Fees effecting my occupancy

[Michelle3221]

Hi all, this is my third year on Airbnb. I’ve noticed the first year was incredible, the second and third, not so much. Last year my smart pricing locked at the lowest rate for the entire summer and I ended up getting very low bookings. This year, multiple people are complaining about the fees. If people are willing to pay $350 a night, after taxes and fees they are almost up to $600. Even if I lower my nightly rate, minus my host fee and cleaning fee, I’m cutting into my bottom line and my income is significantly lower for the season. This is a seasonal rental so we heavily rely on airbnb for the summer months. Anyone else have this issue? 

[Karen114 · Accepted solution]

@Michelle3221  Yes fees are the bane of everyone's existence for both host and traveler.  Even if your guest stayed at a hotel they will be paying local and state taxes, parking fee, resort fee, pet fee etc.  Not all hotels have all of these fees but many do.

Are you using a pricing software such as Price Labs?  That can really help you to understand where your rates are in comparison to others.  I keep my rates on par with a Hampton Inn that is right down the street from me. 

What I did about a month ago is got rid of my cleaning fee.  I sat down and tallyed up every expense tied to the property including my cleaning fee if I were to not charge guest for it.  I then divided that total by 30.  That gave me the amount of my daily expenses. I then muliplied my daily expenses by 3.50.  This gave me my absolute lowest nightly rate I can rent for that covers my expenses and not charge a cleaning fee and be profitable.   It has helped as bookings have picked up quite a bit.   Sometimes you just have to put it on paper for it to make sense.   

[Michelle3221]

That’s super helpful! I’m going to consider doing that. Thank you for the reply! 

[Rebecca]

Hi @Michelle3221 👋

I can see that @Karen114's message has supported you really well. If so, it's always a lovely gesture to mark it as the best answer. It's like a big virtual hug to the member who supported you but also to support other Hosts who may have similar questions in the future. 😊

[Scott2173]

Is the 3.50 the variable for your profit margin in this equation? 

[Steven1821]

@Karen114 So if that amount is $105.

900/30 * 3.5.

What do you do. You add this to the daily rate and take out the cleaning fee?

wouldn't guests pass this up if our daily rate is now $300 no cleaning fee?

[Karen114]

@Steven1821  yikes this was a while ago when I posted. We have experienced a hurricane at our properties in Florida 6 units damaged so my brain is fried. 
I do all expenses including the cleaning fee. So if I have 4 cleanings per month @$100 per cleaning, that $400 is added to my expenses for the month. That’s every thing including  cable electric water etc. expenses will vary. 
I add this all up to get the total monthly expenses and divide by 30. Take that and x 3.50.  This gives me my absolute lowest price I can charge and be ok. Maybe you can do 2.50 or 3. You just have to play around with the Numbers. Hope this helps. My brain is mush right now.