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Adjusting rates for Airbnb’s service fee changes: Host-only service fee structure

By August 31, 2020 December 2nd, 2020 No Comments

As many of you might be aware, Airbnb is changing how service fees are calculated for listings across markets. This change has already happened across many markets and for others it’s happening soon.

Airbnb is moving to host only fees, and what that means is that they will deduct a flat 15% host-only service fee from each payout and will not charge guests a service fee. 

This change can have a material impact on your earnings as Airbnb will take larger fees from hosts. Thus, we recommend adjusting your rates to accommodate for this change.

Please note that this change does not affect guests as much because the total to pay will not change materially. 

If you are:

Connecting PriceLabs directly to Airbnb

If you are connecting PriceLabs directly with Airbnb, we recommend raising your base rate and minimum so that your payout does not change materially.

  • Your new base price should be (Current Base price)*(1-previous host fees)/(1-new host fees).
  • Your new minimum price should be (Current minimum rate)*(1-previous host fees)/(1-new host fees).
  • Please make this change in PriceLabs – so that your payout does not change. 
  • You should also adjust any fixed price overrides or fixed price customizations that you have.
  • You can also adjust your maximum rate by the same amount.

Here is an example: 

Before you were paying 3% fees, and guests were paying 12% fees. Your base rate was 100 EUR.

Now, your new base rate will be 100*(1-0.03)/ (1-0.15) = 114.1 EUR 

Or, in other words, you’d increase your base rate by 14.1%

Using PriceLabs with a PMS and setting a markup for Airbnb

If you were setting a markup in your PMS (full list of PriceLabs integrations here) for Airbnb – you most likely made this markup equal to the host fees that Airbnb was charging from you. You want to adjust this markup to accommodate for new fees.

Here is an example: 

Say before, you were paying 3% fees, and guests were paying 12% fees. Your base rate was 100 EUR.

So, if previously, you were setting a markup of 3%, you’d want to put a markup of 15% now. 

Using PriceLabs with a PMS but your PMS does not allow you to set a markup for Airbnb

You should increase minimum and base rates in PriceLabs as per the formula explained in the section above – “Connecting PriceLabs directly to Airbnb.”

But additionally, you would need to adjust the markup for other channels. Otherwise, prices would increase for those channels. If you need guidance on this – please feel free to reach out to us, and we will guide you on how to adjust rates and markups.

If you have questions about any of the above, please feel free to write to us, and we’ll get back to you ASAP.

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