Airbnb to increase guest service fee for foreign currency transaction from April

Your Airbnb stay will soon get more expensive if you pay using a different currency than what the host expects. Airbnb is planning to increase the guest service charge for cross-currency bookings from April. This comes as the firm is looking to expand in International markets to boost growth.

“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.

Extra Service Charge

Airbnb in its website has said that an additional service charge of as much as 2% will be charged to guests if they pay in a different currency from the listing. This would bring the the guest service fee to as much as 16.5% of the subtotal, excluding taxes. Airbnb hosts can also add extra cleaning fee. However, some users have raised concerns of the cleaning charge being excessive for some guests.

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“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.

In the third quarter, cross-border bookings were up 17% from a year earlier, the company reported.

Analysts on extra fee

TD Cowen analyst Kevin Kopelman has said that this move could drive approximately $200 million to $500 million in incremental profit for the company in 2025.

Meanwhile, Ken Gawrelski, an analyst at Wells Fargo, wrote in a note that even if the positive growth of the company is affected by customers choosing to pay in the local currency at the time of checkout, a single digit impact to 2025 EBITDA could be seen.

Airbnb has been seeing slowing growth in the bookings and revenue, despite the post-pandemic travel boom. As per Bloomberg, the firm's Chief Executive Officer Brian Chesky has spent the past year making affordability one of his top priorities to attract more users to the platform. Airbnb is also looking to expand in its less-penetrated markets of Latin America and Asia-Pacific region.