In December 2020 Airbnb introduced a new service fee structure that obliges Lodgify customers connected to Airbnb via API to change their way of charging a service fee to the guest. In the following, we will explain to whom this change applies, what the differences are to the traditional service fee model, and how to adjust your rates if necessary.
💡 Note: The host-only fee applies:
- As soon as you connect your Airbnb account to your Lodgify account via API, even if the synchronization has not yet been set up.
- If a traditional hospitality listing (such as bed & breakfast, hotel, or serviced apartment) exists in your Host Account, Airbnb will automatically switch your account from the split-fee to the Host Only fee.
Read about:
- What are the two service fee strategies
- Who is affected by Airbnb's host-only fee
- What are the differences to Airbnb's traditional service fee strategy
- Actions to take
What are the two service fee strategies
Airbnb's traditional service fee model was based on split-fee pricing. This means that with for booking, the guest pays a service fee (between 12-20% of the booking price), and sometime the host used to pay a small amount (around 3%).
Now with Airbnb's new simplified pricing, there will be no visible service fee for the guest.
Instead, the host will pay 15% of the payout to Airbnb.
Who is affected by Airbnb's host-only fee
All Airbnb accounts that are connected to a 3rd party software such as Lodgify via API have to move to the new simplified pricing model and can no longer keep the traditional model. If you are connected via iCal, or if your listing is based in one of the following countries, you can still choose which pricing structure you prefer.
💡 Note: If you have listings in several countries and the majority of your listings are based e.g. in the US, you can decide on the pricing model. If you have the same number of listings in the US and in Europe, you will need to use simplified pricing.
Countries that are currently exempt from the obligation to use simplified pricing:
- US
- Canada
- Mexico
- Bahamas
- Argentina
- Taiwan
- Uruguay
What are the differences to Airbnb's traditional service fee strategy
With Airbnb's traditional split-pricing strategy it is difficult for the host to know how much guests are actually paying for their stay, as Airbnb's service fee varies between 10%-20%. With the new simplified pricing, hosts have full control over the price guests are paying.
We will look at an example to understand the differences this pricing change makes in the amount the guest pays, and the amount the host earns.
🔎 Example: Let's compare a stay with a room rate of $400 and a service fee of 15%.
The numbers in the above table show that you can use the simplified pricing to your advantage and earn 3% more on each booking by raising your rates by 15% but keeping the price that the guest pays the same. You will need to decide for your business if you want to use simplified pricing as a competitive advantage against similar listings, or simply give a small boost to your revenue.
⚠️ Important: The 15% service fee is chosen for the example, but the service fee for your property depends on a variety of factors such as your location, the length of stay, the traveler's country, etc.
Actions to take
If you still want to use the traditional fee model (not the simplified pricing model but the split fee model) and you are not connected via API and/or based in one of the previously mentioned countries that are exempt from the change, you can check with the Airbnb Support team that you are still using the Traditional fee model.
While in Lodgify, in order to adjust your Airbnb rates according to these changes and keep your final payout from Airbnb the same, you will need to increase your rates' mark-up in Lodgify. To do so, you can head to your rental's Sync Settings page. Learn how to edit your mark-up.
💡 Note: Mark-ups only apply to the room rate. Fees are not affected by mark-ups.