How do fees impact Airbnb prices?

(NerdWallet) – It’s a terrible feeling to arrive at a payment screen and realize that the cost far exceeds the price originally quoted.

This practice of adding fees throughout the checkout process is called “drip pricing”, and the travel industry is one of the worst offenders. Airlines add baggage and seat selection fees. Hotels drop resort fees at the last minute. And Airbnb listings have cleaning fees, service fees, and taxes that can inflate the cost of a reservation, making it harder to answer the question, “How much does a property cost?” Airbnb?”

NerdWallet analyzed 1,000 Airbnb reservations in major cities across the United States to understand the prevalence and impact of Airbnb fees on prices. For each reservation, the base cost of the room has been collected, as well as taxes and additional fees.

Overall, the base price accounted for 68% of the total booking cost, with taxes and fees making up the remaining 32%. This discrepancy means that travelers looking to compare prices on the vacation rental platform should essentially ignore base prices and instead focus on the total charges at checkout.

By comparison, embedded hotel room charges average 4.4% of the total cost, according to our analysis of hotel resort fee. Hotels impose other inconvenient fees, such as those for parking and pets. Still, overall, the difference between the listed price and the hotels final price is less dramatic than on Airbnb listings.

How Airbnb prices are displayed

Airbnb likes to tweak its interface, changing the way prices and fees are displayed, making it difficult to know exactly how prices will show up on any given search. In general, the base price of a good is displayed prominently. On desktop, the total price of the reservation is also included, while on the mobile app, it is random.

Take for example two Airbnb properties in the Los Angeles area. One has a slightly higher base price at $215 than the other at $200. Yet the total price, which includes taxes and fees over two nights, is actually lower for the “higher” priced property, $559 vs. $662. Essentially, the base price isn’t helpful for understand the real cost.

Unlike many hotel brand search engines, which include a “show total price” or similar option, Airbnb does not allow users to search by total price. Instead, you can only see the base price before fees and taxes are added.

Even the property detail page will usually exclude taxes. So it takes a few taps or clicks to see the total price. This makes it difficult to compare these prices between properties, especially when using the mobile app, where switching between tabs is not an option.

Here are some tips to help you compare total costs:

  • Always compare costs on the final payment screen.
  • Open multiple tabs, if possible.
  • Avoid the mobile app for comparison shopping.

How to minimize Airbnb fees

The easiest way to avoid additional Airbnb fees is to follow the steps outlined above. By comparing final prices rather than base prices, you can ensure that you consider the impact of fees on your trip. You will end up choosing properties with lower fees by carefully comparing total prices.

Here’s another piece of advice, if it’s doable: stay longer. Although longer stays will cost more overall, the impact of cleaning fees will be less than for single night stays.

Plus, taxes are reduced or waived for stays of 30 days or more in select locations. The impact of taxes and fees on these longer stays is therefore less pronounced. And many properties offer discounts for longer stays.

Not everyone plans to stay a month in an Airbnb, of course. So if none of these strategies work and you can’t find a short-term rental without huge fees, it’s still worth considering a hotel. Although resort fees and other surcharges may appear on hotel reservations, the absence of cleaning fees makes hotels the most economical option in some cases. short-term situations.

Airbnb pricing, recap

It’s annoying to find a higher rate at checkout than expected, but it doesn’t have to be the end of the world. Since resort fees, taxes, and cleaning fees are built into almost all Airbnb reservations, they might as well be rolled into the base cost per night, but they aren’t.

As long as you compare the total costs, it doesn’t matter if the base price is $1 and the cleaning fee is $99 or vice versa. It may seem gross to pay more in fees than the cost of the “room”, but from a financial perspective, it’s a wash.

Don’t get sucked into low base prices and ignore the final price. Compare the cost per night between listings by doing a bit of math after seeing the total charges. And consider staying longer on one reservation rather than switching between reservations if the charges add up.

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