Airbnb fees - Should host cover them?

[Wilson Vanhook]

Do you as hosts pay the airbnb service fee or defer it to the guest? Standard is 3% fee for the host and 20% fee for the guest. But, if hosts choose to pay the guest’s fee, airbnb will knock that 20% down to 11%. So the total fees, which the host would be covering all of, would be 14%. The standard way total fees airbnb collects adds up to 23%.

So in theory you could cover the fees and raise your rates by 11% across the board, forwarding a total savings of 9% to your guests. All in all if the guest looks at the bottom line total for your bookings you will get an edge out on the competition. But this only works if guests are searching specific dates and looking at the total with all fees, as opposed to looking at solely the nightly rate, since you increased those nightly rates by 11%. If guests focus only on nightly rates, search for flexible days, or look at map view which only shows the nightly rate, this tactic could actually hurt you, even though you’re actually trying to save the guest 9%…

Idk if many hosts have taken this into consideration before or not. But I’m asking what you all think is the better alternative? Keep your nightly rate lower and just forward the higher fees to the guest, OR increase your rates so you don’t lose money but save the guest on fees? All depends on what numbers most guests are focusing on when booking.

[Erik Stenbakken]

Based on my experience in business in general (25+ years), people go for the LOWEST, FIRST PRICE. 

Yes. They may bellyache about the fees later, BUT you'll get the business. I ran into this same thing in a past business (commercial photography) where I could quote them a lower up-front charge with options, or add-ons (which were essential) OR a higher up-front cost but lower overall cost. I had clients get ANGRY with me that I'd have the gall to charge more up front than my competitors (even though their end-of-job cost would be lower). They virtually demanded I switch pricing models. So I did. And I got a ton more business. And more money. 

They got what they felt they wanted: lower up-front cost. I got what I wanted: higher revenue. 

Assuming the American consumer is money-savvy would be a mistake. That's my 3¢ (adjusted for inflation). YMMV.