Cleaning costs

[Caroline1034]

How much is the average percentage you can expect to fork out from gross revenue to cover cleaning expenses? I run a small guesthouse and lately my cleaning costs have increased to 24% of the monthly gross revenue just in labour costs, that's excluding the service vat tax, cleaning products, electricity & water expenses to do the laundry in-house, etc. Is this too much? I don't charge a cleaning fee as most of my stays especially in the low season are just 1 night. 

[Lorna170]

@Caroline1034  Have you done a study of your overhead expenses?  It sounds like you may need to increase your nightly rate if you feel that your expenses are cutting into your expected profit.

My net profit margin after ALL applicable expenses is 52%.  I could do better, but I prefer less rentals at a higher rate.

[Caroline1034]

That's the thing, in the low season the rates have to be very low to fill up the rooms - I would prefer to have less rentals with a higher rate as well (less work for me plus less wear and tear of everything), but then I would lose my cleaning staff as they need to have a year-round income. I am happy just breaking even without making much profit in the low season, as I know I will make up for it in the high season with much higher rates, but every year cleaning and other overhead costs, not to mention maintenance, keep increasing to a point where I feel I'm starting to work at a loss for 5 months of the year. 

[Mike-And-Jane0]

@Caroline1034 We got lazy and didn't check if the launderette we use is competitive. It was only when they increased their prices by 20% that we looked around and found a better service 10% cheaper than our launderettes original prices! I suppose my point is that perhaps you need to look for cheaper cleaners OR have an honest conversation with them regarding low season and see if they will cut their rates then to allow you to keep open. Also consider a 2 night minimum stay as this will immediately halve your cleaning fees on a nightly basis.

[Lorna170]

@Caroline1034  If you are concerned about keeping your cleaners, you may want to do what we did.  We negotiated with our cleaner and offered a monthly guaranteed income during the slow season, even if we had only one or two rentals.  To accommodate that guarantee, they were paid slightly less during the busy season, when multiple rentals would generate more income.

We have kept our cleaners for more than 15 years and they are so loyal and caring.

[Rebecca]

Hi @Caroline1034 👋

What did you decide to do with your cleaning fees in the end? It would be great to hear from you! 

[Susie258]

Good morning @Caroline1034, at the most for cleaning fees I think  should be between $65 and $75 dollar a night .The Utilities And Internet they are set up to come out of the account once a month. I’m looking for a honest Co-host or a honest Property Management Company to help me with my Airbnb. I would prefer the booking to be 2,3  or more nights a week . A one night  booking will not work for me . Please let me know if you can help. Thanks