Airbnb’s new approach for professional host outside of North America is the inclusion of service fees in the rate presented to guests which is exactly how the company’s rivals operate.
Airbnb is requiring most professional hosts outside North America to include all service fees in the rate presented to guests, a move that mirrors how rival platforms operate.
With the new implementation, hosts will be able to make use of third-party software in order to manage bookings and eliminate the “service fee” which is being paid b guests that is traditionally tacked on to the price list
With that, hosts will pay a standard fee of 15%, up from the typical 3% they are assessed now.
Reuters interviewed a number of hosts who stated they will raise their listed prices in order to account for the larger host fee.
The new fee structure comes as the San Francisco-based home rental platform prepares to sell shares in its initial public offering this week. Airbnb said early tests show the simplified pricing helped drive 17% more bookings.
“Following feedback from hosts we recently introduced a simplified host-only fee structure for professional hosts who connect to our API in certain countries,” said Airbnb spokesperson Christopher Nulty. “Our fee structure for individual hosts remains unchanged.”
Airbnb declined on making any company due to negative feedback from hosts about the new changes calling it a quiet period before the company’s IPO.
The fee change has been communicated to professional hosts but not reported widely.
Airbnb began with hosts renting out air mattresses in their homes. A former Airbnb host acquisition specialist told Reuters “individual hosts are good for PR.” But hosts managing hundreds or thousands of properties drive an outsized portion of revenue.
By the end of September about 10% of the Airbnb’s hosts were professional managers who account for 28% of nights booked based on the Airbnb’s filings.
Management software platform Uplisting’s CEO Vincent Breslin said hotels and professional managers of multiple properties have asked for the change to make it easier to list across different platforms with one sticker price.
“Having fee parity across all platforms is a benefit to all,” said Ryan Danz, CEO of Air Concierge Inc., which manages about 500 properties. “It makes a better apples-to-apples comparison for the traveler if they find the same home listed on various websites.”
But some smaller property managers are worried the change could hurt them if they can’t raise prices enough to cover the increased host fee.
Airbnb is part of the companies hit hard due to the COVID-19 pandemic that has resulted in numerous people shutting their door as a precautionary measure to prevent themselves from contracting the deadly coronavirus.
Johnny Buckingham, who manages nine listings on Airbnb across the U.S., said he would not want to raise his listing price to cover the increased host fee and believed Airbnb was discouraging hosts from using software to cross-list on other platforms.
“They’ve made their message clear. Stick exclusively with us or pay us 5x as much,” he said.