them in choosing a listing.
One guest told me he doesn’t care whether a place is $50/night or $250- he looks for places that are off the beaten path, in a quiet area, and eclectic.
A flight attendant told me the airline puts him up in Marriot hotels all over the world, so when he’s on a personal vacation, he likes “live like a local” homeshares.
Other guests have told me they like booking homeshare listings, but having a private bathroom, and/or full kitchen facilities, as they like to cook their own meals, are deciding factors.
The majority of guests, if not all, do not book based on one factor alone.
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True. If I’m traveling by myself and staying somewhere in the US, there are two amenities I look for that are a big part of why I book one place over another. Unfortunately they aren’t things I can enter in the search box to look for; I have to look at the pictures. The two things I like to find and will book a place that has them are a recliner and a handheld shower.
It’s not that I won’t book a place without them, it’s just that I greatly prefer to have those things for my comfort.
It’s still not clear to me why it matters.
$100 is $100 no matter how you divide it up. This is the price I have to pay whether it’s single or split fee. If I’m willing to pay it, I do. If I’m not willing to pay it, I don’t.
I use other platforms like BDC for booking travel, and it’s the same thing there. I accept the offer or I don’t.
(?)
Not sure why what matters? As far as the total price guests pay, split vs. single fee doesn’t matter. But it matters to me that Airbnb wants to hide their service fee from guests, so guests think all the money they pay is going to the host. Companies being non-transparent matters to me, and may also matter to guests. Not everything is about the total cost of things.
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OK, please remind me how that results in fewer bookings.
Can we get back to the phone number issue? Is it rolled out nationwide? There will be absolutely no phone numbers shared on platform messaging at any time?
Do they not think hosts will have to use more inventive ways to reach guests? Such as directing them to a effbee page or an eyegee page which might result in a smart guest using off platform booking.
I raised my prices 20% in hopes that their pricing strategies won’t affect us. My husband is doing rare guest work as I am recovering from breast cancer surgery and just don’t gaf about business right now.
Literally there is no way someone can get here without giving me their number. I refuse to have all comms on platform. I have never directed a guest to book off platform. I have 200 five star reviews and this is definitely shooting their $ provider in her foot. In many countries it is also contrary to rental agreement laws. Are they doing this only where they can?
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I just got so poed at the poor Indian super Host receptionist. He said the “temporary phone number” will be available at checkin or maybe 2-3 hours before checkin only. Of course i didn’t know the timing restraints and left a message and called, but when answered it was a wrong number.
But… they do give you a 4 digit code that is on the reservation that is 4 numbers end of guest phone number. Once, when I called the number given I heard a voice giving me a 10 digit number including these 4. If I’d had a pencil handy, I might have realized and written it down. On 2nd try to get that recording, I was unsuccessful. I’m so pissed
I just looked at the message thread and it is possible that one of the two numbers in my welcome after confirm note is visible…
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i had a potential guest wondering if they could rent for a movie shoot (no), and while exchanging messages, asked if she could book offline. i immediately shot that down (while contacting her at her phone number) but airbnb immediately stripped out the phone number i include on my welcome email, replacing it with - or *, I forget. Now no guests can get hold of me.
So now I put my number down in the unit, on the fridge right under the wifi password, and i ask guests to text me with their cell numbers, in case there’s a fire or something. mostly they don’t.
It’s really dangerous not to let us speak directly to our guests, and it’s stupid. They just want more control. I’ll be happy to do side bookings from now on, screw them. i’m already on vrbo, how many other platforms can i handle?
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have only just discovered this latest airbnb trick and certainly don’t believe it’s for our convenience and protection. we had been sending our guests a brochure in pdf format with detailed directions , check in procedure and other info. On receiving a booking we message guest thanking them and requesting a regular email which could accept pdf attachments, and have never had a guest that did not want to disclose email. We have always thought that the best thing about airbnb was their accounting system as we have always got payouts without a problem. We also have a website containing our airbnb listing link and encourage guests to book through airbnb. we are sick of airb treating us hosts as the enemy1
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The amount of inconvenience and potentially disastrous situations this will lead to will far outweigh the amount of “off-platform, cut Airbnb out of the deal” situations they are trying to quash.
Their platform is so riddled with glitches, that how could we have any confidence that these “temporary numbers” are going to work without a hitch?
(The other day I was trying to answer a guest message on the platform and kept getting a pop-up every time I tried to type in the message box, saying “This message can’t be found”, even though her message was sitting right there on the screen in front of my eyes. Luckily it wasn’t an urgent message from the guest, it was a nice introduction message accompanying her Request, which I had already accepted, but if it had been some guest emergency or time-sensitive, what then?)
They haven’t instituted this hiding of numbers in my area, so for now I can still get guests to whatsapp me for a bus station pick up.
I also used to ask guests for their email address so I could send them a map to my house, and none ever balked at giving it to me. At that time Airbnb assigned “temporary email addresses”, much like their “temporary phone number” thing. But several guests had told me that while they got the email I sent to the “temporary” email address, the attachment was missing. So I started asking for their real email.
Now I just send them a location pin on whatsapp.
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