Airbnb offers fee transparency! Airbnb recently addressed the issue of fees on Airbnb reservations after many inquiries from guests. They disclosed how fees work, some background information on affordability and what they were doing to reach out to guests directly in the ensuing months.
How hosts fix their prices and cleaning fees
Airbnb pointed out that there are usually different fees at multiple points in the booking process.
One, hosts have the freedom of setting their cleaning fees as well as nightly rates and other relevant factors. These include the size of the home, its location, amenities, guest capacity plus more.
Airbnb believes that when Hosts have control over their personal pricing, they are empowered and this helps them to achieve success on the Airbnb platform.
Hosts have the freedom to fix their own cleaning fees, because each host is in their own unique point in terms of cleaning. For instance, there is a huge difference between cleaning a small apartment and cleaning a five-bedroom house.
Furthermore, some Hosts opt to clean listings on their own to cut on costs. Others choose to get professional cleaners to do the job.
All in all, Airbnb gives guests insights into the cleaning fees before they commit themselves to a stay. As such, they can consider the cleaning fee as they make the decision.
Airbnb offers tips to keep cleaning fees affordable
While Hosts have the autonomy to fix their own cleaning fees, Airbnb offers tips to Hosts on how they can keep the fees reasonable. They also suggest that they consider not imposing charges on cleaning fees completely.
For that reason, among the active Airbnb listings worldwide, 45 percent of them do not impose a cleaning fee charge. For listings that impose this charge, the average fee is usually under 10 percent of the whole reservation cost.
According to Airbnb, “We’re encouraged by those numbers, especially considering that cleaning has taken on added importance and costs for Hosts since the pandemic was declared in 2020. At that time, we announced our 5-step enhanced cleaning process for Hosts to prioritize health and safety. “
“Many hosts were already going above and beyond on cleaning, but for others this process may have meant increased time and investment into their cleaning protocols. We are grateful for the extraordinary steps the vast majority of Airbnb Hosts take to prioritize the health and safety of their listings. 94% of all Airbnb reviews show that guests are satisfied with cleaning, scoring it a 4 or 5 stars.”
How the other fees work
In addition to the cleaning fee and nightly price determined by hosts, guests usually fork out a service fee together with occupancy taxes.
Service fees are usually set by Airbnb. These fees enable them to run smoothly and meet the costs of the services and products that they provide. An example of this is their 24/7 customer support. In most stays, the service fee is usually below 14.2 percent of the booking subtotal.
Occupancy taxes constitute fees and taxes on the accommodation applied at the country, state, county or city level. These rates are set by the local government and not Airbnb. They are basically the same rates that are imposed on hotels and other hospitality businesses in the same areas.
In some areas, Airbnb is permitted to collect the tax on behalf of their Hosts and hand them over to the local governments directly. Up to date, Airbnb’s community has made $3.4 billion in taxes in the last seven years, including $725 million in 2020.
Just as the cleaning fees, guests can see these fees and taxes prior to committing to a booking.
The future and how to make pricing more transparent
Airbnb emphasized on their aim to make the price of a stay visible for guests. This includes the fees that Airbnb controls as well as the fees that they don’t control. They also admitted that there is always room for improvement and they planned on taking the feedback that they receive from guests.
Way Forward
To achieve this, Catherine Powell, Airbnb’s Global Head of Hosting, appointed a team under her to center on overseeing an extensive review of Airbnb’s fees and make recommendations where needed. This is with the goal of ensuring that pricing is more transparent and simple for Hosts and guests to navigate.
The process will also involve consultation with members of the Airbnb community, such as the Host Advisory Board. The team is expected to have the review and recommendations in place by December 15.
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