Take control of your Airbnb listing with Simplified Pricing

Airbnb recently came out with a new fee model for hosts who list on the online travel agency's website: instead of paying a 3% commission and having guests pay a fee between 15 to 20% to Airbnb, hosts pay a 15% commission to Airbnb, which is called Simplified Pricing, and have control on how much guests are going to pay.

Let's take a look at how Simplified Pricing impacts hosts like you.

How does Simplified Pricing impact Airbnb hosts?

Simplified Pricing impacts both Airbnb hosts and guests. For Airbnb hosts, they'll be paying a higher commission of 15% instead of the 3% commission fee that was implemented before. At first glance, this higher commission fee is problematic.

However, when you take into consideration how Simplified Pricing impacts guests, then the Simplified Pricing may be seen as more reasonable. Before Simplified Pricing, if a guest wanted to find a place to book, they had to look not only at the price of the listing itself but also at the guest fees attached to the listing.

Guests pay a guest fee to cover marketing, products and services used by hosts and customer service, according to Airbnb. This guest fee was typically around 14% of the listing price, which means this cost varied from one listing to another.

Now, though, the price of guest fees is included with the listing price when using Simplified Pricing. This makes it easier for guests to see the total cost of a potential booking and for you to list your rentals more competitively.

For example, you can see how high your competitors are listing their own rentals and either match that price to draw in more income or lower your rates to get more bookings.

Additionally, your Airbnb listings will look more like listings on other OTAs, which will help you to be competitive and will help guests compare prices on different platforms. Guests will feel more comfortable booking with you because the price is all inclusive, just like on other OTAs.

One item to note is that not everyone has to use Simplified Pricing. People hosting in countries like the U.S., Canada, Mexico, Uruguay, the Bahamas, Argentina and Taiwan get to choose whether or not they want to keep their 3% commission fee. Additionally, those who don't use an official Airbnb software partner don't have to use Simplified Pricing.

Because not everyone has to use Simplified Pricing, those who choose to keep their 3% commission fee could have listings that look cheaper than yours (guests will notice a higher price later on due to the guest fee), which could make keeping up with the competition more difficult.

One way Airbnb is tackling this disadvantage is by highlighting listings that have no guest service fee. Airbnb hopes this will make these listings more attractive to guests, getting you more bookings.

All of that being said, you're going to need to raise your prices to pay the additional 12% of commission that comes with Simplified Pricing. If you raise your prices to be the same total amount that your guest was paying before (when the guest fee hadn't been included with the listing), you could make the same amount of money as before.

Uplisting gives an example of how you could raise your prices and save your guests money here.

Or you're going to need to increase direct bookings to save on the commission costs. Learn more about how to do this here.

Either way, Simplified Pricing seems to be the new future for Airbnb hosts. Let's take a look at Simplified Pricing in summary.

In Conclusion

Simplified Pricing has both benefits and disadvantages. We made a list of the pros and cons of the fee structure below to assist with the decision making process.

Pros of Simplified Pricing

• Your guests will feel more comfortable booking with you
• You could make the same amount of money as you were before Simplified Pricing
• You'll know exactly how much to refund guests (before, finding the guest fee that guests had paid was a little difficult)
• You can set up competitive rates easier
• Some hosts have seen an increase in bookings since switching to Simplified Pricing

Cons of Simplified Pricing

• Some countries don't have to switch to Simplified Pricing, so other hosts' prices could look cheaper than yours at first glance
• Your host fee will go up in price
• Some hosts see Simplified Pricing as a way to force hosts to list exclusively with Airbnb

Weigh out how Simplified Pricing impacts your business and determine if it's the right thing for you (if you are able to make that choice). We hope you are able to use Simplified Pricing to get more bookings for your hospitality business.