More than ever, seeing the rate you’ll actually pay from the start matters – a lot.
In cities like New York, travellers are presented with rates of $150 per night, only to find out that the figure doesn’t include nightly taxes of nearly $50, and also “resort fees” up to $45 per day in addition. Suddenly, that $150 per night becomes $235, and a$300 all in stay for two nights is peaking to $500. It’s frustrating, and inevitably leads to clicking away and starting again.
Recognising this important trend, Airbnb has launched a new fee structure, which could make the game changing experience of home sharing even more appealing…
Airbnb’s New Fee Structure
When you make a booking with Airbnb, you’re hit with a “guest fee” of 20%. It turns a great rate into a good rate. At the same time, hosts also pay a 3-5% fee to Airbnb for commission. Starting June 4th, 2019 people who manage Airbnb listings will have the option to switch to a new Airbnb fee structure charging a flat 14% fee which includes guest charge and the Airbnb commission. It’s basically a single fee that covers things in a clear and concise manner.
The first thing to note is that this isn’t mandatory for any present listings, and the second is that it won’t apply to America, at least not yet.
The move affects properties in Europe, Middle East, Africa and Asia with the exception of Japan. Basically, a host can still list their property the way most are currently seen, where you see a “nightly rate” but don’t see the actual rate with the 20% and other fees added in until a later booking stage.
Why a host would choose to frustrate guests by not showing the all in price from the start would elude many minds.
Some might say that the guest fees are not in fact being eliminated, but instead repurposed. In a way, that’s fairly true, but considering that Airbnb will earn an effective 14% cut on bookings versus 25%, it is a strong way to bring even more on boarding to the platform while becoming more user friendly for price conscious travellers who just want a true price.
Price Transparency Is Everything
Make no mistake: no one is saying Airbnb rates are necessarily going to drop. What people are saying however is that you may see a rate much closer to what you actually pay, from the very start.
In a way, the rates may technically jump, as hosts bundle the 14% into their base price, but on the other hand, we as consumers just want to get to that final “what do I owe you”, and this is an extremely significant step. If a host jumps their listing up 14% to cover the new fees, that’s still 6% lower than the 20% consumer currently pay.
This move (effective tomorrow) comes at a fascinating time, as hotel “resort fees” have spread in epidemic fashion, even in urban centres where the idea of a “resort” is anything but. The more people hate resort fees and lack of transparency, the more it will push the sharing economy to go the other way. At least, with any hope.
“Why a host would choose to frustrate guests by not showing the all in price from the start would elude many minds.” It’s not difficult to figure out why, and it’s exactly the same reason that hotels are adding these junk fees – a proportion of the population can be fooled.
Until countries enact legislation saying that the price displayed has to be the price paid, the practice of hiding fees will continue.
And, let’s not beat about the bush – AirBnB could simply add the fee it charges to the price of the rental when it displays the property. The fact that it chooses not to, and instead wants to pass it on to the host, speaks volumes.
I don’t even consult Airbnb anymore. The price of hotels is cheaper and more straight forward most times. I hate the game of oooh a $65 /day rate then when you go to book it says your total is $300 for 2 nights. And now that some can chose a more up front pricing but you don’t have to, only makes it harder know what you’re getting. So I could see a $65/day price that really costs me $150/day but on the same page see a $100/day price that includes more fees and only costs me $130 total. Geez that is a hassle.
Good step from airbnb. Now, they should ALSO be upfront about their cancellation ‘fees’. Each listing states their cancellation policies, some more strict than others. Fine. But what airbnb FAILS to clearly state is that their booking fees are NOT reimbursed.
I thought the fee was 10%.
Over the last year – For American bookings, I’ve switched to Homeaway. While I’m not sure on the exact fee structure – I do know that in cases where the same home is listed on both Airbnb and Homeaway – I end up paying less out of pocket with Homeaway. I’ve also noticed this year, that in some areas of the US- Homeaway is by far the more popular option, with more homes available for rent. Key West, FL would be a recent example, where I found much more variety available outside of Airbnb.
For Europe: I stick with Airbnb, as it’s still the best option.