Airbnb reveals a simplified host-only fee structure prior to its IPO

Reportedly, American vacation rental online marketplace company Airbnb Inc. has insisted hosts who use third-party software while managing bookings to abolish service fee paid by guests. Hosts will now be required pay a standard fee of 15%, an increase from the current 3% fee, cited sources with knowledge of the matter.

The recent development comes as Airbnb prepares for its IPO (initial public offering) which will be conducted soon. The company has reportedly requested most of the professional hosts which operate outside North America to include all service fees in the standard rate presented to the guest, a move that reflects how competitors’ platforms operate.

Sources claimed that this will increase the listed prices in order to account for the larger host fees, making the change cost-neutral for Airbnb as well as for most guests.

According to Airbnb, early tests of the reorganized fee structure helped drive 17% additional bookings. However, hosts with lesser properties have expressed some concerns over their inability to raise prices in order to cover the increased host fee. The company, as of now, has declined to comment on the negative feedback regarding the recent changes.

Christopher Nulty, a spokesperson from Airbnb, was reported saying that the company has introduced a simplified fee structure for hosts who use its API in specific countries. The fee structure for individual hosts remains unchanged, he added.

CEO of Air Concierge Inc., Ryan Danz, was reported saying that having a fee uniformity across all platforms will be advantageous to all the hosts as well as the guests. Moreover, it allows the traveler to effectively compare the home listings across several websites.

Meanwhile, Sales Director at AirDNA, Sarah DuPre mentioned that although the new fee structure could have a low impact on host retention, it could impact Airbnb’s ability to be known as a cost-efficient alternative for accommodation.

Earlier this year, Airbnb faced unwelcoming response from various hosts after being asked to issue refunds for cancellations amidst the COVID-19 pandemic.

Source Credits –

https://www.reuters.com/article/us-airbnb-ipo-fees/airbnbstreamlines-feesas-it-tilts-toward-biggest-hosts-idUSKBN28H0F3