Airbnb’s new ‘Simplified Pricing’ removes the guest service fee and adds it to the host fee
October 23rd, 2020 - Up until summer 2020, most Airbnb hosts were paying a 3% to 5% service fee to Airbnb for each reservation. Guests were also paying a service fee to Airbnb in the range of 11% to 12% of the booking value.
The new simplified pricing means that hosts now pay both fees combined, and Airbnb will still retain the same amount of money for each booking.
This fee model is not entirely new as lager property managers had previously been offered the option to switch to the host-only fee. However, this latest move means that this will now become mandatory for all hosts.
Airbnb claims that the new service fee structure (“Simplified Pricing”) will allow hosts to have a more accurate pricing strategy as they will be able to set what the guests will pay. They also claim that having no guest service fee makes the hosts properties more attractive to guests and where hosts have adopted simplified pricing they have seen a 17% increase in bookings.
Critics suggest that guests will ultimately pay the same price as most hosts will simply increase their rental rates to cover the additional fees. The increased host fees follow shortly after the storm of criticism from hosts who felt that Airbnb abandoned them by unilaterally enforcing refunds on hosts during the initial Covid-19 outbreak back in the Spring.
For the moment, only connected hosts are affected. Smaller, non-connected hosts may not be affected as Airbnb has promised to get back to its roots and to favour smaller hosts. For the highly vocal community of smaller Airbnb hosts, forcing them to switch from a 3% to a 15% fee may amount to a hostile move that would create a lot of noise right before the upcoming IPO.
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Karen Lake - Senior Contributor
Karen is a senior contributor at TravelIndustryReporter.com and brings with her a wealth of knowledge about the travel industry. Karen is a native of the USA and has held various media and PR positions over the last 10 years. Karen is a graduate of Washington State University.
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