Airbnb is implementing a major change that will fundamentally alter how many hosts price their properties. Starting October 27, 2025, all hosts using property management software (PMS) will be required to switch to simplified pricing – no choice in the matter.

If you're currently using standard pricing with your PMS, this upcoming change will directly impact your bottom line, guest experience, and competitive positioning. Here's everything you need to know to prepare for this transition.

If you're currently using standard pricing with your PMS, this change will directly impact your bottom line, guest experience, and competitive positioning. Here's everything you need to know to navigate this transition successfully.

What's Changing: The End of Split Fees for PMS Users

Under the current standard pricing model, most US hosts pay a 3% service fee while guests pay around 14.2%. This split-fee system has been the norm, but Airbnb is eliminating it for PMS users in favor of a single 15.5% fee paid entirely by hosts.

According to Airbnb's announcement, this change affects hosts using property management software, while individual hosts may still have options. The new structure means:

• Hosts pay: 15.5% service fee (increased from 15% in earlier communications)

• Guests pay: Only the listing price plus applicable taxes

• Timeline: Mandatory switch on October 27, 2025

The Real Math: What This Means for Your Revenue

Let me break down the actual financial impact using a $1,000 booking example, assuming 12% combined taxes (your local rates may vary):

Current Standard Pricing

• Host receives: $970 (after 3% fee)

• Guest pays: $1,262 total ($1,000 + $142 guest fee + $120 taxes)

• Airbnb earns: ~$172

• Tax revenue: $120

Simplified Pricing (No Price Adjustment)

• Host receives: $844.50 (after 15.5% fee)

• Guest pays: $1,120 total ($1,000 + $120 taxes)

• Airbnb earns: ~$155.50

• Tax revenue: $120

Result: Host loses $125.50 per booking; guest saves $142

Simplified Pricing (Host Adjusts to Maintain Payout)

To earn the same $970, you'd need to set your price at approximately $1,148 (increase your rates by 14.79%):

• Host receives: $970 (after 15.5% fee from $1,148)

• Guest pays: $1,286 total ($1,148 + $138 taxes)

• Airbnb earns: ~$178

• Tax revenue: $138

Result: Host breaks even, guest pays $24 more, taxes increase by $18

Strategic Options for PMS Hosts

Option 1: Absorb the Loss

Best for: Hosts prioritizing occupancy rates and guest satisfaction over per-booking profit.

Simply accept the reduced payout without raising prices. While you'll earn less per booking, your listings will appear more competitive in search results, potentially driving higher occupancy.

Option 2: Adjust Prices to Maintain Revenue

Best for: Hosts with strong market positioning and unique properties.

Raise your listing prices by approximately 18% to maintain your current payout levels. This strategy preserves your profit margins but may impact your search ranking and booking conversion rates.

Option 3: Split the Difference

Best for: Most hosts seeking to balance competitiveness with profitability.

Increase prices moderately (8-12%) to recover some of the lost revenue while remaining competitive. This approach minimizes the impact on both your earnings and guest pricing.

The Broader Market Implications

Winners and Losers

• Guests: Will generally benefit from more transparent, lower total prices

• Tax authorities: Will likely see higher tax collections on increased base prices

• Airbnb: Should maintain similar revenue while improving guest experience

• PMS-using hosts: Will face reduced flexibility and potential revenue pressure

Competitive Dynamics

This change will create a two-tier system within Airbnb's marketplace. Individual hosts who can still choose their fee structure may gain a competitive advantage over PMS users locked into the 15.5% fee. This disparity could influence how hosts approach property management solutions.

Preparing for the October 27 Transition

With the October 2025 deadline approaching, here's how to prepare for this significant change:

Before the Switch

1. Analyze your current performance: Calculate your average payout per booking under the current system

2. Research your market: Study competitor pricing and occupancy rates in your area

3. Model different scenarios: Use the calculations above to project outcomes under various pricing strategies

4. Communicate with your PMS provider: Ensure they're prepared for the transition and understand the implications

On October 27, 2025

1. Implement your pricing strategy: Adjust rates based on your chosen approach

2. Update all marketing materials: Ensure your pricing communication aligns with the new structure

3. Monitor competitor reactions: Watch how other hosts adjust and be ready to respond

After the Switch

1. Track key metrics: Monitor booking rates, revenue per available night, and guest feedback

2. Be prepared to adjust: The market may need time to equilibrate; stay flexible

3. Optimize for the new reality: Focus on aspects that matter more under simplified pricing, such as property photos and descriptions

The Bottom Line

Airbnb's mandatory switch to simplified pricing for PMS users isn't just a fee structure change – it's a fundamental shift in how vacation rental pricing works. While guests will generally benefit from more transparent pricing, hosts face difficult decisions about maintaining profitability versus market competitiveness.

The most successful hosts will be those who approach this change strategically, using data to inform their pricing decisions and remaining flexible as the market adjusts to the new reality.

The key question isn't whether you like this change – it's how you'll prepare to thrive under the new system.