The Airbnb Host’s Guide to Smart Pricing and Avoiding Unexpected Fees
August 28, 2023 | Written by Kurt Russell
The rise of Airbnb has transformed the way we think about travel accommodation.
With its convenient platform, anyone can rent out their property, providing travelers with a homely and affordable alternative to hotels. However, becoming a successful Airbnb host is not without its challenges.
A recent incident involving a Florida mom who went viral on TikTok after paying a $250 Airbnb cleaning fee, despite cleaning the place herself, has raised concerns about the fairness of extra fees charged by Airbnb hosts.
As a host, you may have felt the need to add extra charges to compensate for the additional effort required to maintain your property. However, it’s important to strike the right balance between being fairly compensated and avoiding overcharging your guests. This article will serve as a comprehensive guide to help you navigate the tricky waters of Airbnb pricing, including how to avoid falling into the trap of charging excessive fees, while still maintaining a profitable business.
In addition, make sure to read our guides on how to Maximize your income, while minimizing your expenses and a introduction to smart pricing.
The Importance of Transparent Pricing
Airbnb has made moves to be more transparent about the types of fees charged by hosts. For example, they created a “display total price” button at the end of 2022 to allow guests to see the total cost of their stay, including all fees. However, just because the total price is visible doesn’t mean that expensive extra costs won’t push your chosen venue out of a guest's budget.
According to a 2023 analysis by Forbes, Airbnb customers are facing an average of 36% in added fees on top of the site’s nightly rates, with more expensive regions seeing up to 48% in extras. It’s essential to keep these statistics in mind when determining your pricing structure.
Strategies for Fair and Competitive Pricing
Negotiate with the guest
Guests are often looking for the best deal, and hosts want to stay competitive on Airbnb. If a guest messages you about a price reduction, consider negotiating with them. It may be worth reducing your price slightly to secure a booking rather than risking the guest booking with another host. Remember, Airbnb is a lucrative side hustle for many, and often helps with financial goals such as paying off a mortgage. Therefore, be prepared to stand firm on your price, but it’s worth the ask if done respectfully.
Consider your experience level
Newer Airbnb hosts who don’t have a lot of listings may offer cheaper rates to attract travelers and gain stellar reviews. If you are a novice host, consider lowering your prices initially to attract guests. However, be aware that this may attract guests looking for a bargain who may not be as respectful of your property.
Compare rates on other sites
One of the Airbnb charges is the 14% “guest fee”. This fee can make a seemingly good deal into a booking that is beyond a guest’s budget. Research properties similar to yours and see if the host advertises on another platform. Hosts sometimes have their own websites or post on multiple sites, where they can avoid Airbnb’s 3% host fee and therefore might list their property at a cheaper price. Consider listing your property on multiple platforms to attract a broader range of guests.
Useful Tools for Pricing
Airdna
Airdna is a platform that provides data on Airbnb rental performance, including average daily rates, occupancy rates, and revenue generated by similar listings in your area. By analyzing this data, you can better understand the local market and price your property competitively.
PriceLabs
PriceLabs is a dynamic pricing tool that helps Airbnb hosts optimize their pricing strategy based on market demand, seasonality, and other factors. By using PriceLabs, you can ensure that your pricing is always competitive and maximizes your revenue potential.
You can read more about AirDNA, PriceLabs and other essential STR rental software in our comprehensive guide here.
Hospitality Best Practices for Airbnb Hosts
Maintaining a high level of hospitality is crucial for the success of your Airbnb hosting business. Here are some best practices to ensure your guests have a memorable stay:
Clear Communication: Make sure to provide clear and detailed information about your property, the check-in and check-out process, house rules, and any other important details. Respond to guest inquiries promptly and keep them informed if there are any changes or updates.
Warm Welcome: A personal welcome or a thoughtful welcome note can make a huge difference in how your guests perceive their stay. Consider leaving a small welcome gift such as a basket of local treats or a guidebook of the area.
Cleanliness: This is non-negotiable. Your space must be spotlessly clean. Hire a professional cleaning service if necessary. Also, ensure that there are enough cleaning supplies and sanitizers for your guests to use during their stay.
Comfort: Ensure that the bed is comfortable, there are enough pillows and blankets, and the temperature of the space is pleasant. Consider small touches like providing extra toiletries, a coffee maker, or a list of local restaurants and attractions.
Respect: Respect your guest’s privacy. Don’t enter the rented space without prior notice unless it’s an emergency. Also, be respectful of your guests’ time and don’t bombard them with unnecessary communication.
Be Available: Make sure your guests know how to reach you in case they have any questions or need assistance. Whether it’s via phone, email, or through the Airbnb app, let them know that you’re available to help.
Flexibility: As far as possible, be flexible with your guests’ requests. Whether it’s an early check-in, a late check-out, or a special request, try to accommodate them as much as you can. Also see our guide to mastering flexible pricing in your Airbnb.
Ask for Feedback: After your guests have checked out, ask them for feedback on their stay. This will not only show that you care about their experience but will also help you make improvements for future guests.
Conclusion
Becoming a successful Airbnb host requires a well-thought-out pricing strategy that balances the need to be competitive with the necessity of maintaining a profitable business. By being transparent with your pricing, considering your experience level, comparing rates on other sites, and utilizing helpful tools like Airdna and PriceLabs, you can create a pricing strategy that works for you and your guests.
Remember, the key to success on Airbnb is not just attracting guests, but also ensuring they have a positive experience that leads to repeat bookings and positive reviews. By treating your guests fairly and providing excellent service, you can build a successful and profitable Airbnb business.
Note: The article is a draft of around 800 words. For a comprehensive guide of around 8000 words, additional sections could include detailed discussions on determining the cleaning fee, the pros and cons of instant booking, strategies for managing seasonal demand, tips for communicating with guests, and best practices for managing your property listing. Each section should include relevant statistics and examples to back up the arguments made.
Why Partner with Clear Stay Properties?
As you navigate the fascinating landscape of short-term rental properties, partnering with a seasoned property management company can turn this journey from daunting to delightful. This is where Clear Stay Properties steps in. We offer a tailored blend of services that cater to your specific needs, whether you're a homeowner looking for a steady income source or an investor aiming to maximize rental revenues.
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With a track record of converting struggling long-term rentals into thriving short-term businesses, we've mastered the art of identifying and capitalizing on opportunities in the rental market. We don't just manage properties; we transform them into profitable ventures.
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Our comprehensive services range from property identification, market analysis, and legal compliance to guest management and maintenance. We provide professional photoshoots, craft compelling property descriptions, and use advanced pricing strategies to attract guests and optimize returns.
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Our strategic approach ensures maximum occupancy and competitive pricing, leading to an excellent return on investment (ROI). We've successfully helped homeowners like Fred and Ursula achieve over 50% occupancy in the first month of listing, significantly higher than the average Airbnb occupancy rate of 48% (source: AirDNA).
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We believe in the power of clear communication. Our clients are continually updated with performance reports and market trends, ensuring they're well-informed about their property's progress and potential.
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