Burden of service fees shifting further to hosts?

[Lisa723]

http://www.vhrnetwork.com/news.13

[Sarah977]

@Lisa723  Good article. Totally agree- obviously we would all have to raise our rates proportionately to cover paying all the fees. Any host who doesn't would soon find it not worthwhile to host. Smoke and mirrors indeed.

[Francesca-and-Dave0]

Interesting article. Thanks for he link!

This is where one would HOPE the traveling public is well educated and savvy enough to realize that no matter HOW the fees are dispersed, GUESTS are still paying for them!

Transparency in pricing, which ABB used to have, is a rare thing in the world of traveling these days, but I continue to believe consumers should demand it.

Its possible such a change in fee structure is in response to the many hosts who are moving away from on-line booking sites like VRBO and ABB due to disgust and dissatisfaction with their ploys. We are moving more and more of our bookings through our own web site and local Chamber of Commerce. There really is very little — to none at all — advantage or reason to use ABB or any of the other listing sites anymore for hosts who have established their own clientele. In fact, I’m hearing more and more guests — as well as hosts — are disliking the “new” ABB so that Air BnB may become an “off brand” and a detriment to some hosts who can survive without it.

[Ben551]

It was a while ago that this change was rolled out to some parts of the world...

Do you all have it available yet?  It's meant to be under Profile, Account Settings.

It reminds me of a picture I once came across that showed how the "Airbnb invention" of guest fees compared to other platforms.  When you stand back and admire this picture, you'll eventually come to the same conclusion I did.  Compared to Booking.com, it means Airbnb hosts are still paid the same, but the difference is Guests receive transparent pricing.... because Airbnb invented a thing called Guest service fees as a means of confuzzling guests into thinking their prices were cheaper.  It's a clever tactic to grow a new platform, I'll give them that, but it doesn't translate to more money for hosts. 

It doesn't matter how you cut it, guests pay all these fees and hosts are paid the same.  But one way is transparent for guests and one isn't so much...

[Lisa723]

@Ben551 yes I know it's been an option for some hosts (not me) but I would never do it voluntarily. If/when I am forced into it, I'll disclose the fee I am paying Airbnb on the guest's behalf in my listing. I thought Airbnb was terrific when I started hosting (still think so) and didn't seriously consider other platforms but with each new roll-out increasing Airbnb's self-serving obfuscation and/or hassle I'm more and more motivated to shift my business elsewhere.

[Ben551]

@Lisa723  you may be interested in a new platform that is entirely fee free, forever. 

Have a search for Agoda.  They are part of the same group as Booking.com (i.e. Booking Holdings Inc) but they have launched their new 'Homes' platfform, which is here: https://www.agoda.com/#homes

It looks like a fast growing new platform, although unclear on anything around insurance or guarantees for hosts.... from what I can see it's a pure booking platform, like Lodgify, but fees free with no insurance or guarantees attached.

[Lisa723]

@Ben551 I've tried but they don't support hosting in the US (yet).

[Inna22]

@Ben551 it is against booking.com terms to price your listing higher than other sites. So you would have to be $100 on their site and well and take home $84. Thus more listings on Airbnb.  At the end of the day you get more bookings, more money

[Ben551]

@Inna22  They go on the listing price including all fees though, not the price excluding fees.  This has come up before.  Even "Alltherooms.com" has added in the mythical creature that is "Airbnb invented guest fees" so people can see things side by side.  Before they aligned, it was showing Airbnb prices as ficticiously lower... when they weren't.

[Branka-and-Silvia0]

in some countries we have to pay VAT on top of the service fee (25% in Croatia) ... and if our gross earnings are higher then XX€/year we can't pay annual tax per bed but have to do books (hire an accountant)  So our nightly prices would go up for much more than 14%

 low service fee is one of the main reasons I am on Airbnb and not on Booking.com

[Branka-and-Silvia0]

... and... those 14% would apply to the subtotal which includes nightly price + cleaning fee + any additional guest charges !!! ( now, we pay 3% of the nightly price only)

[Olivier291]

@Ben551 ,

Yes but you forgot to mention (income) taxe. Here in France taxes are calculated on the gross earning amount (nightly rates) so even if for guests it doesn't change, for hosts it does.

Based on your example & an average of 20% tax:

- with Airbnb I get [100-3% fee]-20% of 100= 77€. - with BDC I get [100-3% fee] - 20% of 116 = 73,8€

Based on a 14% host fee it would be the same for guests since the additional taxes would be erased by the lower Airbnb fee (14% vs 20%) and the final price paid by guests would still be 116€.

But if the Airbnb fee would be raised to 20% in a second time as the article suggest I would need to increase my rates up to 130€ to maintain a 77€ earning (edited after reading @Branka-and-Silvia0 comment as I forgot the additional 20% French VAT on service fees) which means 12% more for guests

And I just mentioned income tax! French touristic taxes is now 3-5% of the nightly rate (new rules since 2019) per day and per guest...

[Branka-and-Silvia0]

@Olivier291  don't forget - now host fee is calculated on nightly price only. If host except to pay guest fee then it would be calculated on nightly price + cleaning fee + any additional charge for guest!  (see small print at the end )

[Emiel1]

I never experienced a service fee of 20% on my listings.  It fluctuates between 15 and 16%, for long term stay  (28 days and longer) it is appr 11-12 %. I think it is reasonable for guests. The platform and the organisation can not excist for free. Also 3% host service fee (+ VAT) is IMO no wasted money as Airbnb is working for me. I have other channels to get my accomodatios occupied (like private website), but it generates much extra work.

[Jessica-and-Henry0]

Thanks for sharing the article @Lisa723 

I honestly don't care what they call it........ but regardless of the the name and who they (seem to) charge..... ABB will always get their cut from bookings. 

I adjusted my rates so that my payout is at least a certain sum while the guest payment including fees will be within a certain range and I work under the assumption that the difference between what I recieve and the guest pays is about 13~18%. This is based on information I recieved from previous guests. 

Whatever they call it......I'd just like more transparency and consistency on the pricing so EVERYONE knows what the guest pays vs. the sum of all fees that go to ABB vs. actual host payout.