Greater Price Transparency in Short-Term Rentals Will Catch Fire

25.08.2023 - 14:36 / skift.com / Dennis Schaal / Brian Egan

Airbnb’s move to get more transparent and show up-front a stay’s total price before taxes in most of the world outside Europe will have a ripple effect across much of the short-term rental sector because of the company’s substantial influence.

In Europe, regulators for several years have required Airbnb and the competition to show in initial search results the total price after taxes. Canada and South Korea likewise already mandated displays of total price. 

Not that Airbnb opted to scrap merely showing the nightly rate out of benevolence: It was pressured by news stories and outraged guests on social media and elsewhere who got tired of sometimes-exorbitant surprise fees, including cleaning fees. After all, there was no reason Airbnb couldn’t have started showing total price — even after taxes — in the U.S., Latin America, Asia and Africa in 2019, when it began doing so in the European Economic Community under pressure from authorities.

Airbnb’s decision to show a semblance of total price, albeit before taxes, will also put pressure on hosts and property managers to reduce or eliminate cleaning fees — as Sonder said it has done — and thus lower their overall pricing to remain competitive.

Take Denver, Colorado-based property manager Evolve, for example. It has to comply with Airbnb’s policies when listing a vacation rental in Pacific Beach, Washington on Airbnb, for example, and it displays a total price before taxes of $491 for a two-night stay.

But look how misleading Evolve’s pricing display is for the same property on Evolve.com. It initially shows for a two-night stay a total price of “$280 Total (before taxes and fees).”

 But the “$280 Total” masks $168 in fees, including a mandatory $39 damage protection fee. So consider the surprise in store for would-be guests when they learn on the next page that the $280 rate for two nights has $168 in fees that come with it. Not to mention $44 in taxes to get to a $492 total price.

Evolve co-founder and CEO Brian Egan said Airbnb’s new pricing model will spur much of the rest of the industry to do similar things, and Evolve is currently testing various solutions.

Homes & Villas by Marriott handles vacation rental pricing similarly, displaying in the initial view that the nightly rate is from $156, for example. On the second screen users can see that the two-night rate for a villa five miles from Walt Disney Resort was $298, and there was a $273 cleaning fee tacked on. The cleaning fee was close to the amount of the nightly rate for two nights. Ouch. 

Evolve has to comply with Airbnb’s policies when listing a vacation rental in Pacific Beach, Washington on Airbnb and it displays a total price before taxes of $491 for a two-night stay.

Evolve’s pricing