I’ve been out of the loop for awhile with the pandemic shutdown. Is this old news?
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Apparently moving this around the world. They want the pricing to be transparent because the guests complain about the service fee Becoming more and more like B.com. My guests have paid up to 20% + 3% from the host at my accommodation
Tried it and despite the claim:
hosts who tried it out and priced competitively across websites got an average of 17%* more bookings.
We didn’t see any significant difference. That said, we were pricing to 17% overall (14% service and 3% host), as opposed to the reduced figure of 15%. Not sure that the 2% would have made much of a difference.
It does align the pricing structure with BDC, so for many hosts who advertise on both it may make life slightly easier, very slightly…
JF
EDIT: I just came across this, and the proposed changes will certainly ease any issues for Airbnb in Amsterdam.
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If they roll this out in the U.S. I will raise my rates to offset, many will not and make less I guess. I already charge more than my “competition” for the most part and I stay booked.
I am guessing many hosts will eat it and just make less.
RR
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I switched voluntarily a while ago and adjusted my rates, even though it raises my gross revenue (which I need to keep below the UK VAT threshold).
The experience is better for the guest (esp first time users) - that old Guest Service fee always looked a bit shifty. And it makes the relationships clearer - the guest pays me through the agent, I pay the agent commission.
And I’m not really stuck for bookings over 3 platforms so even if it did knock bookings on Airbnb, that’s on them to fix - BDC will make up the slack.
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When I let out my spare room in the house, my rates were higher than the “competition,” but I was on track for a banner year. F-ing Covid. I’ll just adjust my rates again and make my money, when I’m allowed to open up again.
I once received 4 stars on value due to the guest fees and explained that I didn’t see a dime of that. I’m sure that the simplified commission process will make life easier for guests. Now, about that 10% hotel tax…
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But in the UK/Euope guests see the total price including the fee. @mattbee so unless you are swallowing the guest fee - guests will pay the same.
Did you get a substantial increase in booking following you paying the guest fee?
Upsides:
- A better experience for guests, which we know is what Airbnb cares most about, and host should care about it, too.
- More reasonable to deploy it universally (or at least by country) so that there’s no advantage to guests seeing lower nightly rates on some listings compared to others.
Downsides:
- It doesn’t appear that Airbnb will automatically adjust a host’s pricing, so any host that doesn’t follow the “guide” and adjust their prices will be loosing about 12% until the host adjusts pricing.
- Adjusting prices to cover taxes will be more complicated for hosts in specific locations, and there will be differences for taxes collected by Airbnb and taxes collected by hosts. I expect this will end up being too complicated to cover in the “guide”.
- Host-authorized refunds may cost hosts more. I think many hosts previously refunded money and just wrote off the 3% fee that went to Airbnb, but 15% will be harder to swallow. There may also be other refund scenarios where hosts can get screwed, such as mid-stay cancellations.
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With Air there is always ways to screw the hosts it seems! I have never had a mid stay cancellation, I cannot imagine why I would refund anything for a guest leaving early though and being entitled a refund unless of course I kicked them out, and even then IDK
RR
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I wonder if hosts will be more valued if the fees are coming from the host…? In the current set up the guests are valued because of the high fees they pay. I also think the calculations on a refund will be very complicated.
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If you have flexible cancellation policy, guests can cancel mid-stay and get the remaining days refunded. Remaining days include all days where check-in is at least 24 hours after the cancellation occurs.
Oh wow I never knew that. I have had strict since day one I see no benefit to flexible or moderate.
RR
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LOL, not likely.
All the money comes from the guest, regardless of who you they say is paying the fees.
The hosts are the only ones that don’t really benefit from this model. Guests benefit because the pricing is simpler. Airbnb benefits because they no longer have to be transparent about their fees to guests.
Can anyone explain how this is going to work if the guest cancels before check-in, (irrespective of whether they cancelled in time to get a full refund or not)? Currently, if a guest cancels, I don’t know or concern myself with whether the guest got their service fee refunded, or Airbnb gave them a travel credit in lieu of refunding, or what.
So if a guest cancels under the host pays all fees structure, what happens with the service fee the host would be charged on that reservation? The host doesn’t get paid at all for the booking, or gets paid according to their cancellation policy, but the host now eats the entire service fee? Or guests will be contacting hosts irate that they didn’t get the service fee back? I’m having trouble wrapping my head around how it would work.
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On B.con, if the guest cancels and you agree to the refund and the payment is through them - they deal with it. I get a virtual credit card which is unavailable until the second day of the booking.
I would expect the host to get whatever is coming to them according to their cancellation policy with 15% taken out by Airbnb.
The question is how much does the guest actually get back though. There are currently a few guest cancellation scenarios where the host receives only a partial payout (or nothing at all), but Airbnb still keeps 100% of the guest service fees for the entire reservation. I’m not sure how they can reconcile this without changing the cancellation policy. For example, this is some of the wording from the moderate policy:
In this case, Airbnb keeps 100% of the guest service fee, and the host keeps 50% of the nightly rate, but you can’t present it that way to guests when the service fee is baked-in to the nightly rate (unless, in this case, Airbnb is willing to give up 50% of the fees they would’ve collected).
I looked at the Airbnb website for more information about this. The information I found was not very complete.
I’m thinking some guests will ultimately pay less
Suppose
$100/night (Includes 3% host fee; $97 to host)
14% guest fee (Airbnb says average 14.6%)
10% hotel tax
Actual cost to guest $124/night
Host increases rate to cover fee shift (15% host fee & 0% guest fee)
$113 night (increased 13% to cover total 15% booking fee; $96.5 to host)
10% hotel tax
Actual cost to guest $123/night
Guests won’t realize this. They will continue to shop/book by location & cheapest nightly rate.
If a local hotel advertises $100/night they will get the business.
In my area this is voluntary but feels like it will be required soon.
Yes, that’s what I was trying to understand. If Airbnb would still charge us the entire service fee for a cancelled reservation, or what. And it appears we still don’t know.
It’s also unclear if this an across the board platform change or just applies to those hosts who got these emails , use channel managers, etc. I’ve asked for clarification on the CC, but so far, no one seems to have an answer.
Personally, I hope that will be solely an EU thing. I prefer it the way it is.
One of the reasons that we offer the flexible option is that we are renting rooms in our own house and consequently we are in contact throughout the day with our guests. If a guest wants to move and is only staying because of the costs of cancellation that does not make for a happy household so that is what we see as a benefit.
Also, out of around 250 stays we have only had 3 or 4 who have cancelled inside a typical strict cancellation period.
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