Airbnb new price transparency strategy - thoughts?
It was announced yesterday: https://news.airbnb.com/airbnb-is-introducing-total-price-display-and-updating-guest-checkout/
What is changing:
- Total price will now be shown up front instead of at checkout
- New pricing discount tools will be available
- Checkout chore lists will now be shown up front to the guest
- Search will now factor in the total price in the ranking algorithm
What are your thoughts?
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Hi Meredith,
I think the changes can work for Hosts who are more switched on than many of their competition and work in our favour.
How I set the Cleaning fees was a big consideration of how I priced my properties when working with Airbnb as I have found that a high cleaning fee can cause "sticker shock" to a potential guest who doesn't see value in too high of a cleaning fee.
When researching how to factor all the cleaning costs, linen supply, welcome gifts it was a challenge and I ended up settling for this:
Lower cleaning Fee but adding a fixed amount in the Resort Fee to make up the difference. The Resort Fee is rolled into the nightly price so the guest does not see this under the Cleaning fee. This is how I recoup the full cleaning fee, linen fees and welcome gifts back from the guest but without setting the expectation that comes with a high cleaning fee and having guests who will leave the property in a mess because they think they are paying a lot for cleaning so they don't lift a finger to tidy up after themselves. I calculated this on my Minimum stay of 2 nights.
To counter the extra cleaning that can occur from a longer length booking i.e 3+ nights I use the Community Fee feature to add a percentage to the booking which has the effect of picking up the extra money needed for those bigger cleans, more supplies etc.
You can also use the Management Fee to do the same if you have something extra you need to add like and Energy Surcharge or whatever.
These 3 Airbnb Fees all get rolled into the nightly rate so the guest doesn't see them as a seperate fee and doesn't feel the pain. They only see your modest cleaning fee.
I know another PM who uses Guesty and she can't use these fees with that PMS as apparently it does not support them so she has loaded her linen and supplies into the Cleaning Fee. The guest doesn't know all that and has an expectation that they are paying a premium for cleaning only. I suspect she is going to have trouble with the new pricing display model.
I'm am so pleased that Hostaway supports the Airbnb Resort, Community and Management Fee and as long as Airbnb keeps rolling this into the nightly rate I'm confident I can come up on top of the game against the competition in my market who are unaware of this strategy.
I'm not worried about the discount tools as I use Airbnb discounts in conjunction with Pricelabs to create offers that get extra boosts on ranking in Airbnb because it appears i am offering specials and Airbnb is going to promote these listings to Guests and I'm pretty sure they reward Hosts who are using these features. I'm sure Hostaway will be working on giving us the functionality to use the new discounts when they are released.
Checkout Chores - Don't have any other than please load the dishwasher and turn on. Please lock the door and put the key back in the lock box.
Lastly Search will factor in Total price - Pretty sure I can win this game based on my first answer. Time will tell if I'm right or have to rethink the whole strategy.
Hope this helps you and other hosts who read this.
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Thank you Mark. As a guest, I always thought it was ridiculous to search for a place in your price range, only to have it double at checkout, click back out and move on. Incredible waste of my time! I actually moved on to other platforms because I found it so annoying. And as an host, I’ll be keeping the chores to an absolute minimum. I don’t trust vacationers to do anything the way I want it done anyway. What’s the point? Having just joined Hostaway, I hadn't thought of how to handle Airbnb fees yet and I might just apply your same strategy. Sounds solid and transparent
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Hi Meredith. I agree with what you say from the Guest perspective. It is interesting that in Europe they show the total price already as that is the legislation there so Airbnb can do it. For some reason they chose not to do this in other markets and are now blaming the Cleaning Fee for the guests sticker shock.
You are absolutely right about Guest cleans. Everyone has a different idea of what is clean so at the end of the day to ensure you have a consistent offering and remain in control of a reservation it means we have to clean after each guest to maintain the standard.
The Resort Fee, Community Fee and Management Fees are your key to rolling whatever extras you need to account for into your total price without have a "Cleaning Fee" screaming at the Guest to niggle about. I'm currently trialing a property without a Cleaning Fee and have put the whole amount into the Resort Fee to see if it makes any difference to the bookings. Personally as a Guest I would wonder how Clean the house is going to be if there is no Cleaning Fee but I'll humor the gurus at Airbnb and see where this leads. Either way my cleaners get Paid.
Let us know if the strategy is working for you.
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