Sheets definitely fall into the cost of goods sold category when we do our accounting. Replacement sheets are write-offs that should reduce your taxable income. Obviously good quality sheets that are durable should resist tearing under normal usage. If you are talking about deliberate tearing of the sheets—that's a different story. We have not encountered anyone tearing sheets on purpose so I guess we'd address that if it happens.
Other breakage depends upon the value of the item. When we first started my wife had placed a beloved, old lamp from her childhood in one of our rooms that got broken. While it was very disappointing, we also took it to be a lesson learned—don't put treasured items in your AirBNB. As for other items, we also consider them to be a cost-of-good-sold issue, unless they are large or expensive things like appliances. Once again, we haven't encountered any problems.
We have a disclaimer in our hot tub rules that states that guests may be charged for damage to, or misuse of, the hot tub.
If you are in a market that is prone to damages, like spring breakers at the beach, then I'd say your pricing should accommodate the need to replace frequently damaged or broken items. Simply plan for it.
I hope this helps 😉
