[00:00:02] Speaker A: This is Short Term Rental Management, the show that is all about short term rental property management with your host, yours truly, Luke Carl.
All right, all right. Short Term Rental Management. We're going to talk about the new Airbnb terms and conditions as far as their fees are concerned.
Got Chuck Kramer and Avery Carle talking about it.
Now I do want to mention, I'm sure that there's a hundred variables involved here and somebody's going to come up with like a certain percentage that needs to be a quarter percent higher or lower and all that sort of stuff. But we're just going to give you kind of a a brief overview of what this is going to look like and we are glad that you are here.
Welcome to yet another edition of Short Term Shop News.
But we got late breaking news here that Airbnb is simplifying their service fees, as they say on October 27th.
And in the email that they have sent to everyone, it's three bullet points. And I will read those to you what the update means. This single 15.5% fee is based on Airbnb's global average. Service fees and will are currently split between hosts and guests. It will be deducted from your price to calculate your payout. From price to calculate your payout.
You can adjust your prices on October 27 to account for the changes and keep your payouts the same. So I guess in essence there they're saying that, and again they're saying this is only affecting people that are using a property management software, which would mean that you would in essence simply go on your management software and uplift your Airbnb price by 15.5%. And that breaks you even. Basically.
I'm going to turn that over. I'm going to share screen on this exact policy here and turn this over to Chuck to interpret what the hell this means for hosts.
[00:02:03] Speaker B: Okay, as much as I hate to give them credit, at the bottom they give a pretty decent example. Overly simplified and ignore the rounding. We know Airbnb does funny rounding things already anyway, but right now if your price is a hundred bucks, you're getting $97 after they keep their 3%.
But the guest is paying 115.
Under the new system, the simplified fee, which most of the world has already been using, we're going to raise our rates by 15 and a half percent.
The guest is still going to pay about $115 and Airbnb will still get this about the same amount of money from us in the long run for them, it means they're getting all the service fees will come from the host as opposed to guests. From the Wall street perspective, this makes sense because when you change where your revenue comes from, you can either be perceived as better or worse.
In this case, since they're moving it away from guests, they can also advertise that we have no service fees. Come book with us.
And kind of undermine the direct booking movement, which, let's face it, that's a big part of the direct booking movement. Right? No service fees.
And, you know, at that point, it's just going to be about price.
And we all know that Airbnb is worried about the direct booking movement with all the changes they've made this year and the new monitoring and that sort of thing are all targeted at that. You know, last year's stats were that Airbnb was at 43% and the direct bookings were up to 28% from 19 the year before.
So direct bookings have been climbing. Airbnb has been climbing as well, mostly globally. But, yeah, they're, they're worried about that second place guy, which is the direct booking movement.
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Well, I love me some Airbnb. I have no problem with them doing this, frankly.
And yeah, I mean, I get it. It does kind of make things a little more simple. There's a couple of things here like, wait, wait, what do I need to do? How do I do this? I'm going to maybe change my fees on because again, you can change your percentages. Airbnb VRBOBooking.com on your management software. It's just under the. I use Hospitable. So it's on the pricing section. Very easy to do.
So, long story short, I basically just need to raise my Airbnb fee by, you know, somewhere around 15 to 16, 15.5 if you want to be right on with this number by October 27th.
And that's pretty much it. Bob's your uncle, as they say. Right. But there's, you know, I think there's some strategy here that you can kind of play around with a little bit. Booking.com already does it this way. Is that correct?
[00:05:32] Speaker B: Yeah, they're charging about 14% or so. Yeah.
[00:05:36] Speaker A: The difference there being that you have to pay them back after the fact, which is rather annoying.
So this is actually a little easier than that.
And I would imagine that VRBO will follow suit on this as well. What are your thoughts there?
[00:05:50] Speaker B: I think they definitely will, because otherwise.
Well, you know, let me take that back. Maybe it's not definitely, because now if people keep the 5% commission, if you're not on the subscription plan, VRBO, if you just keep the 5% subscription and you add the 5% to your $100, you're at 105. Whereas on Airbnb, that same property will be 115.
So now VRBO can, you know, potentially, if they stay where they are, potentially, say, hey, we're. You come over to us, you're gonna be less expensive.
[00:06:20] Speaker A: Yeah, that really only applies to us old folks over here that have the subscription. Like, newer folks are no longer able to get the subscription, so it may not be as relevant there.
[00:06:31] Speaker B: Well, no, but they're paying the 5% commission fee plus the 3% credit card. So 8% altogether.
That's still less than 15 and a half. I mean, it's about half.
[00:06:41] Speaker A: I see. So you're saying there's a small chance that VRBO could become more attractive.
[00:06:46] Speaker B: Yeah, certainly could be.
On the other hand, you know, they could be looking at it saying, we're leaving money on the table because all these other guys are more expensive than us. And the value of being less expensive is not as important as the value of getting that extra income.
So it could be a push for them to move up from that 5% to 10 or 12.
[00:07:07] Speaker A: Avery, does this change your hosting style at all, or.
[00:07:11] Speaker C: I think that it'll make the. The guests and the consumers happier. Because at least the feedback that I get via any post that I make on social media is people still are overwhelmingly angry about extra fees.
So I think that as this is rolled out and as this becomes the norm, then less and less people are mad at Airbnb about extra fees, and then they kind of come back to the platform. So I think it's a good thing. I think, and I want to say I read an article where this is actually a law that because that there can be no extra fees, everything has to be included in the price per night across hotels, Airbnbs, everything. So that's why they're doing it. I hate calling it Airbnb. I like vacation rental. It's a vacation rental anyway, so I think it's going to be great. I think it's going to help consumer sentiment, and I think that we'll see, you know, not a huge. Not an onslaught of bookings, but I think we'll see a little bit of ticking upwards as people become aware of this, that there's no more, like hidden fees. Even though they weren't hidden, they're very clearly disclosed. But I think it'll be a good thing.
[00:08:15] Speaker A: Yeah, I like it, too. I think it makes things a lot more simple. I like move here from Airbnb. Thank you, Airbnb. You've changed our lives. We love you. But if anything, I think that we do need to be a little bit worried about hosts not catching on to this and our competition charging 15% too little for the first month or two before they. And then they get that paycheck and they're like, what the hell happened here? I think that'll probably shake itself out pretty quickly there, just in case somebody misses this. But that is a possibility.
[00:08:47] Speaker B: Yep. And, you know, there's some question here, too, about the October 27th date.
You know, Airbnb has not been 100% on target with schedule changes.
So I'm. I'm reading into this something that's not there, but it sounds like all bookings up until October 27th will continue at the split rate, and bookings starting on the 27th will get the combined rate.
But what if that booking is for four or five months from now? Is Airbnb going to be tracking this well enough to only take the 3% out of the host payment?
We'll have to pay a lot of attention when that, you know, during those several months after the. After the change to make sure that the accounting is done correctly.
[00:09:32] Speaker C: Yeah. Overall, I think just the all fees included in the nightly rate is a good, good move.
[00:09:38] Speaker A: Yeah. I can even put that in my listing. I. You know, maybe we could even use this as a marketing tactic of sorts. But of course, it'd only be a week or two before everybody catches on to that.
[00:09:47] Speaker B: Yeah.
[00:09:48] Speaker A: Yeah.
[00:09:48] Speaker B: And, you know, I played with that once. You know, go. Because you can opt into it.
[00:09:52] Speaker A: Yeah. This is not new. Airbnb had this as an option prior to now.
[00:09:57] Speaker B: Yeah, I didn't find it help. You know, I tried it on. I have one account that's got one property on it, so I played with it on that one, and it was a disaster.
[00:10:07] Speaker A: Oh. So, you know, didn't work out, but now it'll become the norm. And.
And, you know, so, again, long story short, we're not expecting any.
This is not a positive or negative here, really. We're just letting everybody know that this is happening. And what's the date on that again, Chuck?
[00:10:24] Speaker B: October 27th.
[00:10:25] Speaker A: October 27th. All fee will basically. All fees will basically be included in the nightly rate. Is it fair to say it that way?
[00:10:32] Speaker B: Yep.
[00:10:32] Speaker A: Okay. Well, there you go. Thank you for coming to this edition of Short Term Shop News.
[00:10:40] Speaker B: You know, for, for hosts. This is, this is going to put something up front that I've been trying to get people to understand for a while, and that is that they go, oh, Airbnb is cheap. I'm only paying them 3%. No, you aren't. You're paying them 15 and a half percent or more, you know, because you have to look at the difference between the money the, the guest pays and the money you get.
And, you know, this is going to make that clearer to host, too, you know, so it's going to help them understand the actual business model better.
[00:11:07] Speaker A: All right, everybody, thank you. We love you. Short term shop on YouTube for all of your vacation and travel single family overnight rental news.
