“At 29, my net worth is $25m,” Jan-Erik Asplund, cofounder of Sacra, tweeted on September 19. “Here’s how I got there: – Saved $500K from my job over 8 years -Bought $1.5M in real estate to turn into rentals – Earned $23m from Airbnb cleaning fees. Follow for more tips on how to generate passive income.”
Over 100 users took to the comments to chime in, some in on the joke, but many not…presumably because they are ill-acquainted with the astronomical cleaning fees that have become par for the course where Airbnb rentals are involved.
In fact, the fees have become so exorbitant that, per a new report from Skift, Airbnb Global Head of Hosting Catherine Powell actually launched a formal review into not only the structure, but how they’re ultimately presented to guests.
“In the coming weeks, we will be testing a number of different ways to display pricing that have emerged from this review process,” Airbnb said in a statement at the time. “As part of this test, you will see new pricing explanations and, in some cases, banners denoting upfront pricing where we have the tests running.”
But that was a full year and a half ago now, and there’s still been no movement on the platform’s end — a fact that apparently isn’t lost on CEO Brian Chesky.
“The way fees are displayed (and how pricing works) didn’t go through an intentional design process, but occurred organically over the course of years. A lot of lessons learned here,” Chesky tweeted on October 10.
So what exactly is taking so long? As Dennis Schaal posits at Skift, it’s not for lack of technology. Rather it comes down to two components: the first being that hiding fees allows Airbnb to remain competitive when it comes to search, and the second being how hosts will react. “[S]ome hosts view cleaning fees — which have been rising because of a slew of factors, including the labor shortage and inflation — as a profit center, so Airbnb doesn’t want to alienate hosts. There would be an outcry from hosts if Airbnb limits their ability to set cleaning fees,” Schaal writes.
That said, the lack of transparency where fees are involved only continues to alienate guests. It’s already happening, with many former Airbnb loyalists turning (back) to hotels. According to a new study published in the International Journal of Contemporary Hospitality Management, most travelers — both luxury and economy — still gravitate towards to hotels anyway. Further, evidence shows that those who still side with Airbnb can be easily persuaded. In other words, cleaning fees, in many cases, can be the determining factor.
If Chesky’s recent tweets are to be believed, however, changes are on the horizon. This comes off the back of the Biden administration announcing its intent to form a new rule that would require all airlines — U.S. and foreign — to disclose all fees up front, abolishing what they refer to as “surprise fees.”
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