A lower platform commission gives hosts headroom: they can lower their nightly rate, retain higher margin, or invest in property improvements. This page outlines the common pass-through patterns observed in the industry.
If a platform charges 5% instead of 16%, a host receives an additional ~11 percentage points of the gross booking. How that surplus is allocated depends on the host's strategy and the local competitive landscape.
In practice, many hosts split the saving — a portion to guests through a slightly lower rate, a portion retained as margin. This is a strategic decision, not a guarantee of lower guest prices.
BookingOnABudget.com's 5% model is designed to widen this headroom. Whether and how each host uses it is up to them.