So after the September 15 deadline, what happens then? If I don’t change or opt in what specifically happens?
You will be receiving 15.5% less of a payout than you are now.
This isn’t an “opt in” thing. Every host will be having 15.5% deducted from their payout as of Sept.15. Just like you now have 3% deducted.
2 Likes
AirBnB made it unneccesarily complicated, of course.
-
As @muddy and I said, on Sept 15, AirBnB is going to start taking 15.5% from you as their service fee. They will no longer charge the guest a service fee. This is NOT OPTIONAL.
-
However, you can go ahead and opt-in before Sep 15 and allow them to start taking the 15.5%. Their tool will calculate the rate you need to charge to get the same amount you are getting now (for eaxmple, $100 old rate → $115 new rate).
If you opt-in before Sep 15 and use their tool to set the new rates, it should not impact your competitiveness. The guest will still pay the same as before unless you raise your rates more than the “tool” suggests.
I don’t know if their “tool” will be available after September 15th, but you can still raise your rates manually if the tool goes away.
Thank you for uncomplicating it!
I do, however, wonder if it is strategic for me not to do this until closer to the September 15 deadline as the rate will be less competitive if I am the only one in the crowd with this different rate?
1 Like
I have switched to “smart pricing” and seen a bit more on income per night. I wonder if switching over to new structure now while still on Smart Pricing will be giving up too much price control and airvbvb while take advantage of control over sp. I may have to just leave it because my latest increase has left us with few guests.
I delayed switching over until the last day (this switch happened a couple of weeks ago for the UK). Largely because I believed, and still do, that there is a value to having guests seeing what Airbnb is charging as a service fee above the nightly rate.
Now guests might not like the price and consider me a greedy host, but it is the same across the board and all the comparable listings are in the same boat. I allowed the tool to adjust the prices but then went through and did a readjustment manually as I decided to drop the separate cleaning fee. I felt that looked a bit off with the higher nightly rate. The tool didn’t exactly match my own calculations but it wasn’t far off.
1 Like
AND they take 15.5% from the cleaning fee, extra guest fees, etc. So you WILL be paying more.
1 Like
Of course - you raise those 15%, too.
1 Like
You actually need to raise by 18% or so in order for the maths to work out
3 Likes
Yes and no - it depends on your starting point. Here’s the math:
Let’s use an example of a current host that has a posted rate of $100 US a night on AirBnB.
That host is currently “taking home” $97 a night after AirBnB taking out their current host fee of 3% and want to maintain the same amount.
-
Starting from the current rate of $100: The host needs to raise the rates by 15% to $115. AirBnB will take 15.5% of that ($17.82) The host will get 84.5% of that ($97.18). The host is actually taking home a few cents more. (You really only have to raise it 14.8% to get to the $97 take home.)
-
Starting from the current take home of $97: The host needs to raise the rates by 18.34% to $114.79. AirBnB will take 15.5% of that ($17.79) The host will get 84.5% of that ($97).
But most hosts are going to start with their current rate and add the 15%. The important thing they can’t forget is that they need to increase all their fees by 15%, too.
2 Likes
Hi, Rolf, the final total cost of a booking remains mathematically identical regardless of the model chosen, provided the nightly rates are adjusted accordingly (raise 18.34%). In the “Split Fee” model, the guest sees a lower nightly rate but pays a separate service fee at checkout; in the “Host-Only” model, that fee is simply baked into a higher, all-inclusive nightly rate. The guest’s total out-of-pocket expense stays the same in both scenarios, meaning the only real difference for a host is how the pricing is displayed to the consumer—the “Host-Only” model can improve conversion by eliminating “fee shock” at the final stage of booking, but it requires the host to intentionally raise their nightly rate to absorb the platform’s commission while maintaining the same net profit.
2 Likes
Thank you so much for calming my fears!
If I do the changeover today, will somebody seeking a booking see my rate as higher than before on the Airbnb search page? I’m asking because I’m wondering if, if it does, I should wait more until September so that in contrast my booking seems the same?
1 Like
My understanding is that it should display the same total as currently whether you accept the automatic adjustment now or wait until September. Guests see the same total on the search - either it is your current nightly rate plus the airbnb guest fee, or your new nightly rate without the separate guest fee. The only difference would be if you decided to change your nightly rate up or down from where it is at the moment.
Also, in the UK at least, the 15.5% fee is actually 18.6% due to the added VAT. If you have a similar tax in the US, You will need to factor that into your calculations.
If the goal is making money, adjust your prices based on demand.
Empty, lower prices.
Full and booked far in advance? Raise prices.
1 Like
Yes, VAT is always charged on commissions. And that doesn’t change with single fee.
I switched to single fee long ago, because it simplifies accounting and makes it easier to keep prices consistent across platforms. And I receive a slightly higher payout.
Because I switched long ago, I can’t really say how the new switchover tool provided by Airbnb works, but those who have used the tool say it applied everything properly, including VAT, and their sticker price is now the same as before, and their payout is also the same.
So it may be worthwhile to just use the conversion tool. I haven’t heard about any problems with it.
Just got off the phone with the TOT guy at my city’s (Arroyo Grande, CA) offices. Our Airbnb guests will be paying more for the city’s TOT because of the Airbnb Guest fee we Hosts will include in our booking prices starting September. So, the result is that the Guests will not be “paying the same amount” but instead will be taxed on the increased amount we Hosts adjust our nightly prices to.
This is about Airbnb wanting to hide from guests the high booking fee when you book through Airbnb. I have activated the auto adjustment and will see if it works out correct after the first booking. I add a 5%n default insurance to Airbnb prices as when they allow guests to pay later and the guest defaults, Airbnb passes the cost to me. So I need insurance fund to cover this. Also we are a snow resort and our main season is short. We need 30 day cancellation so guests do not cancel a few weeks out when the forecast does not look good. However Airbnb no longer allows 30 day cancellation. Maximum is 15 days. So we load Airbnb prices by 20% in High season and 15% in shoulder season to off-set this. Otherwise Airbnb pricing would be undercutting other platforms and our own website on conditions/price balance.
2 Likes
Hmmm. Seems like a lot of work to hide from something that’s already pretty well hidden.
You may not be aware of it, but Airbnb implemented the “total price” scheme some time ago. The “sticker price” shown on your listing now includes all taxes, fees and extras (it’s always been that way here in Europe but Airbnb decided to implement it globally, last year I believe).
Anyway, the fee that the guest pays is already buried in the price. Any attempt to further bury it would be frankly, a wasted effort.
On the face if it, it appears to be just another simplification of the system, and to become more consistent with the way this business is conducted globally.
And frankly, as long as hosts just compensate properly, there’s no tangible difference. For the vast majority of hosts and guests, it’s as if nothing happened.
1 Like
You should be able to see if it is correct even before you get a booking just by selecting some dates on the calendar and seeing what the price breakdown comes up as. I think it should show the total and then what you actually earn?