AirBnB service fees
May
19

AirBnB: The dirty little secret they’re trying to hide!

Airbnb’s “secret” can cost you hundreds … even thousands of dollars!

A new millennium brought us a revolutionary way to find and book vacation rentals. The internet provided the perfect place to search for vacation rentals – in a growing marketplace that what would eventually become Vacation Rental By Owner, otherwise knows as “VRBO”. Founded by a husband and wife, Dave and Lynn Clouse, VRBO would become the largest online source for vacation rental listings by owners. In 2006 they sold the business and web site to the online travel giant, HomeAway. VRBO remains one of the most popular web sites for guests to find and book direct with owners. The term “VRBO” became synonymous with vacation rentals.

The term “AIRBNB” is synonymous with finding and booking a place to stay.

On August 11, 2008 a site was launched by two former schoolmates, Brian Chesky and Joe Gebbia. The site, Airbedandbreakfast.com quickly outgrew their apartment “office”. In March of 2009 the name of the company and web site domain name were shortened to AirBnB.com. The term AirBnB has largely replaced “VRBO” in American vernacular as a way to choose and book places to stay, directly with owners, around the world! Today, even as the landscape of the online travel industry shifts, we’re firmly in an era where AirBnB is seen as the place to search and book a place to stay directly with owners!

VRBO caps it’s service fee at a maximum of $599.
While rival AirBnB charges guests 0%-20% of the booking.

As the titans of online direct with owner vacation rentals vie for our bookings, AirBnB has established a fee structure that VRBO is keen to match. VRBO has shifted from an annual subscription model to a percentage of each booking paid by owners combined with a guest “service fee” calculated as a percentage of their booking total. But here’s where our two competitors divide. VRBO caps it’s service fee at a maximum of $599. While rival AirBnB charges guests 0%-20% of the booking. Note: Without a cap – service fees can amount to hundreds and hundreds, in some cases thousands of dollars!

SOLUTION: HidE Airbnb Fees

In response to the new fees the Book Direct movement was launched; and in general, consumer awareness of these service fees, aka Booking Fees, has expanded especially in travel forums like TripAdvisor. Facing growing guest backlash, AirBnB announced that it would do away with the guest service fee. As part of a test, they rolled out the Fee-Free model on select listings. The results of the “test” are unclear. But the end result seems to be a move to fold the guest fee into owner rental rates!

Sounds fairly innocuous, right? Well, the reality is a consumer nightmare.

In a message to owners, AirBnB offered a choice on how to include Airbnb’s Guest Service Fee in their pricing. The “RECOMMENDED” option is to “Include all Airbnb service fees in your price.“. Sounds fairly innocuous, right? Well, the reality is a consumer nightmare.


AirBnB hidden fees message to owners


…the consumer is now blind to the percentage and actual cost of completing the booking on Airbnb’s platform.

While Airbnb successfully “hides” the guest service fee in owner rates – the result is that Airbnb robs the consumer of the ability to make an educated choice on where and how to book their vacation rental. By combing the owners nightly rate with their fees … the consumer is now blind to the percentage and actual cost of completing the booking on Airbnb’s platform. Clever, perhaps. Devious, for sure!

Here’s an example of the TRUE cost of booking on AIRBNB

AirbnbSTJ Villa Rentals
Feb 15-22, 2020Feb 15-22, 2020
8 Guests / 7 Nights = $17,0038 Guests / 7 Nights = $15,000
Occupancy Tax/Fees = $2,12512.5% VI Hotel Tax = $1,875
TOTAL = $19,128TOTAL = $16,875
$2,253.00 HIGHERRates/dates/fees compared on a single listing on 5/20/2019

 

what can you do to avoid paying these hidden fees?

Booking fees aren’t going away any time soon. Most large online travel sites are under pressure from investors to produce robust returns. Airbnb’s move to hide their fees in owner rates is just their most recent strategy to wring more money from each transaction. That goal is NOT going to change. So here’s what you can do to get the best rate:

COMPARE PRICING: Take the extra time to compare pricing for the same rental on one or two other sites. Like getting a second opinion from your doctor. Or getting 3 quotes on a home improvement job.

SEARCH FOR BOOK DIRECT OPTIONS: Owners are increasingly diversifying their marketing. One of the ways they accomplish this is with a stand alone web site dedicated to their property. Booking direct with the owner will get you the best rate and eliminate the middleman fees that these large travel sites charge you and the owners.

SEARCH NO FEES SITES: There are a growing number of alternative “No Fees” vacation rental sites. Some, like the site you are currently on, don’t charge owners a commission and they don’t charge guests a booking fee. They provide a centralized inventory for you to browse, search, and connect directly with  the vacation rental owner to ask questions and make a reservation.