Location/value - I'm I charging too much?

Anne1325
Level 9
Melbourne, Australia

Location/value - I'm I charging too much?

I recently had 3 guests mark me down on location and value. Whilst our location is clearly described in the listing I will take that one on the chin, seems that you can’t please everyone as we do not live close to a large chain supermarket. Nope, correct, we live in a cashed-up lefty neighbourhood where people shop at the organic delis and fresh fruit & veg shops available. So, as per the listing, no Aldi indeed.

 

However value just baffles me. We have a 2 bedder and Airbnb out the spare room. By common sense you’d reckon that this should cover 50% of our total bills as they take up half the space and utilities. However after fees, taxes and tea/coffee/toiletries/laundry/cleaning products/etc it covers about 35% of our total bills. Helpful but hardly running a cash cow.

 

Our base price is $59 which I thought was really competitive in the market, and I compared this to people offering just the one room. We offer a room with a loft that can be used as a second bedroom which a recent guest, who scored us down on value, did.

 

When I then looked where she had recently stayed I noticed that she had rated a single room, out in the burbs but at 10 dollars less per night, as 5 star value. She then complained that this room was out in the burbs. Yep, that is what you get - the further out you go the cheaper it’ll be. Mind you, she still scored me down on location as well despite, surprisingly, not being in the burbs. Can you win? 

 

It seems that only those with one or two reviews mark us down on location and value but still, am I charging too much? What percentage of your bills do you reckon a spare room converted into an Airbnb should cover?

23 Replies 23
Paul1255
Level 10
London, United Kingdom

@Anne1325  I hope you are well.

 

To answer your question: you may not be charging enough!

 

Guests who book cheaper accomodation, and those that might negotiate a discount are often the ones who mark down on value- which sounds strange but is true.

 

You could try increasing your price- you can always bring it back down if guests don't book, but I would give it a shot and see what happens 🙂

 

Best wishes

 

Paul.

Robin4
Level 10
Mount Barker, Australia

@Anne1325 I agree with @Paul1255 ....bottom dwellers cause you the most issues.

Anne, over my Airbnb hosting career I have received 212 reviews. 195 of those have been 5 star. 10 of the remaining 17 reviews have been perfect for every category and reviewed as a perfect stay, it just wasn't perfection so the guest gave 4 stars.

The remaining 7 guest reviews gave me 4 stars overall and 3 and 4 stars for value. On each of those occasions those guests removed everything they felt they may be remotely entitled to from my listing. One of them even cleaned out the medicine cabinet.....$80 worth of medical aids gone, all the soap they could find in the re-stock cupboard plus whatever chocolates they could lay their hands on......but my listing was still only worth a 4 star for value and overall as far as that guest was concerned. They left here with considerably more in value than the total amount they paid to stay.....but it was still only worth a 4 star for value.

Anne, let it roll off you, we will come across undesirables....not many of them but it will happen. We can either say, 'I don't want to do this any more' or, we can say....'on your way, I hope our paths never cross again' and get on with hosting!

 

Anne, every now and then you are going to get a guest like this, it won't happen often so don't get too upset by it. These people have to live with themselves and I have always been a great believer in Karma.

 

As Paul says, I would raise your price to discourage a few of these turkeys. It is better to have a vacant listing than have that guest that is going to cost and stress you! Host to a standard, not a price and you will appeal to better quality guests Anne!

 

Cheers.......Rob

@Robin4 "Cleaned out the medicine cabinet", just when you think you've heard it all! That's a few years of the flu covered then. I had guests clean out the entire (large) tin of loose T2 earl grey tea that I offer. That's $40 dollars worth of tea there and to boot cleaned out the tissue box too. Like, what are you even going to do with those tissues, seems like a bizarre thing to fill your luggage with? Still, that's a mighty amount of excellent reviews you've got there Rob!

 

@Rachel177 Yeah, 50% is what I figured should be the aim as well but also figured that I didn't want to price myself out of the market. However, to then be scored down on value is a bit of a kick in the nuts.

 

@Ann72 @Paul1255 I will give raising the prices a try. No idea what I should price it at. Maybe I'll try Rachel's suggestion of adding a fee for an extra person as so far I've only had two singles and all couples. The singles were by far the best guests who left all the toiletries etc and had a purpose other than sitting around in the living.

 

Does any of you charge a cleaning fee? As I clean myself because I work from home at the moment I thought I'd absorb that cost. Maybe I should add that?

 

 

Paul1255
Level 10
London, United Kingdom

@Anne1325  I charge a £10 cleaning fee for my private room listing- this covers my time to clean and prep, and adds a premium for single night stays.

 

For properties that I co-host the cleaning fees vary from £65 for a 1 bed to £110 for a 3 bed.

 

I would say it’s something you should consider, but lots of different hosts have different ideas about adding the fee or not.

@Paul1255 That's a good idea. I've been struggling to keep up with laundry on single night stays. I guess a minor fee won't bother those that stay longer but will help with the cost of my poor struggling washing machine.

@Anne1325 I've had a few 4 stars for value, generally from the worst guests or those who have recently travelled through Asia & expect 5 star accommodation at 1 star prices. It used to bug me, but as long as I'm being rated 5 stars overall then I'm happy.

 

I used to charge a $25 cleaning fee to cover my time cleaning. I'm doing a little experiment at the moment to see how it impacts my bookings. I've removed the cleaning fee and increased my room rates. I also offer a slight discount for stays over 1 day (an increasing % for each day stayed). I've been doing it for about a month and so far there has been no change to my bookings, or my ratings when reviewed.

@Rachel177 I didn't even know that that was a possibility with the discounts! Be interested to see how that works out!

 

I've taken the weekly discount off to discourage people from booking for a week or longer. Like said, I've had a few backpackers through and although the majority were lovely I've had two separate couples who had nothing better to do than to hang out on the sofa all day, and that for two weeks! One of those made me really uncomfortable as they acted like they owned the place instead of me. Figured taking the discount off would discourage that.

 

Maybe with prices up I can try that angle again.

@Robin4 Wow Rob, I just looked at your listing. Such a cute cottage and the price is beyond reasonable.

 

May I ask how you keep it cost effective with all the great extras you cover? I considered adding food items like chocolates/breakfast to the listing but figured it would just add even more cost and my time spent cleaning the kitchen. 

 

In fact I have started stripping things to keep cost down, like the robes that I offered to begin with - just more laundry. Access to our spices - one guest would set the table with 5 bottles of our spices. Make-up remover and pads - generously used by the guest who marked us down on value. Small costs but they add up. 

Robin4
Level 10
Mount Barker, Australia

@Anne1325 , I have been here before on the CC but there are new contributors coming here all the time so it possibly bares repeating! For the older contributors here please forgive me!

 

Finding value to put in my listing is almost a challenge for me, and I am all the time looking at ways to lever a good deal. 

1/......As well as the liquid shower gell, every guest gets a boxed cake of Dove soap! I came across on eBay three cartons of Dove soap. There are 144 packs in each carton and 6 cakes in each pack......That is 2,592 boxed cakes of soap which I bid on and secured for a total of $207. That equates to 8c AU per cake, cheaper than buying those wrapped tiny minibars the hotels provide! I have enough Dove soap here for the rest of my hosting life!

 

2/. I have an arrangement with Julie, the manageress of one of the large supermarkets here and when cheeses get within a week or so of the use by date she does not want to know about them, particularly when they have been picked over a few times in the display cabinet. I never pay more than 50c per cheese. I turn on a $30 cheese plate for every guest for a cost of less than $2.50.

 

IMG20190321083901.jpg

 

3/. I have a never ending supply of Coke courtesy of the Aldi or Foodland dumpsters. If a carton of drinks gets dropped on the way to the display area, it goes in the dumpster. They don't seem to realise that after a week the contents of those cans have settled back to their orginal state, I just throw the couple of damaged ones in the recycle bin and I have 30+ guests worth of free coke....and I actually get money on the deal because I get the 10c pr can beverage recycle allowance on the whole carton. I make a profit out of nothing.

Dan Murphy's provides me with beer at a heavily reduced rate so, every guest gets a beer in the fridge, on the house.

 

4/. We produce all our electricity and harvest most of our water supply so those costs are insignificant on a per guest night basis.

 

IMG20190321094653.jpg

 

5/...... Just yesterday I purchased from Spotlight another 3 x 1,000 thread count sheet sets, which I will just put aside for another six weeks or so. They were a store managers special at the time and cost me $30 pr set. At this cost I don't mind throwing out sheet sets after 30 guests because that means they have averaged around 70 guest nights  per set which means they cost me about 37c per guest night...and I think that is good value from a sheet set and guests like the feel of crisp new looking linens....not those that have got balled up through excesive useage!  

 

Anne, I don't cut corners, everything I offer is of good quality, I just make sure I secure it at a bargain basement price. That way everyone is happy, the guest thinks they are getting a great deal and I make money!

 

Cheers.......Rob

@Robin4 Now that's a bargain hunt! I love a bit of Ebay and Gumtree myself (I buy, restore and resell vintage furniture) but that's next level! I love it.

 

I might start keeping my eye out on Ebay for package deals as well. For the moment I have pump bottles of liquid shampoo/conditioner/body wash that I refill with Aldi products. Way cheaper than offering singles - I had already started instructing my husband, who travels for work, to steal them from hotels;)

 

And generating your own electricity, what a dream! Hopefully one day I'll get there but until then at the disposal of whatever the utility companies decide to charge.

 

Thanks for the tips!

Robin4
Level 10
Mount Barker, Australia

@Anne1325 

If I was to be totally honest the electricity does cost us Anne....just not in terms of bills!

We installed our solar array before the September 2011 deadline and I get 60c per Kw as a feed in tarrif', 44c of that guaranteed until 2026 and the rest topped up by the supplier.

 

I generate by solar and wind and battery store it I can store enough power so we don't have to draw anything from the mains 7 days, even if there is no sun and no wind.

This will give you an idea of the size of the wind turbine. This was as I was putting it together......

 

IMG20180421170328 b.jpg

Here is the wind turbine in operation

 

https://imgur.com/a/twXlcnb

 

I don't care how much electricity a guest uses although I used to get a bit annoyed when they would  come in at 2.00pm on a cold afternoon, remark how confortable the temp is and then go out for the afternoon and evening....but not before winding the thermostat up to 30c so they would have a comfy toasty cottage to come back to at 11.00pm.....just waste.

I have got around that now by just putting in an off/on control and a temp sensor...I do all the adjustments by bluetooth from my phone. Cuts down a lot of wasteage!

 

But where the possible cost comes in Anne, because guests are using whatever electricity we store, we are not getting the opportunity to feed that power back to the grid and get paid for it. So, although I say it doesn't cost us anything....it actually does!

I do have a very small carbon footprint on this planet though Anne, and that makes me feel good!

 

Cheers......Rob

@Robin4 Dear me, that's nearly as big as you!

 

I agree we can all do our bit for our carbon footprint, still, it doesn't stop some guests thinking that because it is included in the price it is free! Seems you've got a pretty good handle on it though with your phone app. You make me look like a Luddite with your remote controlled thermostat, door locks etc! 

 

 

@Anne1325 your place looks lovely. Definitely increase your prices, I have found that the lower my prices are the worse the guest seems to be. And you should charge for an extra guest, I have a flat rate and then charge for the second guest. I've found it weeds out the backpackers who want their own space but don't want to pay too much, I got sick of couples taking over my living areas. 

 

And 35% of your cost is too low! I aim for 50% but generally cover 45% of my costs each year. Your listing is quite high, it appeared as the second listing when I searched for a private room in your area. So I think you could experiment by putting the price up, and ignore the airbnb smart pricing suggestions.

Ann72
Level 10
New York, NY

@Anne1325, I agree with @Paul1255 @Robin4 and @Rachel177 and just wanted to add:  We should all have this embroidered on a pillow or tattooed on an arm:

 

"Host to a standard, not a price."

 

Love that, Rob!