When Massachusetts passed a law that required us to collect taxes starting 7/1 I asked on this and a different FB group. I decided to go with the suggestion that you are doing. Folks said that they guests didn’t seem to mind. What I find irritating is that if they guests partial pay, you can’t send the request unit a week before they check in. I don’t want to build it into the price because then Airbnb takes a percentage and I have to pay taxes on the taxes.
The idea that I should worry about what the guests see as far as the price online is ridiculous, when you go to buy a car you know you will have to pay tax the car dealer does not build it in the price. I am not going to build it in, I will collect it separately. It’s a pain though. I just got a VRBO booking, easy peasy the tax is accounted for.
I get around the “bill the tax separately” by 1) showing the tax percentages in my listing as an explanation of the all-inclusive charge and 2) issuing an invoice that shows the base rate (my charge divided by 1 + tax rate), and then other lines with the local lodging tax and the state sales tax shown adding up to the total. I put a line item for Airbnb’s fee to the guest also, then a little ad below to book direct with me next time and skip the platform fee.
I will not be doing that. I will continue to charge separately. I wish Air would allow us a bit more control
I did say “correct me if I’m wrong,” but it sure seemed like that’s exactly what you meant by this:
The price the guest actually pays is 10% higher than Airbnb shows the guest, so if Airbnb included the 10%, then the difference would be very small (less than 2%) compared to you building it into your price, so I’m not actually sure what you are trying to say.
Right, but the difference is the customer doesn’t have to write two checks, they only write one, and they see the real bottom-line before they write that one check. We all know that some guests don’t read what you tell them and you said yourself that some guests feel strong-armed. Building the tax into the price eliminates the potential of a surprise for those guests, plus it eliminates the extra manual step that you have to take for every Airbnb guest.
The math is a little tricky if you want to have a price that covers the tax and Airbnb’s fees and have your payout the same as before to the exact penny, but you only have to do it once. Other than that, there’s no downside at all that I can see.
But the psychology of humans is weird. Potential guests may be mentally comparing the “listed” prices of a number of STRs – looking at the pics on the city page before putting in dates, and might be totally turned off by a higher price from the get-go. They pick a place, put in dates to see if it’s available, and the add-ons, while annoying, don’t dissuade them as much because they’ve already filtered and settled on a place they find attractive. It’s mentally costly for them to go back and try to find another (less attractive) place. That’s one reason I keep a separate cleaning fee.
If I raised my rates 10% it would put me over $300 a night, which would result in fewer bookings I think.
I do not see my approach as a bait and switch, I do see an opportunity to tell guests how they can save on the next booking by booking direct and saving the third party fees. (I know you did not say bait and switch, just saying)
I see, you’re trying to stay below a mental price point, the same way retail stores take advantage of the before-tax price.
So, one thing you might need to prepare for is what you do if Airbnb cuts a deal with your county to allow them to start collecting and remitting the tax on your behalf (like they already do for me)?
Before Air started collecting taxes for my state I had to collect them like you’re doing.
I told guests that they could pay through resolution center before arrival or with cash on arrival. I liked resolution center because they don’t charge fees on the amount like they do when you modify the reservation. I had to tell guests to look out for an e-mail - the messages regarding resolution center don’t seem to appear in the regular Air inbox. If guests didn’t have cash at arrival I’d run their card through Square as a last resort.
I think only one stay out of 100+ pushed back on the taxes.
You shouldn’t roll them into your price if other hosts in your area aren’t collecting/remitting; it’ll just make you look 10% more expensive and throw off your “value proposition” (as the MBA’s say).
I couldn’t agree more.
On another note, I want guests who appreciate I am legit with the taxes, who are not just looking for the cheapest alternative, which I am not.