Airbnb guests will be charged extra fee for paying in another currency
That would bring the guest service fee to as much as 16.5 per cent of the subtotal
Airbnb Inc. is planning to increase the guest service fee for cross-currency bookings as the vacation-rental company pushes into more international markets to boost growth.
Starting April 1, an additional fee of as much as 2 per cent will be charged to guests if they pay in a different currency from the listing, Airbnb said on its website.
That would bring the guest service fee to as much as 16.5 per cent of the subtotal, which excludes taxes. Hosts can also choose to tack on a cleaning fee, which has prompted complaints from some guests as being excessive.
"From time to time, we adjust our fees to better align with the value we provide," the San Francisco-based company said in an email to users Wednesday.
The move could drive approximately $200 million to $500 million in incremental profit in 2025, according to TD Cowen analyst Kevin Kopelman. While the tailwind may be offset if users shift to paying in local currency at checkout, there may still be a high-single-digit impact to 2025 Ebitda, Ken Gawrelski, an analyst at Wells Fargo, wrote in a note.
"Sometimes we make changes to give us flexibility to offer and evaluate new products, features and policies, including fees," Sam Randall, an Airbnb spokesman, said in a separate statement to Bloomberg.
"The update to the service fee is an example of us enabling the ability to bring our platform in line with industry practices and is not anticipated to affect the majority of our guests as cross-currency transactions make up a smaller percentage of bookings," he said.
The shares jumped 5.3 per cent to $149.62 at the close Friday, the highest value since July 31.
Chief Executive Officer Brian Chesky has spent the past year making affordability one of his top priorities to attract more users to the platform. The company has seen slowing growth in bookings and revenue after the post-pandemic travel boom and is focusing on expanding in under-penetrated international markets, such as Latin America and the Asia-Pacific region. In the third quarter, cross-border bookings were up 17 per cent from a year earlier, the company reported.