Notes

Two companies, the same 20%, and a four-figure annual difference

Something worth saying before the criticism: the Bali villa management market publishes its prices. Openly, on public pages, with no form in front of them. That is better disclosure than several industries that consider themselves more professional.

Which makes it more interesting, not less, that two companies publishing the same number are selling materially different things.

The quote

One operator’s public pricing page sets out two plans. The higher one is 20% of rental income, described as a complete, high-end solution for owners who want full professional management: operations, staff recruitment, training and supervision, personalised check-in and check-out, concierge, professional photography.

Further down the same page:

“Staff salaries are not included in any of our management plans and remain the responsibility of the villa owner.”

That is not buried and it is not dishonest. It is printed on the pricing page. The company is telling you exactly what it does, which is managing the staff rather than paying them — two genuinely different services that are easy to hear as one.

The other one

A competitor’s public page prices villa management from 20% per booking, calculated on booking revenue, with no lock-in contract and no setup fee. Its inclusions list covers listing optimisation across platforms, 24/7 guest communication, dynamic pricing, housekeeping and laundry, pool maintenance and repairs, and monthly financial reporting. The page adds that there are no separate setup, listing or photography fees stacked on top.

Also honest. Also 20%.

What separates them

Put a villa with a payroll of around USD 900 a month next to one where that sits inside the commission, on the same gross booking revenue, at the same advertised percentage, and you are looking at roughly USD 10,000 a year of difference.

The advertised number does not move. Nothing about either company is misrepresented. An owner comparing two proposals on the percentage sees two identical offers.

Why the percentage is the wrong comparison

The management commission is one of six deductions between the rate a guest pays and the transfer that reaches an owner’s account. The others are the platform’s commission, the regional accommodation tax, the channel manager and payment processing, the actual cost of running the villa plus any markup on it, and final income tax on the gross rent.

Across a plausible channel mix the platform layer alone is comparable in size to the whole management commission — and Airbnb is the only one of the three major platforms that publishes its rate at all.

So there are at least three ways for two 20% offers to differ by more than 20% differs from 18%: whether staff are inside, whether third-party costs are rebilled at cost or cost plus, and what your channel mix looks like.

The five questions, again

They are the same five every page on this site ends with, because they are the comparison:

1. What is the commission calculated on — gross booking value, or what is left after the platform?
2. Are villa staff salaries inside the fee? If not, what is the current monthly figure for a villa of my size?
3. Are third-party costs rebilled at cost or cost plus?
4. Which platforms, at what commission on each?
5. Can I see a specimen monthly statement?

Ask two companies the same five and write down the answers. The spread between the answers will be larger than the spread between the percentages, and unlike the percentages it will tell you what you are actually buying.

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