The business model of online booking portals is based on a commission, which means that you pay them a certain percentage for each booking that comes through the portal.
In general, all hosts that advertise through Airbnb and are users of Channel manager in Croatia have only one available commission model called Simplified Pricing, ie fee only for the host.
Airbnb the commission is 15%.
Switching to a 15% fee is a good solution
and does not affect the business of the host
Historically, Airbnb has had a unique fee structure for all hosts, in which a service fee is charged to both host (3%) and guest (up to 14.2%).
Based on feedback from many professional hosts, they launched a new host fee option that uses Channel manager to remove the guest service fee and give hosts more control over pricing. This fee structure is known as Simplified Pricing.
What does that mean?
Airbnb will deduct a fixed host service fee (15%) from each payment and will not charge an additional guest fee.
This will not affect existing bookings, but will apply to all bookings made after the transition to simplified host fees.
A simplified service fee structure will allow the host a simpler pricing strategy as they will be able to determine what guests will pay.
Airbnb will also highlight the fact that no service fee is added to your prices, making ads more appealing to many guests. Hosts who decided to change and keep their prices competitive on all portals recorded an overall increase in their bookings (17% *).
* On average, an increase in provisions was recorded for hosts using the simplified fee, in Europe between November 2019 and February 2020. Actual results may vary for each host.
How to avoid a reduction in earnings and wisely use simplified fees for hosts?
Adjust prices (if necessary). Since a higher service fee will be deducted from host payments, you may want to adjust your prices through your Channel manager to cover the difference and ensure that earnings per booking remain the same.
Before adjusting prices, keep in mind that it is important to stay competitive in the market.
Example of commission
In an interview with Airbnb, they confirmed to us that users who use the shared fee module do not gain an advantage.
As an example, we have prepared two ads.
The first ad has a simplified fee (the fee is paid only by the host), the second ad has a split fee (the fee is paid by both the host and the guest). The ads have similar total prices, but the first daily price shown is neutral relative to the commission model.
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