Airbnb seems set up for hotel expansion, competition with OTAs

The short-term rental giant may be gearing up to take on OTAs, but its recent fee structure shift may negatively impact its hosts. 

Airbnb is changing its service fee structure from split to single fee, potentially positioning the company to compete with Online Travel Agencies (OTAs) like Expedia and Booking.com.

But not all affected will benefit. While it may give the Short Term Rental (STR) giant new opportunities to win the accommodations category, there’s a downside for hosts, as the policy will shift fee responsibility onto them.

Currently, the majority of hosts pay a 3% service fee to Airbnb. Others, including some with rentals in Italy and Brazil, pay more. Guests currently pay a service fee of 14.1% to 16.5% of the booking subtotal.  

Next month, the majority of Airbnb hosts using a property management system (PMS) will be transitioned to the single fee structure automatically. Hosts who don't use property management software will not be affected and can still use the split-fee structure, according to Airbnb's policy. The single fee structure was initially introduced in 2019 and became a standard for the majority of API-connected hosts in 2020.

Going forward, hosts using a PMS will pay a 15.5% service fee. This change will not impact the amount Airbnb makes off the listing.

In a statement to PhocusWire, Airbnb said it recognizes the shift as a “meaningful change” and plans to provide host support. 

“We’re committed to transparency and empowering our community, and following feedback, we’re transitioning all hosts using property management software to a single service fee to simplify pricing and enable more accurate and competitive rates,” Airbnb said.

According to Pedro Colaco, CEO of GuestCentric, however, Airbnb has essentially abandoned the “community” model it was once defined by. 

“By shifting from a split fee to a host-only commission of roughly 15%, it now mirrors the structure of Booking.com and Expedia,” Colaco said. “That means hosts absorb the full cost of distribution, while guests see one all-in price.”

The move makes Airbnb “interchangeable” with Booking.com and Expedia from a hotel’s perspective, Colaco said. 

“Commission parity removes a sticking point in supply negotiations. Airbnb is clearly signaling to hotel partners: ‘We’re just like Booking.com. Only with stronger brand equity and better UX.’”

Sarah Stahl, co-founder and chief marketing officer of Market Movers, echoed this, stating that Airbnb is putting itself neck-and-neck with the big-name OTAs.

“The competition now is purely about fees and guest experience,” Stahl said. “Who will win?”

Heightened competition 

Experts believe the change will give Airbnb a competitive edge in the travel sector.

By rolling their fees into a flat price, Airbnb is adopting the model that OTAs have used for some time—one that presents a “clean price” with "commissions taken by closed doors,” according to Jay William, co-founder of Knokx and founder of Villa Marketers.

“This also helps them sidestep regulatory scrutiny around ‘junk fees,’” William said. “You can't regulate what consumers can't see. It removes friction at checkout and makes the booking experience feel as straightforward as booking a hotel room.”

A single price is also in line with consumer expectations, Colaco said. Travelers have been conditioned by household names like Booking and Expedia to anticipate a “what you see is what you pay" experience.

From his perspective, Airbnb is closing a gap for travelers by making it easier to compare and later capture hotel bookings while cutting mobile abandonment.

“Strategically, this is less about pleasing current hosts and more about scaling the platform’s hotel inventory, where (apparently) future growth lies,” Colaco said.

The fee structure change follows Airbnb CEO Brian Chesky’s recent comments during the company’s second quarter earnings call. While homes are “the heart and soul” of his company, “hotels would be a great supplement,” Chesky said.

But what’s happening doesn’t exist in a silo. And this isn’t an isolated change, according to Colaco. 

“Airbnb’s pricing shift reflects a broader strategic trajectory toward OTA convergence,” Colaco said.

He cited payment centralization, the offering of experiences, pricing and policy standardization, hotel integrations and commission-only pricing as evidence of the industry’s path toward convergence. 

“The next chapters are predictable: loyalty programs to drive repeat usage, tiered visibility models at 18%-20% commissions to secure preferential placement, bundles with flights,” Colaco said. “For guests, this creates a seamless, OTA-style journey. For hosts and hotels, it’s a reminder: If you don’t own the booking, you don’t own the guest.”

Is it all bad news for hosts?

Airbnb’s latest move, which comes months after the addition of the controversial Services category, provides a “moment of clarity” for hosts, according to William.

“Airbnb is strategically removing one of the biggest signals that used to drive travelers toward direct bookings,” William said. “By eliminating the visible service fee, they're making it much harder for hosts to use price as a differentiator.” 

Now, the responsibility for price justification will fall on hosts’ shoulders, he said. With hosts absorbing the fee travelers paid previously, guests might assume the hosts are simply charging more without understanding the hosts are taking on a new cost, William said.

That means the host is likely to take the heat for pricing, while Airbnb doesn’t feel the pinch since it receives the same fee, just from a different party. 

“Airbnb didn't just restructure pricing - they neutralized host independence,” William said.

The company is also removing user clarify with the change, according to Colaco.

“For hosts, this is a material cost increase if they don’t reprice,” he said. “For guests, it removes checkout friction, but it also erases transparency: There’s no longer a clear distinction between what the platform takes and what the supplier earns.”

Stahl thinks the move may actually backfire on Airbnb.

“Fees are rising and RevPAR projections are down, hosts are actively looking for alternatives-especially direct bookings,” she said. “Airbnb risks losing supply while trying to look more like an OTA.”

Bottom line, the shift indicates a larger evolution in the space, but it doesn’t have to be completely negative for Airbnb hosts, according to Stahl.

“It brings Airbnb in line with traditional OTAs and likely improves the booking experience for guests with more transparent pricing,” Stahl said. “Hosts may feel the pinch initially, but with thoughtful adjustments, it doesn’t have to hurt your business.”