Why Every Airbnb Listing Should Include a Separate Cleaning Fee: Maximize Profit and Attract More Guests
Setting your pricing for the first time can be a daunting experience. It’s essential to ensure you’re neither under- nor over-charging for your property. One critical principle to keep in mind is that the guest should always pay the amount they are quoted on the website. Adding extra fees after booking not only creates a poor experience but can also lead to your property being banned from the booking platform. Of course, if a guest wishes to modify a booking, resulting in an extra charge, that is perfectly acceptable.
Structuring Your Pricing
Many Airbnb owners initially start with a nightly rate that includes cleaning. However, this approach can be problematic, especially for shorter stays.
Including cleaning in your nightly rate might seem like a simpler option, but it often results in reduced profitability as the stay duration decreases. For example, let’s consider a scenario:
- A one-night booking at $200 with a $150 cleaning fee results in a profit of $50.
- A two-night booking at $400 with the same cleaning fee results in a profit of $250.
As you can see, shorter stays can lead to lower profitability if the cleaning fee is bundled into the nightly rate. This situation often leads owners to believe that one-night bookings are not worth the effort—and they’re right if the cleaning fee is included in the rate.
However, many guests are looking for one-night stays, and because there is less availability, they are often willing to pay more. Instead of setting an all-inclusive rate, it’s more profitable to split the nightly rate into two components:
- Base Rate
- Cleaning Fee
For example, you might set your base rate at $100 and your cleaning fee at $150. The total cost to the guest is $250, which makes it worthwhile for you to accept one-night bookings. This structure not only increases your profitability but also makes your property available to a larger market, increasing the chances of being booked.
The Benefits of Separating the Cleaning Fee
By separating the cleaning fee, your bookings remain profitable regardless of the stay duration. This approach ensures that even short stays contribute positively to your bottom line.
Additionally, you may want to consider adding a linen fee per person to cover additional costs if your cleaners charge you for linen on a per-bed basis. Just be sure to evaluate the total price to ensure it remains competitive in the marketplace.
An owner shares:
“Our competitors are stuck in the dark ages. They set a minimum 7-night stay period for peak seasons and miss out on many bookings because there are so many guests now looking for shorter stays.”
This comment highlights the importance of flexibility in pricing and the value of attracting guests seeking shorter stays. By structuring your pricing to include separate fees for cleaning (and possibly linen), you can tap into this market while maintaining profitability.
Final Thoughts
Incorporating a cleaning fee into your Airbnb pricing is a smart strategy that ensures profitability across all booking lengths. By separating the cleaning fee from the nightly rate, you make your property more appealing to a broader audience, especially those looking for short stays. This approach not only improves your chances of securing bookings but also maximizes your revenue, helping you stay competitive in a dynamic marketplace.
