00:00:00
So Airbnb just announced a major change on how their service fees work, and hosts are absolutely freaking out about this. The hosting community is in freefall over this, but the truth is, in our view, this change really isn't that big of a deal as long as you know how to adjust for it properly. Now, in this video, we're going to break down exactly what's changing, why it's happening, and most importantly, what you can do about it to protect your profits. All right, let's go.
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00:00:30
Okay, so what is actually changing with this fee structure? What is going on? Everyone's freaking out with these additional fees with Airbnb. What's happening? Let's go into it. We've been hosting since 2018, so it's been about seven years. And this is probably a major change for most hosts, but this is the biggest fee one we've seen in the meantime, but they've been playing around with fees and how they want to advertise it for a while.

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00:00:57

But here's the actual shift and change that they are now concrete moving forward with. So previously how this worked with service fees, and just to back it up a little bit even more, what service fees are. This is basically how Airbnb makes money. They're connecting a guest with a property that is hosted by a host, and they're essentially the broker that stands in the middle and collects a fee to set that up. So service fees basically just go towards paying for them to operate their operations for marketing and to essentially generate revenue for the business.

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01:30

Previously, they had what was called a split fee model. In most cases, hosts were paying a 3% service fee, which more or less just essentially paid for the credit card processing fees, probably plus a little extra. The guest was paying anywhere from roughly 12% to up to 14%, depending on circumstances. Now, what's changing is that they are moving all of the service fees to what they're calling a host-only service fee. Basically, hosts are gonna be paying the brunt of the fees, and it's gonna be going from 3% all the way up to 15 and a half percent taken out of your payouts.

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02:11

This change is happening October 27th, 2025 for people that use property management software. So that's the date on there. But if you're saying, "oh, that's not me, I'm not a major host, I don't use PMS software," listen up: December 1st, they're rolling it out to everyone else. So make sure you're changing it for either date.

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02:45

We can just give an example of how this breaks down. Under the old model, let's say your price was $100 a night. The guest would end up seeing a price at around $115, and the host would end up earning $97. The guest would pay about a 12% service fee, and the host would pay a 3% service fee. Now under the new model, the guest is still going to see the price of $115. They're still gonna be paying the same regardless, but the host is gonna be getting about the same amount of money, about $97 and change. The bottom line is that the guest experience is going to stay exactly the same. The only thing that needs to change is how you set up your pricing.

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03:57

So ultimately, you might be asking the question, well, why is Airbnb making this change to begin with? It really broke down to about four different reasons. Reason number one is they wanted to have more price transparency. Guests wanted to have more upfront pricing, not being levied with surprise fees on the backend. Airbnb was getting a lot of flack over this over the years. This change helps create an even playing field. To be totally honest, other platforms like booking.com have operated this way almost since the beginning. Airbnb has slowly been shedding market share to sites like Booking.com because of things like this, where Booking.com already has that service fee billed directly to the host. This creates more upfront, transparent pricing.

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05:50

So now why hosts are panicking over this? You know, we're seeing people make claims like, "well, I'm going to make less money," or "guests are going to think my prices are too high," or "I'm forced to raise rates in a bad economy." At the end of the day, the real issue here is that they're just simply not adjusting their property management software pricing settings. The fear really comes from not understanding the mechanics of the update.

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06:15

Now, what we're going to do here is we are actually going to take you guys into our property management software. On October 27th, we'll show you exactly what we're going to do. We are inside of Hospitable, which we personally use for our property management software. On October the 27th, I'm going to go to settings, then properties, and here is where you can apply what's called a channel manager markup. Currently, our Airbnb markup is at 3% to account for the service fee. On October the 27th, I'm going to change this from 3% to 15.5% and then hit save markup. Once I do that, all of my pricing for my Airbnb listings is going to be automatically adjusted and pushed out to every single listing to simply mark up the price by 15.5%. From the guest perspective, the price they see and what they're going to pay is going to be exactly the same.

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08:44

For non-PMS users, you're going to have to, unfortunately, manually adjust your base price and start to account for this fee so you're not eating it. And you're going to have to use a calculator to maintain your margins. Maybe this is the boot that you needed to actually get onto one of these PMS softwares because it's so easy to do it with that. You have until December 1st if you're a manual user.

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09:22

The bottom line is that the real risk here is simply doing nothing. If you don't update the way you do your pricing, yeah, you're going to earn about 10 to 12% less per booking. And trust me, if you have a larger portfolio, that's going to compound very quickly. But if you do make the simple adjustment, you're going to be right on track or potentially even doing even better because ultimately this is where the industry is pushing towards.

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09:55

Let's talk about why this change could actually be a good thing for hosts that are prepared. This could actually make your listings more competitive because guests will experience fewer booking drop-offs from surprise fees. Booking transparency will really increase the guest experience. It also creates a more level playing field because everyone has to adapt to this, and it levels the field with other OTA platforms like Booking.com and VRBO.

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11:08

Finally, and this is probably my favorite point, this change makes direct bookings even more attractive. When you're doing direct bookings, guests are going to see way more of a difference because you're not having to pay the 15% fees to Airbnb. It's more crisp and clear to show that with the markup. Upfront, when it's transparently saying, "hey, this booking is $115 instead of $100," if you have a direct booking website, you don't have that 15% markup because they're booking direct with you. Yes, you should probably take into account the 3% credit card fee, but 3% now compared to 15% is way different. It actually gives you an angle for being direct and being able to advertise that more clearly.

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12:22

So ultimately, if you're watching this video and you're feeling really overwhelmed by all these changes because Airbnb keeps rolling them out, this is exactly why we built our STR operating system with STR Wealth Academy. Hopefully you found this video helpful. Again, like, subscribe, leave us a comment in the box below. Let us know your thoughts and we're curious to hear from you guys. What do you think about this change that Airbnb is rolling out? Let us know by commenting below in terms of how this is impacting your short-term rental business. All right, see you in the comments. See you there.