What is Simplified Pricing?
- Historically, Airbnb has had a Split-fee structure for all hosts, in which a service fee is charged to both the host (3%) and the guest (14.2% in most cases)
- Airbnb commission models
- Split-fee = Host pays 3% and guest 14.2%
- Host-only fee = Host pays 15%
- In 2020, based on feedback from many professional hosts, Airbnb launched a Host-only fee option for software-connected hosts to remove the guest service fee and provide hosts with more control over their rates
- This fee structure is known as Simplified Pricing
- Simplified Pricing (15% host fee) will be the only available fee structure to all software-connected hosts on Airbnb globally
What does it mean?
- If you are currently using a Property Management System like Hostaway, Airbnb will deduct a flat 15% host service fee from each payout and won’t charge a guest service fee
- If you have never used a Property Management System or Channel Manager before that uses API integration with Airbnb, and start using Hostaway, when Airbnb integration is done, you will most likely be automatically converted from Split-fee to Host-only fee
- Is it mandatory? Yes, with some exceptions
- This fee is mandatory for traditional hospitality listings such as hotels, serviced apartments, etc., as well as software-connected hosts unless most of your listings are in the USA, Canada, the Bahamas, Mexico, Argentina, Taiwan, or Uruguay) Source: Airbnb service fee
- To manage the service fee on Airbnb because you are within the exception:
- Go to your Airbnb Dashboard > Click on the Account Picture > Account
- Click on Price and Fees> Service Fee
Airbnb Benefits
- Simpler Pricing Strategy
- You will know exactly how much a guest is paying
- There is no guest service fee added to your rates which makes your listings more attractive
- Listings with Host-only fees convert better than Split-fee
- Increase SEO ranking in Airbnb
- Even if you markup your rates, guests will still pay very similar rates (sometimes even less) than they did under the split fee model
- You can keep your prices competitive across channels and see an overall increase in bookings (~17%)
Hostaway Benefits
- Markup tool - easily adjust your prices to account for the new Airbnb fee structure
- Direct Bookings - use the Hostaway booking engine to capture direct bookings and avoid channel commissions
- Expand to other channels and increase overall revenue
- Manage all channels from one unified dashboard
- Use the upsell tools to drive more profits
- Use the Guest Book and Coupons to encourage past guests to book directly next time
- Give Users full transparency with the Owner portal and owner statements
Please note that the following property types will automatically change to Host-only service fee upon connection: aparthotel, bnb, boutique_hotel, farm_stay, hostel, hotel, lodge, timeshare, minsu, casa_particular, pension, pousada, resort, ryokan, heritage_hotel or serviced_apartment. Make sure to confirm what your service fee is after the connection.
How to Prepare
- Add your ABN/VAT number. To prepare for this change, please make sure that you have added your VAT information to ensure Airbnb does not withhold VAT/GST on your host fee on Airbnb. Add your VAT number here
- Adjust your rates (if needed). Since a larger service fee will be deducted from your payouts, you may want to adjust your prices through Hostaway to cover the difference to ensure your earnings don’t change. Before adjusting your prices, keep in mind that it’s important to stay competitive. Most of our clients use a markup of 15%
- Cleaning Fees. Airbnb charges 15% of the total value of the booking (Nightly rate + Cleaning Fee). You may want to adjust your cleaning fee as well
- Inform your owners. It is important to let your owners know about these changes and explain the benefits of using Hostaway. Our platform is designed to help you increase bookings, improve guest communication, and give the owners more access and transparency