Airbnb: Split-fee vs. Simplified pricing (Host-only fee once connected to a PMS)

When you connect your Airbnb account to any Property Management System (PMS), Airbnb will consider you a professional host and switches you to Host-only service fee.

This is also known as Simplified Pricing.

Countries excluded from this are USA, Canada, Mexico, Uruguay, The Bahamas, Argentina and Taiwan. 

Rest assured, this change benefits you because the final price that your guest pays in most cases is cheaper or the same (but never more expensive). Ultimately, you will be more competitive if you're using the Simplified Pricing / Host-only fee model. Below, we show you the suggested steps to ensure your earnings remain unaffected. 

Want to learn more from Airbnb directly? See the Airbnb article here, outlining the "Host-only fee".

What does it look like for the guest's view?

This host doesn't use a channel manager and is on the combination "Before" fee structure:

The service fee is passed onto the guest, increasing the guest's price.

This host does use a channel manager and is on the host-only "After" fee structure:

The service fee is paid by the Host, so the guest sees a lower price, encouraging more bookings. 

How can I ensure my earnings don't change?

As the 15% host-only fee will be deducted from Airbnb's payout to you, please make sure to increase your Airbnb prices to cover the commission. Before, the guest would pay for some of the service fee  but now it is being entirely deducted from your final price.

Check Airbnb's additional details and tips for hosts to update their prices to ensure their earnings don’t change.

How to increase Airbnb's prices from Smoobu? By increasing your Airbnb mark-up. See below

Increase your Airbnb mark-up % from Smoobu

In order to do this, Smoobu recommends you to define a higher mark-up for Airbnb. This mark-up means that if you charge 100/night for direct bookings, you may define a 15% mark-up for Airbnb and therefore offer a 115/night rate on Airbnb's platform.

You should set this up from:

Calendar / Settings / Percentage adjustment / add 15% for Airbnb / Overwrite Prices

Prefer to see a video? This video guide shows you how to add a 15% mark-up for Airbnb 

More information here: How to reflect commissions with a mark-up

Doesn't that mean my guests will pay more?

Not necessarily, no. In almost all cases it also means lower costs for the guest. A common concern is that increasing the mark-up by 15% then means that the guest will see a higher price. Remember this isn't so, as the 15% fee is hidden from the view of the guest. 

According to Airbnb’s analysis, it resulted in an increase of 17% more bookings via Airbnb, with the same net result for you.  It's worth noting that perhaps in the future Airbnb may possibly even roll this out to all accounts so best to get ahead now!

See below a simple example (same earnings):

Before 
Total Price on Airbnb € 115
Guest Fee € 12
Host Fee € 3
Your net Income €100

Now
Total Price on Airbnb € 115
Guest Fee € 0
Host Fee € 15
Your net Income €100

One host reviewed how their listing was performing (with views) before and after it was switched to the Simplified Pricing structure. They were happy to see a spike in listing views recorded by potential guests, due to the perceived lower price: