Low ball pricing and high expectations

[Arinna0]

Hi Folks,

I've been hosting since Airbnb first started. 

Recently the amount we are able to get from our rooms keeps getting lower and lower.  We charge $18-25 per night for various rooms, which is basically the price of renting a room in Edmonton $600/month, but we include all utilities, wifi, beds, bedding, cleaning...  I think it's pretty exceptional value, and we can't go any lower. 

We get many guests, most who are happy, but there's about 1/3 (that's keeping me from superhost) that give us 4 stars.  They seem to be expecting a luxury hotel or something.  In my opinion, a room anywhere in the world that is clean, has a bed, clean sheets, a kitchen to use and access to laundry and wifi is well worth $20! 

Why are people getting so picky?  It's really disheartening.  We do our best to keep the house clean, and always clean the rooms and bathrooms before guests arrival, but there's other guests and we can't spend all day cleaning.  Not for $20!

What's with this?  Almost not worth doing it anymore...

Anyone else getting poor reviews from people expecting hotel service?  This is our home, not a hotel, and the average price for a hotel here is $100/night, and no kitchen or laundry. 

Can we all band together and raise our prices?  I'm tired of getting bottom dollar and people not being grateful. 

Just wanted to rant. 

Anyone else feeling similar?

[Rebecca181]

@Arinna0 Very frustrating, I can only imagine! To help me better understand: Are there many new listings or 'competitors' popping up around you that are slashing prices to get established in the market? Or does this seem specific to Airbnb and your listing, i.e., you are observing a change in attitude in the guests you are hosting in that they are no longer appreciative and act increasingly entitled?

[Arinna0]

There's a lot of competition now, and many hosts offer extra amenities.   $20/night, barely covers the bills, let alone extras.  So we offer budget accommodation, but smart pricing suggests lowering the rates to $13, and I'm notified that other rooms are getting booked for $5 less per night.  How can people offer this price!  Hardly worth dealing with people in your space... 

We just got another 4 star review that says don't expect luxury...  Who expects luxury for $20???  Instant book and available the day she was looking.  

Just makes me feel unvalued as a host.  We provide a clean bed, sheets, duvets, towels 4 pillows, clean bathroom on arrival.  Shared basically equipped kitchen, laundry, wifi, common spaces, parking, a yard and deck. 

[Leslie0]

Don't stress about it. As long as you are getting bookings at $20 per night, don't lower your prices. Tune out the Air price suggestions. Many hosts do very well with 4 star ratings. I agree, there is a price point at which it isn't price effective to host. It simply isn't worth the disruption of your life and the risk to your property.

[Nelly195]

Hi, wasn't aware that, other hosts from other countries are experience this under valued services. Its so disheartening I must admit, what did you mean by Air pricing.

[Tatyana5]

I think this is crazy and very unfair. I came on here to complain about the same thing, but you have me beat. Maybe you can raise your prices. $20 sounds too low and doesn't protect you against freeloaders.

While I enjoy being a host on Airbnb, I feel the company is not protecting hosts against guests with completely unrealistic expectations. Rather Airbnb has allowed (helped?) the market to be pushed down too low, to where it is not sustainable. The more people who give you 4-star and damaging 3-star ratings, when they should have spent $100+ if they expected a hotel, the longer you have to keep your prices unsustainably low.

...Actually, when you add together the time you spend for admin and customer service, washing, the extra energy guests use and depreciation of furnishings, decor and soft furnishings my guess is you are out of pocket.

[Lilian20]

@Arinna0 @Rebecca181

Hello everyone, here is my question : 

How low can you go ? 

On some occasions (low season, bad weather) i have to go down progressively to my minimum price.

That minimum price is about 20% over my cleaning cost, just so that I can get the apartment ready again and still have petty cash to replace the batteries of the remote control...

[Arinna0]

$20

[Rebecca181]

@Arinna0 @Lilian For some reason I do not receive notifications anymore when I am tagged. Strange. I managed to stay booked through the entire off-season by adjusting my rates according to what my nearest 'competition' was doing - But never lowered them to a point where I felt I was 'giving away the store'. It is quite a feat to stay booked year round, but we have been nearly 100% booked since opening, even during severe weather here on the Oregon Coast. I needed to be flexible as my off-season bookings came from one-night stays / travelers passing through town, and often people on road trips are frugal. I saw a rental near me that went down to ridiculously low prices, but I know they can afford to do it as it is a duplex they own and they live in one of the units. Although at times tempted, I just couldn't bring myself to cut my prices that low. So I think that is my answer, Lilian - If I am feeling resentful or squeamish inside, or angry with Airbnb for their silly pricing suggestions on my 3 story beach cottage that has more amenities than most 'Plus' homes, then I know that I am about to cut my prices too low, and I don't do it. This year my bottom was $81.00. In the high season I can get 2 or 3 times more than that a night. 

[Terry297]

After 6 years, mostly on the other popular site, I had sophisticated and appreciative guests who have been private renting for years. After years of 5 stars from sophisticated travelers I am getting a lot of guests who expect a 2000 sq ft 3br 2.5 bath luxury furnished and supplied water front accomodation with a country club to be less than a 150 sq ft hotel room on the interstate.  I dont get it. They will give you 3 stars if your Calphalon sheet pan does not look like it was just unwrapped from Macy's, all shiny and perfect. My last guest wanted a complete refund of a 5 day stay because there was a regional rain that caused regional power outage for 5 hours at which time she could not use her hair dryer to get ready to be a guest at a wedding. I got text stormed for 5 hours about how much the condo cost her (2000 sq ft luxury waterfront with country club for less than 2 (150 sq t) hotel rooms) even though power was sporadically out from College Station to Beaumont.  I gave her all her damage deposit even though she left a mess and prorated her rent for the 5 hour outage. She never lost use of the condo, the magnificent patio on open water or the country club. She rated us 2 stars because she said if our condo was a newer property with underground power it would have been restored and the "little rain" should not have caused a power outage (across Texas, please note!!). 

When I first started doing this I could talk to EVERY guest to set expectations. I HATE instant book. That and the commodity pricing expectation that they can get a private full home for less than a highway hotel is about to cause me to sell out of this business. 

[Sarah977]

@Terry297  If you hate Instant Book, turn it off. I've never used it, I message with all my guests before accepting their booking.

[Sarah977]

@Arinna0  There are other threads on this. I tend not to believe that smart pricing stuff or what other rooms are going for and don't pay any attention to it. It's hard to believe that airbnb would be making it up to create price wars and get more guests booking, but it almost seems that way. I get that stuff as well, but I know for a fact that a shared hostel room in my town goes for only a few dollars less than my private room with private bath and that a private hostel room is the same price or more. And my friend's hostel is fully booked at those prices almost all the time.

You are experienced long term hosts- what if you ignored the pricing suggestions and charged even a bit more for your accommodations than you are charging now?  I read here from other hosts that low pricing seems to attract low quality of guests- they have a cheap mindset and don't appreciate what they are getting and complain alot.

[Arinna0]

I try to offer affordable accomodations with a pretty high quality.  It's not luxury, but there's good beds and lots of amenities.  For reference, the hostel in town is $50/night.  I charge $20. 

Most of my guests are really good, there's just a couple that complain and it sure takes the wind out of my sails!

[Dennis264]

If the hostel is $50, your rooms should be that much!  $20 is waaaay too low!

Try raising it and see what happens.  I'll bet that even though you might not be constantly full you may make more money.

And cheap rooms attract problematic guests.

[Geoffrey40]

I am on Airbnb not just for the money but meeting different people from all over the world.... When I first joined Airbnb I soon realised that it is not the best thing to do by over advertising what you have but being totally honest with what is good and not so good about your place.... We have roosters opposite us yes 50 of the noisy birds but this is stated clearly so it gives guests no suprises.... I am a superhost because I  give all the facts.... I get more pleasure out of seeing a smiling face than a few extra bucks.... Airbnb often say reduce your prices and have one day guests but of course they would say that as it means more revenue for them but by comparing other properties and reviews you can then establish what is right for your own place....  When you go the extra distance for your guests you get the reward in exchange...