Airbnb is making changes to its platform after the company received complaints from guests about hidden fees.
“I’ve heard you loud and clear—you feel like prices aren’t transparent and checkout tasks are a pain,” tweeted Airbnb CEO Brian Chesky in early November.
As of December, Airbnb said it will be making its prices more transparent by offering an option to view a property’s total price before taxes in the search results, map, filter, and listing pages.
Previously, the company displayed a rental’s average nightly rate, meaning add-ons, such as a cleaning fee and Airbnb’s service fee, weren’t included until you reached the payment page. Suddenly, a $400 weekend getaway might jump to $700 with add-ons. Once a guest toggles on the fees-included feature, though, it will enable the guest to see the total price before starting the booking process.
“I think it’s better to be more transparent. I think people like to know the costs that are associated with choosing an Airbnb over a hotel,” said Jennifer Schnier, an Airbnb host in Georgian Bay Township. “Because the experience in an Airbnb is very different.”
What are Airbnb’s hidden fees?
The extra fees that pop-up on a rental’s payment page have long been a point of contention for Airbnb guests, particularly the cleaning fee. This fee is meant to cover the cost of cleaning and sanitizing a rental between stays. But the host has control over how much is charged. The amount charged typically correlates with the length of stay and the size of property.
For her four-bedroom rental, Schnier said she charges a $50 cleaning fee for short stays and $150 for stays longer than a week. “There is behind-the-scenes cleaning. When you rent a hotel, you’re not cleaning a stove, an oven, a fridge. There are different amenities, so there is associated cleaning fees that go along with that,” she said.
But some hosts use the cleaning fee as an excuse to squeeze out additional revenue from guests, charging more for cleaning than their nightly rate. Guests have also taken issue with hosts charging a cleaning fee and then asking them to perform tasks, such as vacuuming, before checkout.
“You shouldn’t have to do unreasonable checkout tasks, such as stripping the beds, doing the laundry, or vacuuming. But we think it’s reasonable to turn off the lights, throw food in the trash, and lock the doors—just as you would when leaving your own home,” Chesky said in a tweet. “If Hosts have checkout requests, they should be reasonable and shown to you before you book.”
The other fee that pops up on the payment page is Airbnb’s service fee. The company charges a service fee to cover the cost of operating. For most stays, Airbnb said the service fee will be less than 15 per cent of the booking’s subtotal.
How does this affect cottage rental owners?
When it comes to renting out your cottage through Airbnb, it should be business as usual. To stay competitive, you may want to consider how much you’re charging for cleaning.
According to Airbnb, 55 per cent of listings charge a cleaning fee and, on average, the fee is less than 10 per cent of the total reservation cost. To avoid scaring away potential guests, Airbnb suggests keeping your cleaning fee reasonable or doing away with it altogether.
In early 2023, the company plans to introduce new pricing and discounting tools that will help hosts understand the total costs guests pay and how to set competitive prices.
What other changes is Airbnb making?
In addition to being more transparent about hidden fees, Airbnb said it’s tweaking its search ranking algorithm to prioritize rentals by their total price, rather than their nightly rate. This means that higher quality listings with better total prices will rank further up in the search results.
“The Airbnb experience is already different [than traditional accommodations], so if we are more transparent with the up-front fees then people might have a bit of an understanding of why there are some extra fees there,” Schnier said.