Airbnb's 15.5% Fee Hits Every Host September 15 (Fix These 4 Numbers First)

On September 15th, Airbnb is changing their fee structure. So, all hosts now have to pay the 15.5%. But it's not just coming out of your reservation price. It also comes out of your extra guest fee, your pet fee, and your cleaning fee. And so, if you don't have the right markup in place, you could be missing out on money. We're going to give you the exact markup you need to put in. It's not 15 1.5%. We'll walk you through step by step. Stay tuned. Let's jump

into it. So, is this applicable to you? Yes. If your property is on Airbnb, then this is applicable to you. About a year ago, hosts that were connected to a PMS platform had this change already happened. But now, it's for everyone. So, if you're not connected to a PMS platform, that 3% that you were paying is now going to 15 12%. There's no more guest fees side of the equation. And so, if you log in your Airbnb account, you see that little price prompt, then this

is applicable to you. So, what happens if you do nothing? Well, you're going to earn less money on each reservation. In fact, around 12 a.5% less. Just going to read off my math here to give you an example. So, if your old rate was $100 and the guest paid $115, you kept 97. But now, if you don't do anything with that $100 rate and the guest pays 100, you're going to get $8450. And it's actually the same math on every fee. And that's what's catching hosts

offguard because this includes our cleaning fees. This includes our PEP fee. This includes extra guest fees. The 15 1.5% is on your booking subtotal, excluding taxes. It's on the whole price the guest pays. Now, the math isn't as straightforward as you might think it is. If you were simply going to multiply your total reservation amount by 1.155, so that would be the additional 15.5%. Then you're still falling behind where you were before. In fact, you'd be earning about 1.3% less than you were previously. And so,

the correct math is an 18.34% markup. This is the same number my team and I applied around a year ago when we made this change. It's the same change you need to apply if you haven't already done it. So, let's give an example here on your cleaning fee. Let's just imagine that you had a $150 cleaning fee. You used to pay 3%. It's always been charged on your cleaning fee. It's just a much higher fee now. That would have been $4.50 out of your cleaning fee

that you paid to Airbnb. Now, if you do nothing, if you don't mark up your cleaning fee and Airbnb starts to charge you 15.5%, well, now you're going to be paying Airbnb $23.50 just out of that $150 cleaning fee. So, you need to make sure that you're adding this markup $18.34% to all of the fees that are applicable to the guest reservation. Now, if you started in an Airbnb sometime in the last year and you added your property to a property management software platform like Hostaway

or Guestie or Hospitable, well then you're going to need to add this in a channel markup. Your PMS system is pushing its prices to Airbnb and hopefully the other platforms as well, right? Booking.com, VBO, Google, etc. So, you need to make sure that the channel markup is not directly in Airbnb, but it's in your PMS. That way you're distributing the same prices across the different platforms. You can of course charge higher markups in different platforms if you want, but that's really a topic for another episode.

So if over the last year been a single individual host on Airbnb, not on other platforms, and you've since joined a PMS, and you don't have these markups in place, make sure you get it in there. But make sure that you also add it on top of the cleaning fee and those extra guest fees because if your property management software is like ours, those are not all combined. They're separated out and they all need their own calculation. Now, you might be thinking, Tim, if I raise

my rate over 18%, isn't that just going to tank my bookings? Well, no, because the amount that your guest is paying is essentially the same price. Remember, they used to pay around roughly 14% and you paid roughly 3%. Now you're paying 15.5%. The guest doesn't even see the fee. They're going to be paying pretty much the same amount. Now, if you didn't mark up your prices, well then of course they're just going to be getting a deal. So that's it. Quick short episode today. Want to

make sure that you don't get caught off guard. And if you don't want to handle this yourself, well, my team and I have managed over 100,000 guests now in over 50 cities. We'd love to chat with you to see if your property makes a good fit. You keep your host accounts. Everything stays under your ownership. you receive the payments. But here at Cororsley, we handle all the back-end operations. You can find us at cororsley.com. That's cory.com. I'd love to chat with you personally. Till next time,

I hope you have a fabulous week.