Best way to factor in electricity in the daily rate?

Pau9456
Level 2
Manila, Philippines

Best way to factor in electricity in the daily rate?

Hi,

 

I would like to know how you factor in electricity in your daily rate. I've had a guest who spent almost 9,000 pesos (180 USD) for a month of electricity, while there are those who only have a bill of 60 USD. I can't charge too high because it would be unfair for those who are mindful of electricity use. 

 

I am currently requiring long-term guests to pay an electricity deposit of 5000 pesos per month. If their electric bill is less that this amount, I give them back the excess, but if its deficient, I ask for it via Airbnb's request money feature. UNFORTUNATELY, I recently had a guest who did pay for the 9,000-peso deposit but had a total bill of 15,000 pesos. He then had to pay 6,000 pesos more, but he has become unresponsive and unreachable, despite daily reminders. Even Airbnb could not collect the payment. I just gave him a review so other hosts can be warned. 

2 Replies 2
Jacob805
Level 3
Jupiter, FL

Hi, that's a difficult challenge. I like the deposit idea best, but it still poses the risk you describe. 

 

I have a couple thoughts. You had mentioned the reason you can't charge too high is because it would be unfair to those who use less. But are you able to set higher nightly rates according to your market demand? I imagine you're already rate-optimized there. But to my thinking, I would set the rates you're able to, to compensate if possible, even if that means those who use less ultimately pay more. To protect yourself. And perhaps if you do it that way you'd even be able to lower your electricity deposit. This would still leave you at risk. But potentially it would reduce the probability that someone exceeds your deposit AND the increased rate together.

 

Second thought is whether you have any ability to improve energy efficiency in the unit, like lights with sensors & timers, or new HVAC etc. But that of course is a large upfront cost in hopes to provide ROI while still leaving you at risk. Last thought is whether to require credit pard payment info, and inform them you will bill them offline and provide them an invoice, as a replacement of the electricity deposit. But that is not ideal for guests and would take more work on your part. IDK. Good luck. 

Pau9456
Level 2
Manila, Philippines

Hi @Jacob805,

 

Thank you for these! Found them really helpful. I've also seen that some have installed a system for them to control their airconditioners remotely. Unfortunately, I don't think these are readily available in our country.