Are extra discounts the 'new normal'?

[Huma0]

Now that UK calendars have been unblocked and the Government is easing lockdown restrictions, I have started receiving enquiries again from potential guests, but no instant bookings or requests to book so far, probably because every single one is asking me to give them an additional discount/special offer, often with phrasing such as, "given the current circumstances"...

Normally, I never agree to these kinds of requests because I host long-term guests and have always had weekly and monthly discounts built in. Besides that, the rooms are priced very low for what they are even before the discounts. However, given that they have been empty for months and I've lost I don't know how many £thousands in income from cancellations, I have been offering to reduce the already discounted price by a further 10%, which means the guest is getting more than 25% off. I can't go any lower than that because the rooms are already at the minimum nightly price for the foreseeable future (they would be a lot higher in July/August/September under normal circumstances).

Still, this doesn't seem to be good enough for the guests. They appear to want Airbnb rooms for the price of a long-term rental, but a long-term rental normally requires a year's contract, sizeable deposit, paying your own bills/Council Tax and doing your own cleaning! I imagine they would still expect the same standards, service and facilities from the Airbnb as a guest paying full price. Besides, these days there is a lot of extra cleaning involved.

The way I am starting to think about this is, while it is natural that people will bargain hunt knowing the market is at a low point, shouldn't they be supporting small businesses right now instead of taking advantage of those who are struggling? If, unlike me, you are lucky enough to still have your job (most of the enquiries are from guests coming to London for work) or can afford to holiday for weeks at a time, is it fair to expect hosts who have lost huge amounts of income to subsidise your vacation/lifestyle? It's not very ethical nor morally sound. I know the guests are not seeing it from this perspective, but that's what it boils down to!

What's your opinion? Would you offer higher discounts because it's better to have some income than none, or would you stand your ground?

[Tony-And-Una0]

We don't offer additional discounts.

We have already priced ourselves competitively. 

We have had requests,  we think it s fair enough that people inquire. We don't take the view that these people think we are stooges or people seeking out decent folk  We reply by saying that our prices have already been adjusted to take account of the current situation. The majority have then proceeded to book with us and have been lovely guests.

[Huma0]

Thanks @Cormac0 @Russell49 and @David3267 .

I will be doing some more research on Airbnbs in my area to see what they are charging, but there are only a few that are comparable to mine, so I might need to search a bit further than my neighbourhood to get an idea of what I should be charging right now.

However, I believe you are right and I certainly won't be agreeing to additional discounts, just reminding those that ask that there is already a long-term discount, which is what I always did prior to COVID-19.

[Luke279]

@Huma0 When i started to read this thread i thought, 'oh she must be renting just a standard room out in London' then the more i kept reading it didn't make sense, so i pressed on your profile to view your property/rooms. 

Mind blown! You have an extremely wonderful property on offer to potential guests, you at no stage should be discounting your rate even further. In my own opinion you should be raising your rate! 

I think going on trial and error with my own properties in Bristol, we can always become comfortable when we find the price that generates attention, yet doesn't represent the quality you have on offer. 

Personally, I would raise your prices and remove the discount. Even after doing this your sit and think 'oh my' im not getting bookings! Yet trust in the process, your get more bookings from those that respect what you're offering than those asking for silly discounts. 

[Huma0]

@Luke279 

Thanks for your words of encouragement and your nice comments.

I am sure you are right that my rates are quite low. There are cheaper Airbnbs in my neighbourhood but the ones that compare to mine are quite a bit more expensive. People have been telling me for some time to raise the prices. One of the reasons I keep them low is because I host long-term guests and many of those (perhaps the majority) are students.

However, normally, the rooms would be priced quite a lot higher at this time of year, but with all that's been happening, I turned Smart Pricing (which I normally ignore) back on and it is putting every night at the minimum rate.

What would you suggest as a nightly (or minimum) price, approximately, having seen my listings?

[Huma0]

I wanted to post an update RE the guest who booked at the advertised price. He checked in just under a week ago and is lovely, respectful and very undemanding. He seems very happy with the place.

It turns out that he used to Airbnb a property in my neighbourhood at a much higher price than mine, so he knows full well that the price I charge is already cheap for the area. In addition, he has a secure job as the managing director of a financial company and seems to lead a pretty nice lifestyle. A broke student he is definitely not.

So why did he ask for an extra discount? I haven't brought it up as I think it wouldn't be very tactful, but it does reaffirm my belief that a lot of people are asking for extra discounts right now, not because they can't afford the advertised price or think it is overpriced, just because they think discounts are out there to be had right now.

[Debra300]

@Huma0,

Last year I hosted a British woman who also was a host in Barbados, and had come to St. Lucia for business.  During her time, she asked and my husband agreed to drop her off at the hotel where her conference was every morning on his way to work.  She didn't offer to pay him anything (he wouldn't have accepted, but it's the gesture that counts).  One time, I took her to a shopping center, and she saw a dress she wanted, and kept badgering the salesclerk for a discount (there was nothing wrong with the dress).  Ultimately, she paid the marked price for the dress.

After her first stay, she wanted to return in a couple of months for a second conference, and asked me for a further discount beyond the weekly discount provided.  I told her in an irritated tone that I was quite surprised that a fellow host would try to cut the rates even more.  She responded, "Sorry luv, I didn't mean to offend you.  We English always ask for a discount."  I didn't give her more of a discount for her second stay.

So, like your guest, there just are some people who ask for a discount as their general rule for doing business, and not because they can't afford to pay the listed price.

[Huma0]

@Debra300 

That's very interesting. That guest sounds very cheeky indeed.

There are many cultures where asking for a discount is the norm, including many parts of Asia, parts of North Africa etc. etc. 

The UK is not one of them! It's absolute nonsense for that guest to say, "We English always ask for a discount." If you went into a shop here and started haggling over a perfectly good dress, people would think you were mad.

Any short-term guests who have asked me for discounts in the past were never British, nor European for that matter. It's not part of the culture. The British are too reserved for that and would normally find it embarrassing to ask. I used to cringe when my mum would haggle in shops. She grew up in Pakistan, so it was normal for her, but not for me!

Long-term guests are a different matter though. It's not a cultural thing, so much as they think a longer stay is more open to negotiation. Still, until this COVID 'new normal' situation, I have never had an English person, even a long-term guest, ask for a discount. This was the first time, but at least he still went ahead and booked at the advertised price when I said no.

Your guest was just 'taking the p*ss', as we would say in England 🙂

[Helen350]

Oh Yes @Huma0 ! This English, former owner of an Asian mother-in-law understands! 🙂

[Emilia42]

@Huma0 That is strange. I see asking for a discount to be embarrassing since it puts the host in an uncomfortable, on the spot situation but for some people, it's as nonchalant as asking about the weather.

[Huma0]

@Emilia42 

I find that most people feel the same way, during 'normal' times. When I say that before, I would get requests for discounts from potential long-term guests, I did not mean the majority of them, but just from time to time, certainly not more than 10%. Usually these guests did not realise there was already a long-term discount and were happy to then book at the advertised rate.

The difference now is that people don't seem embarrassed to ask as they probably think that everyone is offering extra discounts. Or at least that is how it seems.

Of late, I have received six enquiries. Out of these six, five asked for extra discounts. Of these, four were for long-term stays and one was a 'professional' film crew wanting to use my house for a 12 hours day for £100, due to the 'current situation'. Seriously?

The only one who did not ask for an additional discount was actually a short-term guest, asking me to reduce my minimum stay. 

So, given that this is far from the normal percentage of guests asking for discounts, I have to conclude that it's because of COVID-19 that people are suddenly losing their inhibitions! 

[Huma0]

Also, I should add that not one of these people were out of a job, key or frontline workers or had any COVID-19 related reasons for not being able to afford the advertised price (I know because I am asking people about their work situation for safety reasons). They were just chancing it.

The video producer said she was working on behalf of a commercial client, but offered me less than 10% of what any location agency would charge her for my place. People must think Airbnb hosts are mugs.

[Huma0]

Part of the problem, which I mentioned on another thread, is that a lot of people seem to think that Airbnb hosts are making money for nothing, i.e. that they own these lovely properties, which they choose to rent part/all of, but don't actually need the money, s if it's just a hobby. The money and  time a host puts in, whether that is bills, taxes, admin, correspondence, cleaning, laundry, check ins, whatever, are not considered at all. This is apparent from all the guest responses regarding COVID-19 cancellations, asserting that the host is 'losing nothing, so why should I have to pay anything?'

So, the logic would then follow that, if you have an empty room, you are going to be willing to take something for it rather than nothing as it's no skin off your back...

[Debra300]

@Huma0,

I've been the UK, London in particular, several times.  I am well aware that it's not normal course for English people to try to haggle for discounts in shops or places that aren't open markets.  Also, many of my guests in St. Lucia are from the UK, especially when cricket is in play, and we are just a five minute walk from the stadium.  None of them have ever asked for a discount, or ask for extra favors.

However, even before COVID-19, I would get the occasional request for discounts.  The one that really took the p*ss was from an American.  I already had my rates low for the market, and he asked for a discount because it was low season, and he saw that others were offering a discount.  He then sent a second message to tell me that he's retired and his wife had worked in the travel field, and they actually have a place in Marigot Bay, St. Lucia.  They were coming down, and wanted a place close to Rodney Bay Marina to service their SAILBOAT!!  I told him that I could not accept his request for a $2.30 p.n. further discount (yes, the man wrote me two essays length messages to justify that piddly discount), because I am not yet retired and need to pay my mortgage.  He didn't respond.

[Huma0]

@Debra300What? These people with a holiday home and sailboat were haggling over $2.30 a night? That sounds to me like folk who are both materially rich and time rich!

It shouldn't surprise me that much though. I had a guest (long-term) who was disputing a £50 difference overall in the accommodation costs for a 6.5 week long stay (so, we're talking about £1 per night). She had decided to switch rooms but said the adjusted price I was sending her (cheaper than the first room) was £50 more than if she went to do a new booking directly. I called Airbnb who confirmed that the price I was quoting was correct and that the other price she was seeing was some sort of technical error. Still, she wasn't happy. I should have taken that as a massive red flag.

This guest turned out to be a total nightmare. In fact, she is the only guest (out of hundreds) whose stay I terminated early. That is how bad she was. Besides that, her protestations of being a poor student didn't quite ring true, given that she left the room littered with all the shopping bags/shoe boxes from the many designer items she'd bought while staying here (amongst a lot of other, sometimes gross, stuff I mentioned in another post).

Don't get me wrong. I am not a haggler (even feel a bit shy about doing that at markets, where it's expected) but I am a real bargain hunter, so I understand people wanting to get stuff at the best possible price. Still, trying to haggle someone down over $2.30 or £1 a night? Seriously? Our time responding to that is worth more...