In
the coming weeks Airbnb will test different ways to display pricing for some
properties in markets around the globe, showing a price that comprises nightly
rate, service fee and cleaning fee in the initial listing search.
This
test comes little more than two years after Airbnb enacted similar changes to
its pricing display in Europe following demands for more transparency from the
European Commission and some national consumer protection authorities, led by
the Norwegian Consumer Authority.
In
the European model, for searches with dates, Airbnb shows the total cost
including property price, cleaning and service fees and applicable occupancy
tax.
In
contrast, in the United States for example, searches for Airbnb listings in several
cities currently show in the initial search listing a nightly rate that is just
the property price with, in smaller font below, a total price for the stay that
includes fees but not taxes.
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In the new test, which Airbnb says “starts
in certain locations later this month” and will run for a “few weeks,” Airbnb
will show a total nightly price inclusive of fees but not taxes, which will
continue to be broken out on the final payment page depending on location.
The test is part of a review process
Airbnb initiated in May, one day after an outcry on social media about its
fees.
“In recent days, we’ve heard from guests about fees
on Airbnb reservations,” the company said in the May statement, which
goes on to explain how fees are set and to announce the initiation of a review.
“We also understand that there is always room for
improvement and to take the feedback we receive from our guests. Catherine
Powell, Airbnb’s global head of hosting, today assigned a team under her
purview to focus on conducting a comprehensive review of our fees and making
recommendations where appropriate — with the objective of making pricing even
more transparent and easy for Hosts and guests to navigate.”
Airbnb says after these tests over the next few
weeks it will determine “whether or how” it changes the way prices are
displayed. Airbnb says its service fee is under 15% of the booking subtotal for
most stays and covers the cost of the “products and services” the platform
provides. The cleaning fee is at the discretion of hosts – about 45% of hosts
do not charge a cleaning fee and those that do, on average, charge less than
10% of the total reservation cost.
In July, Expedia Group vice president for partner success in
vacation rentals, Kevin Locraft, said Vrbo is also running tests on where and
how it shows the breakdown of fees to improve transparency in its pricing.
“This is a place where you will see us lean in over the
course of the next six to 12-plus months. We know travelers don’t like fees... so
we are going to be leaning in to try to solve that issue, and ultimately as we
do, when prices are therefore more transparent, we believe it will help conversion
for everyone.”