Calling all Airbnb hosts who host their vacation rentals in Australia and New Zealand, it’s vital to understand how Airbnb charges hosts and what percentage of each booking they take. In order to minimise any upsets to revenue performance and increase profitability, we wanted to make everyone aware of how Airbnb’s fee structure works on listings in Australia and New Zealand.
There are two main ways that Airbnb charges its service fees, so let’s take a look at how Airbnb service fees work.
Airbnb Fee Model #1: Split-fee
Airbnb’s split-fee model charges hosts around 3% and guests around 14.2% of the booking total. These percentages vary depending on the type of stay (for example, Airbnb Plus Hosts are charged more), and this fee structure is most common among Airbnb hosts.
Airbnb Fee Model #2: Simplified Pricing
Starting in December 2020, Airbnb introduced Simplified Pricing. Contrary to how Airbnb’s other fee structure, Simplified Pricing will not charge the guest a service fee. Instead, it will move the cost over to the host by deducting 14-16% from the host payout instead.
This fee structure is mandatory for traditional hospitality listings–such as hotels, serviced apartments, etc., as well as software-connected hosts across all of Airbnb (unless most of your listings are in the USA, Canada, the Bahamas, Mexico, Argentina, Taiwan, or Uruguay).
Which Is Better?
Airbnb recommends implementing the Simplified Pricing fee structure. During the testing phase of this fee structure, Airbnb reported that hosts were able to secure up to 17% more bookings compared to hosts with the traditional split-fee pricing service fee – good news for hosts that required to utilize Simplified Pricing. You will need to weigh out the pros and cons, and the impact Simplified Pricing will have on your business to determine if it is the right service fee structure for your success.
Whether you are new to Airbnb or a seasoned host, we highly recommend reviewing your rates in Beyond with these fee structures in mind.
If make the switch over from split-fee to Simplified Pricing, we recommend increasing your base price by the percent of the fee that the guest was paying previously. As an example, if before December 2020 the guest was paying 12% and the host was paying 3%, then we would suggest raising your base price 12% to account for the decrease in guest fees on the total cost.
Additionally, if you are worried that the different fee structures may alter overall demand for short-term stays as a result, the Beyond dynamic pricing algorithm automatically responds to market demand and will correct prices accordingly. Just be sure to review your base price and we will take care of the rest!
If you have any questions on how to change your base price, please don't hesitate to reach out to us!