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So UK hosts are now all moving to simplified pricing in a couple of months. I know this has been discussed before as regards how to adjust prices to ensure the payout remains the same, but I wonder whether those of you already moved to simplified pricing have any experience to share on how refunds to guests now pan out when they don’t actually pay any fees, so does a full refund penalise hosts? Or does Airbnb accept no fees in full refund situations? Maybe it is no different to currently and I am overthinking it.
I am also wondering whether there is any change to how guests rate the ‘value’ review category when they believe the full price is taken by the host rather than split obviously between host and Airbnb…
I am on split fee and there is no change forcing hosts to go to simplified where I live, but I have been wondering the same thing about how refunds work when the host has shouldered the entire host/guest service fees.
I do know that Airbnb usually doesn’t refund the service fees to guests who cancel more than 24 hours after booking, and do refund them if the host cancels (without an accepted extenuating circumstances penalties exemption), so it would seem that a host on simplified pricing should be doing the same.
But I can imagine that would lead to many more arguments with guests, as they no longer see that it is Airbnb who isn’t refunding their service fees and would hold the host responsible for their loss.
I fear that Airbnb pushing all fees onto hosts is simply a way for them to make more money at the same time as reducing/removing their current bad guy position in the eyes of guests. The issue for refunds is that guests are no longer paying any service fees and therefore the total they pay is what they would expect to be refunded. Fees are an entirely separate contract between host and Airbnb, much like any other financial banking cost or advertising contract. That is certainly how I would see it as a guest. I cannot see for one minute that Airbnb would change a system simply to ‘make pricing easier for hosts’ without it safeguarding and increasing their own revenue.
The other annoying thing about this move is that it raises the gross turnover, without increasing the net, which is not entirely helpful.
Totally agree with you- this is all about Airbnb hiding its service fees from guests. Nothing to do with what is desireable from a host or guest’s standpoint.
Maybe hosts on simplified should make it clear to guests somehow, that the fact that they are not seeing a separate service fee on their bookings does not mean they aren’t paying service fees- that the pricing model you were forced to use incorporates the approximate 14% (or whatever it works out to be) service fee in the total price, and that goes directly to Airbnb on the guest’s behalf- it isn’t a service fee charged by the host, nor retained by the host.
I’ve always wondered why people believe that. Split fee varies slightly from region to region, but in my region it’s 3% host and 15% guest. That’s 18%.
Single fee is 15.5%, obviously a bit less than 18%. So Airbnb isn’t making more.
So, if you simply raise your prices 15.5% to compensate for the commission shift, then the total price paid by the guest remains the same, but the host actually nets a few cents more. And Airbnb gets a little less commission.
And really, most guests couldn’t care less what Airbnb’s commission is. They look at the photos, location, reviews and the price. If that suits them, they book it.
Also, this may be a cultural thing, but over here, if the advertised price suddenly becomes much higher at payment time, it’s considered a “red flag”. Profiteering . Possible scam. Avoid.
With regard to refunds, Airbnb almost always gets their commission one way or another. Who pays it depends on who cancelled and for what reason. This doesn’t change that.
I believe this is more about becoming consistent with other platforms, which all use the single fee commission structure. This was the main reason I switched to single fee; It’s easier to price the same across platforms. But surprise! It also produces a slightly higher net.
That isn’t correct- a host has to raise their price by over 18% to come out with the same profit. That math calculation was posted by another poster here, who explained it, but as I am on split pricing, I didn’t bother to make a note of it. But I’m sure if you do a topic search here, you can find it.
But Airbnb shows the total price now, aside from taxes, so regardless of whether the host uses split or simplified pricing, the guest sees the same price. The difference is, that on simplified, they don’t see that they are paying any service fees.
And I don’t agree that guests aren’t interested in that. Some may not be, but some are. They are certainly interested in how much they will save in service fees if they are a repeat guest who you’ve told can just book direct with you next time.
And personally, I want to see the breakdown of what I am paying for, whether it’s an airline flight, or an accomodation, or a phone bill.
It’s not a matter of value, it’s a matter of transparency. On simplified pricing, it looks like all the money the guest is paying is going to the host, the guest doesn’t see that Airbnb is scooping 15.5% of it.
When this first started, people were arguing that they’d have to raise their prices and become uncompetitive, and Airbnb makes more commission. But the numbers proved that the price is the same and Airbnb actually makes less, and the host makes slightly more. So nobody’s arguing that anymore.
Then it was what lizardsinthekitchen opened this with: the value argument. But as you point out, value isn’t the issue. Price is the same, value is the same. Hard to argue that.
So now it always comes down to the “transparency” argument.
So ok, before I book something on Booking.com should I always ask how much commission booking.com is charging them? Maybe ask them for a summary of their per night operating expenses? It’s only fair that I know this prior to booking, right?
Although if a guest inquiry asked me these things, I’d sense it as a potential “problematic guest” red flag and likely refer them elsewhere; Thanks but no thanks.
Should I do this when I buy milk too? Demand a summary of the production costs, transport, marketing and distribution costs, how much tax they pay, and stuff like that? I’m entitled to know, right?
You’re comparing apples and oranges. Asking a host for a list of their expenses would be prying into someone else’s finances. Being able to see a breakdown of various charges on a bill one pays is a completely different thing.
Are you aware that many companies- phone companies, electric companies, communications providers, airlines, etc., sometimes tack on charges sometimes known as junk fees?
Also there is the “opt-out” scam. You are charged for things that are optional and have to opt-out of them, rather than opt-in.
That in many cases, they bank on consumers not paying close attention to their bills?
For instance, the main phone company in the country where I live has been caught adding some sort of extra charge (insurance or something strange) to bills. It’s only a few bucks, so many customers wouldn’t notice- it’s not like their monthly bill doubled. But when customers have questioned the company about this charge, the company removes it, because it isn’t something they can legally force customers to pay.
And here is a personal example of why pricing breakdowns/transparency is necessary.
International flights into Mexico have a “Mexican tourist tax” as part of the price. But if you are a legal temporary or permanent resident, you are exempt from paying this. In most cases you have to contact the airline and submit a copy of your residency card, then they refund the tax you paid.
I want to see the breakdown of the airline ticket so I can see how much that tourism tax is and make sure I am refunded the correct amount.
If you’ve actually had guests decline your Airbnb specifically because of taxes, fees, or platform charges, I’d be interested in seeing real examples.
In particular, I’d pay attention to messages where someone says they love the place and were ready to book—but then backs out over something like the cleaning fee.
In my experience, that’s usually a signal of a bigger issue. It suggests they don’t really understand how pricing works on these platforms, and more importantly, they may not be the kind of guest you want to host in the first place.
Having read quite a few guest posts over the years, this does happen, but the circumstances have bearing over whether a guest who does this should be considered a red flag. What I’m talking about are listings where a scammy host tries to reel in guests by advertising a very low nightly price, but then tacks on an outrageously high cleaning fee.
Airbnb showing guests the total price would seem to throw a wrench in this type of misleading advertising.
I was responding to Rolf’s post re a guest backing out over a fee that isn’t shown up front.
My objection to non-transparency in how much of the price is Airbnb’s service fees stands.
It’s 18% with split fee, 15.5% with “simplified”. You can also see this in the price breakdown in the booking.
But the advertised price that the guest sees now includes all charges - Airbnb commission and cleaning and all other fees. So, your price is no longer shown as significantly less that what the guest actually has to pay, so bait and switch is no longer possible.
But that has nothing to do with split/simplified. It’s the same either way.
I disagree that price = value. Airbnb also disagrees with you. In their questions to guests during the review process, on the ‘value’ criteria, they specifically ask ‘was it worth the price you paid?’ They evidently understand that there is a very personal and subjective response to the factual price that they paid up front presumably by choice because it was acceptable to them.
My concern on value judgements is that it might change between a reasonable nightly rate plus an explicit airbnb fee and a single much higher nightly rate. It doesn’t matter that the overall total is the same. No one cares about hidden costs to hosts or indeed even considers them. As far as guests are concerned, the nightly rate is all profit to hosts, who with this shift by Airbnb are now extra greedy hosts, whilst the previously greedy Airbnb is now miraculously not charging guests a single penny.
But it’s great to hear that guests still give 5 star value ratings just the same for simplified pricing as they do on the split fee model. And that Airbnb refunds or pro ratas (as necessary) the fees hosts pay under the new model just as they do on the split fee model.
As for hosts’ value, the price I will be paying to Airbnb is over 400% more than currently, but with zero increase in the level of support and partnership. In actual fact there will be a decrease in benefit when the promised number scrambling comes in. On paper that doesn’t seem like an amazingly great value deal to me.
I just slightly resent the whole thing being dressed up as ‘making life better for hosts’, when it is entirely about making Airbnb more attractive to guests.
I’m glad that finally there’s a level playing field. With the dreaded cleaning fee as well as the other costs lumped into the nightly rate, there’s no longer a way for people to lowball their nightly rate and a big Cleaning fee, so their advertising on the website is more in line with what I’m charging.
While I agree with most of your sentiments, the above is not true- the guest is still paying their service fee, not the host.
It’s as if someone you know owed your brother $50, you ran into them at the grocery store, and they said, “Oh hey, Lizards, I borrowed $50 from Frog last week, but I’m going on vacation tomorrow, can you pass this $50 to him for me?”
The $50, even though it was in your wallet for couple of days before you saw Frog and gave it to him, wasn’t yours to start with.
And I don’t see this as Airbnb making things more attractive to guests, as guests see the total price, regardless of whether the host is on split or simplified pricing. This is about Airbnb trying to eliminate guest complaints about seeing a Airbnb service fee of 14.5-20% on their bookings.
[quote=“Lizardsinthekitchen, post:18, topic:64518”] My concern on value judgements is that it might change between a reasonable nightly rate plus an explicit airbnb fee and a single much higher nightly rate. It doesn’t matter that the overall total is the same. No one cares about hidden costs to hosts or indeed even considers them. As far as guests are concerned, the nightly rate is all profit to hosts, who with this shift by Airbnb are now extra greedy hosts, whilst the previously greedy Airbnb is now miraculously not charging guests a single penny.
[/quote]
This could definitely be true in areas where some hosts are on split fee and some on simplified. But if all hosts in the UK will now be on simplified, guests are going to see the higher prices on all UK listings, so you would not be disadvantaged in that way.
