Airbnb: Understanding Commission models
As of Tuesday 4 June 2019 Airbnb introduced a new commission model in line with industry trends.
Information from Airbnb:
- A host-only fee of 15% will be required for all new* traditional hospitality hosts connecting to Airbnb (except in Japan).
- Property managers will have a choice of a host-only fee of 14% or a shared host and guest fee. A host-only fee of 14% will be the default fee setting for all new* property managers connecting via software in APAC (except in Japan) and EMEA. These hosts will have the option to switch to the shared host and guest fee, if that better suits their business.
*Applies to all new host accounts created on or after 4 June 2019.
As is currently the case, an additional host fee of 2% is applied where a listing uses Super-Strict cancellation policy.
The are removing the guest fee (previously up to 20%) and the commission you pay increases from 3-5% to 14% (normal policy) and 16% (super-strict cancellation policy). VAT will be added to these commission rates.
How will this affect you?
All new properties you list on the site will automatically fall under the new commission model. If you would like to convert your existing properties to be on the new commission model you can do this in your Airbnb account:
1. Login to your Airbnb account
2. Go to Profile in the right hand corner
3. Choose Account from the dropdown
4. Choose Payments & Payouts in the options then click the 'Service Fee' tab
5. Opt in to incorporate all guest fees
As more and more listings on the site remove the guest fee it will become harder to secure bookings through a listing that still charges the guest a service fee. A way round about this would be to switch to the new commission model and then uplift your prices to cover some or all of the commission.
If you uplift your Airbnb prices to cover this shift in commission, the price payable by the guest will stay exactly the same and you will maintain your profit margin. Your guests see the total cost upfront (instead of the service fee being added during the booking process), and Airbnb follow the trend toward host-only fees.
Some extra advice
Although you will be able to opt back in to the current 3% to 5% model (plus guest fees), we strongly advise that you don't. If your listing appears alongside others that don't charge a guest fee, you could see your booking rate plummet.
Find more information in Airbnb's help centre article on Airbnb service fees.
Q. How will it work for existing bookings? Will the higher commission be charged on these as well?
A. No. All booking agreements made prior to 4 June 2019 will be at the commission chargeable at the time of booking.
Q. Can we keep some property listings on the old commission model and put some on the new one?
A. No. You have to use the same commission model on all listings. You can select which one by logging into Airbnb, clicking on Service fee and selecting the option there.
Q. Why didn't Airbnb inform us about this?
A. As far as we are aware, property managers were informed by Airbnb by email on Friday 31 May 2019. An email was sent from SuperControl on Monday 3 June to provide help, ensuring you are aware of the options available to you within SuperControl. If you have any questions about the changes to their commission structure, you should contact Airbnb to discuss.