How do you set your prices, and attract a certain type of guest?

[Laura2270]

I'm defining "homeless" here as someone who has an income, but can't or doesn't want to actually lease a place.  Guests that are bouncing from ABB to ABB.  Guests "new to town" looking for an apartment.  Guests that have been recently evicted. Basically any guest that isn't travelling for work or pleasure.  

I'm a new-ish host (Oct. 2018), but I've had over 40 guests in that time.  I've noticed that Airbnb wants us to set the prices as low as possible to keep getting booked.  When my price goes a little above the Airbnb dip, I stop getting reservations.  Unfortunately, if my price goes too low, I get homeless people.  These people typically show less respect for my rules and my boundaries.  They typically alter the decorations and abuse any hospitality that I show them.  They leave messes and stain my sheets / towels / carpet.

The numbers just don't make any sense.

I'm in the Denver area.  Typical hotel prices near me are in the $80/night range.  Airbnb wants me to list my rooms at $24/night (I'm currently listing one at $30 and the other at $35).  

Cheap apartment rent near me is nearly $1000/mo.  At $30/night that's only $900/mo.

If someone is using Airbnb for actual living, even if they move every single night, here are the advantages:

- no background check

- no rental history

- If they stay in the cheapest places, rent is lower than an apartment.

- don't have to pay monthly

- most of the advantages of a hotel at half the price.

When I first thought about hosting, I thought the price would be lower than, but close to hotel prices, because you get the hotel treatment (fresh linens, shower, possibly other amenities depending on the listing) but you also get to be away from the hotel traffic and guests on all 4 sides and super long walks from your parking place to the room.  You potentially have access to a kitchen, entertainment center, dining area.  All of these things are better than what a hotel has to offer, so why are the rates so much lower than a hotel?

Why does ABB insist on us setting our prices to the point that if you take more than 1hr to clean the room, you're losing money?

I tried raising the prices by a little, and I stopped getting bookings.

I tried removing same-day bookings.

I tried increasing the minimum stay to 2 nights.

The only thing I haven't done is remove instant booking and ask what the nature of their travel is, because that's an easy question give a false answer.

I've recently updated my house rules so instead of relying on decent people being guests that there's a code of conduct that they've agreed to so that if they break it, I can kick them out.  But you can't add something about if you're not here from out of town and plan on returning.

What do each of you do?  Is it just my location? 

I'd like to hear from others in the Denver area if possible, but any ideas are welcome.

[Ben551 · Accepted solution]

Hi @Laura2270 - you might want to read a few posts of mine from a few weeks ago.

I followed Airbnb recommended prices at first, until I put the time in to doing the analysis and research.  It took some time to do, so you have to be up for investing the time is all, but I learned very quickly that Airbnb pricing was about 35-40% lower than the comparable competition in my area.  I lost a lot of money in my first season as a rookie, not knowing that Smart Pricing was literally "Moron Pricing".

Here are a few links that might be helpful, which best detail my 'price optimisation' journey:

This is where SEO analytics showed me Smart Pricing was useless

This is how I calculated my break-even nightly room price

This is how I doubled my profits using a third-party Intelligent Pricing Tool

[Laura2270]

Thanks for those links.  I'll check them out soon.

[Suzanne302]

@Laura2270

Ignore those price tips from ABB! There is no rhyme or reason to them at all.

While I can't speak to your specific area, anecdotally and from personal experience I've found I get a few bookings more than a month out, but the majority of my bookings in the "slow season" come usually within two weeks of the stay. As a matter of fact, I usually raise my rates if I am not booked a week in advance.

If you can afford to experiment, just try raising your rates and see if you get those last minute bookings. Check what other hosts with similar listings are charging in your area as well.

[Rodriquez0]

Wow I just had my first guest and  on the surface she was a sweet hardworking young female that was celebrating her boyfriends birthday and thought it would be nice to have a 'home setting'. Shame on me and using my heart in business. I never defined homeless as exactly what you defined it as. However, it's none of my business as long as they abide by the rules. There is a slippery slope into the discrimination sess pool if Pre Check in protocol is in any way more specific than what is already in place. I had a minor loss financially with the first guest ( she stole sheets and towels) and her body odor literally cost 26.79 in air cleansers I had to flip the mattress etc. But I learned a fundamental life lesson in business. It's business! From here on out I will add  a security deposit and a increased cleaning fee. In my listening I asked for the guests to please NOT treat my home as a  hotel. In conclusion airbnb is not a hotel just like uber & Lyft/ aren't taxi cabs. I needed to  adjust my thinking and realize that.

[Laura2270]

It's definitely a slipper slope, but as you said, we have to think about this as a business.  We may want to help everyone we meet, but if they're booking because they have nowhere else to go, the odds are higher that they won't respect your home or your things or even your rules.

I'm nervous about setting up a cleaning fee, because I don't want people to feel like they need to "get their money's worth" out of that cleaning fee and leave a horrible mess.  I'm sure that most wouldn't do anything, but if one person decided to destroy the room (no damage, just horrible cleaning... use your imagination) because they paid to have it cleaned, I don't know if the cleaning fee would be worth it.

[Julie143]

The bigger issue with people who have nowhere else to go, at least for me, is that they are more likely to become squatters.

The laws around this vary from country to country and state to state. It’s worth knowing how many days someone has to stay with you before they become legal tenants. If they are a tenant, it much harder to get them out. You have to go through a whole eviction process which can take months in some areas. While that’s going on, they can live with you rent free.

[Summer64]

I have a cleaning fee. It was $5 and just recently raised it to $10. I think a small, reasonable cleaning fee is fine. I think that you run the risk of real resentment when you start charging a lot. My thoughts.

[Alice1248]

Thank you. 

My boyfriend and I are homeless and live in a Motel 6 for 4 months. We had to move rooms once and the head maid even came knocking on our door to compliment us and said she never saw a cleaner room from a guest. We cleaned everything top to bottom before moving. 

Before Motel 6, we went from hotel to hotel but the prices kept increasing and increasing. 
But we always pay on time, respect others, follow the rules, and clean up after ourselves. 

So many people hate homeless people and honestly, I know a lot of homeless people like us but I do know some that have no respect to others’ spaces whatsoever. 

I feel so hurt when people generalize homeless people and/or couples (homeless or not) because my boyfriend and I are the complete opposite of what they believe homeless people to be.

I had a good job until they laid me off immediately when COVID hit in May 2020. Then after applying and applying, I finally got a job for Christmas season last year (2021). Now, I have been applying for so many jobs but I either never hear back or they won’t hire me cause they find out I’m hearing impaired. I have my bachelor’s degree and have a great resume but no luck whatsoever.  Luckily, my parents help out financially from time to time.

But my boyfriend and I are tired of being kicked out of hotels just cause they realize we’re homeless although we’ve done nothing wrong, tired of people treating us like worthless pieces of trash or horrible people, and we do our best to prove to others that we aren’t like society’s image and generalization of homeless people but no one cares enough to listen/see it or they just are adamant that we are rude filthy people who are disrespectful, lazy, and try to get our way by manipulating or harming people which is so far from the truth with most homeless people. 
We want to be treated with kindness and respect just like any other person and most of all, to be given a chance to prove that we aren’t what you think we are. 

[Julie143]

I wonder if it would be allowed to write “ no locals” in a listing. 

When I allowed one night stays, I started to get some less than ideal requests from very young locals. Most were related to partying and “chilling and hanging out” rather than homelessness. 

You live a 10 minute drive away, why can’t you chill and hang out in your own home? Let your own Mom clean up after you, because I don’t want to. 

Other possibly bad reason for locals to book:

prositutution

drug dealing or manufacturing

No Tell Motel (i.e people having affairs)

Of course local people could book for valid reasons too, maybe they are having renovations done in their own place or their pipes burst. Not sure it’s worth the risk, though.

If the You-know-what hits the fan, and you have to give them a bad review or make a claim, they are only ten minutes away and know where you live.

Until I figure out if I’m allowed to ban locals, I’ll probably stick with the two night minimum. I was having to decline too many sketchy people, which isn’t good for the stats.

[Laura2270]

So in the few days since this original post, my two guests that are booked (one is here, the other arrives on Sunday) are both in the "new to the area and trying to find an apartment" category.  They've both booked for 2 weeks (my maximum stay allowed), and if they both turn out to be decent, then I have nothing to worry about.

The guest that's already here has stayed with me before.  He was my first week-long booking back in late October / early November.  He's a nice enough guy, and I think everything will work out fine, but if he doesn't find a place in that 2 weeks I'm pretty sure that he's going to ask if he can book again, and it'll put me in the awkward position to have to tell him no.

Because of having two bookings for 2-weeks and both of them being currently home-seeking, I've updated my settings to remove automatic booking.  Someone on my other thread mentioned asking people the nature of their travels.  Declining a booking if you don't like the answer has no consequences, and it's easier to decline before the booking is accepted than it is to get someone out if things are going sideways.  The concerning part is that ABB says that they lower your listing in search results if you're not set to instant book.  So we'll see how it goes.

[April196]

I have been hosting in the Cincinnati area for 4 years, and I have found a few things that deter the 'locals' as we call them. Max 7 day stay, as I have noticed they usually want to book long stays, and this protects from any chance of a legal tenant claim. No automatic bookings, I have never allowed this in 4 years and my listing is always at the top when you search my area. Even so, I will usually accept every booking, even from new accounts with zero reviews, and I dont ask questions, but the worst case scenario is I am stuck with them for max seven days, then they have to check out. If they have worn thin their welcome and I'm ready for them to go, I will go ahead and block out the days following their booking. If they ask to book again, I tell them family is coming in and the space is unavailable. It works great with no awkwardness. 

As for pricing, I find that charging a little more is preferable- you may not book every night, but the higher rates will make up for it in less nights booked and less work for you anyway. When I charge a little more, I tend to get fewer bookings but they are more the 'travel for work and leisure' folks. 

[Sandra126]

@Laura2270, if you don't want him to stay on, you could always block the date/dates/ after his checkout time for an imaginary booking. Or tell him that two weeks is the max any guest can stay, that is the limit. Cannot rebook to extend.

[Dennis264]

I rarely get a request from locals, and I have a minimum 2-day maximum 10 day listing.  But this is a town of 32,000.  I have cancelled one AirBnB booking after calling them because it was local, and looking at online court records she had a criminal record including shoplifting, evictions, DWI, unpaid court fines, theft, and drug possession (since cannabis became legal here, so it was something much worse) and had just been released from jail.  Once I sent a copy of the court records and the link to AirBnB they cancelled the booking and her account.

If your area has online court records, be sure to check local guests once you get their full name.

[Alice1248]

Who cares about drug possession?? Drug users aren’t bad people automatically