Up until fairly recently Airbnb charge 3% fees to you, the host, and fees of between 12 to 20% (roughly) to guests. A 3% host fee is what most of us know and feel comfortable with.
The host fee is changing for some hosts in some locations who use an official Airbnb software partner like Uplisting. Unsurprisingly there's been some confusion...
How do I know if the new host service fee applies to me?
If you use official software and are not located in the United States, Canada, Mexico, Bahamas, Argentina, Taiwan or Uruguay, then you will be forced to use the new host service fee of 15% from December 7th.
How can I tell if I'm using official software?
Go to the Privacy & Sharing page on your Airbnb account (here). If you see a connected app with the same 'access' as you can see in the screenshot below with Uplisting, you are using official software.
Side note: If you are using some software that doesn't appear here, you are not using official software. Unofficial software can be unreliable and a security concern.
I am in one of the locations mentioned and want to implement the new host fee
If you are in the United States, Canada, Mexico, Bahamas, Argentina, Taiwan or Uruguay then the new host only service fee is not forced on you, however, you can opt into it if you'd like.
What impact does this have for guests?
Guests may pay less
Taking a (simplified) example 10 night stay where you charge $100 per night. This is a total of $1,000. With the old service fee your guest could pay a maximum of $1,200 (ie. 20% guest commission). You pay $3 (ie. 3%) and earn $970.
Assuming you increase your prices by 14% to display as $1,140 to your guest and that is what they pay. You pay 15% commission ($17.10) and earn $969.
In this very simple example your guest pays $60 less and you earn the same.
Airbnb search results
One of the biggest concerns with the new service fee is listings with the new service fee should appear as having a higher total price than those without. The reason being Airbnb doesn't take their service fee into account in the search result total value.
However, this may not be the case. It's difficult to sate this as fact as Airbnb are constantly running experiments and what I see on search results may not be the same as what you see.
In the screenshot below I'm searching for accommodation in New York (and I am located in New York). The first listing uses the new host only service fee and the second listing is using the old host and guest service fee. Here you can see the total shown in the search results is the same as that shown on the listing page when you click through to book.
In certain countries Airbnb must show the total price without any hidden fees (eg. Europe). However, if this is now the case across the board then the concern your listings will appear more expensive in search results is not valid.
What do I need to consider?
Is this new fee good or bad?
According to Airbnb, this change is very positive for you, if you are connected via channel manager like Uplisting (ie. an official partner of Airbnb). Hosts reported a 21% increase in bookings on this new fee structure (according to official Airbnb analysis).
How is this good?
- Prices could be cheaper for guests, without impacting your revenue.
The total Airbnb fee with the new structure is 14%, the old fee can reach 23% (3% host fee + a maximum 20% guest fee).
- Guests aren't put off by hidden fees.
All host listings using the new host fee show up as 0% service charge to the guest.
- Boost Airbnb rankings (theoretically)
Airbnb tend to promote listings that implement changes that are beneficial for their business.
Are there any downsides?
Yes, potentially. The major downside to the service fee change is in locations where the total price in Airbnb search results does not include the Airbnb service fee.
This means the total price for those using the new commission structure will appear higher in search results than those not on the new commission structure. Airbnb will need to change this before this new service fee is adopted by everyone.
If/when they change this, those on the new service fee commission structure will be at a significant advantage due to more competitive pricing. In addition, you need to take into account any search algorithm weighting Airbnb will put on host listings using the new service fee.
But my host fee goes up from 3% to 15%
This is true. To counteract this you need to increase your prices on Airbnb to take this greater fee into account. Bear in mind the price your guest will pay will be roughly exactly the same, or less.
What about the 17% fee?
Airbnb collects an additional 2% service fee on all bookings of listings with a SuperStrict cancellation policy. This means you will pay a 17% fee if you use the new host only fee with a SuperStrict cancellation policy.
Sign up early if you have to
If the new Airbnb host service fee is being forced on you, implement it now and save 1% on fees until January 2021. Airbnb have a special offer of 14% for early adopters up until Jan 2021.
What are Airbnb saying about this?
Here is a snippet of an official announcement sent to Uplisting by Airbnb:
After December 7, 2020, split-fee pricing will no longer be available to most software-connected hosts. Split fee pricing will only be available to software connected hosts with a majority of their listings in the United States, Canada, Mexico, Bahamas, Argentina, Taiwan and Uruguay.
- The service fee structure will change for software-connected hosts, unless the majority of their listings are in the United States, Canada, Mexico, Bahamas, Argentina, Taiwan and Uruguay.
- We’ll deduct a flat 15% host service fee from each payout and won’t charge a guest service fee.
- Existing bookings won’t be affected, but this change will apply to all bookings made after December 7, 2020.
- Hosts already using simplified pricing will have a 14% service fee until January 1, 2021. After that, their service fee will increase to 15%.
Here is Airbnb promotional material about this change
Here's the announcement Airbnb sent us the other day. We are an official software partner so get a heads up to upcoming changes.---