Maximizing your property’s revenue while providing a seamless guest experience can feel like a balancing act, especially when it comes to handling fees like cleaning charges. As a dedicated buyer’s agent, I understand the challenges property investors face, including optimizing their Airbnb listings. My expertise in property investment and market strategies allows me to guide clients in making informed decisions to boost their rental income. Whether you’re just starting or looking to refine your approach, I’m here to help you achieve your property goals effortlessly.
The cleaning fee is one of the most frequent objections guests raise when booking on Airbnb. For hosts, it’s a necessary cost to ensure the property is spotless, but how it’s presented can be a significant barrier to bookings. Many guests perceive cleaning fees as an additional charge that drives up the cost of their stay. Addressing this issue can help improve your booking rate while maintaining your property’s profitability.
This email explores four strategies to eliminate the cleaning fee without compromising your revenue or competitiveness:
- Remove the cleaning fee and raise your base prices
- Use dynamic pricing with percentage increases
- Apply an aggressive discount structure
- Restructure the cleaning fee with a channel manager
We’ll discuss how each strategy works, the challenges it presents, and why it may or may not be suitable for your property.
1. Removing the Cleaning Fee and Raising Base Prices
How It Works
- Remove the cleaning fee from your Airbnb settings.
- Calculate the total cleaning cost per stay and divide it by your average stay length.
Example: If your cleaning fee is $100, and guests stay an average of two nights, increase your nightly rate by $50.
- Update these rates manually across all platforms or in your channel manager to ensure consistency.
Why it works:
- Guests appreciate straightforward pricing, which eliminates the mental friction of adding separate fees.
- Removing the term “fee” reduces a common sales objection, enhancing the guest experience.
- Works universally across all booking platforms.
The Challenge:
- Short stays may not fully cover cleaning costs, leading to potential losses.
- Longer stays could make your property less competitive, as guests see a higher overall price compared to similar listings.
- Requires ongoing manual adjustments to adapt to seasonal trends, fluctuating demand, and market conditions.
Why it doesn’t work:
- It’s labour-intensive and prone to inaccuracies without advanced forecasting tools.
- The strategy is based on assumptions and guesswork rather than dynamic market insights.
- It fails to adapt automatically to changes in demand, often leaving you overpriced or underpriced.
Why we don’t recommend this strategy:
While removing the cleaning fee and adjusting nightly rates seems simple, it requires constant manual monitoring to stay competitive. This approach is often guesswork and doesn’t adapt dynamically to market trends, leading to potential revenue loss and reduced booking appeal.
2. Using Dynamic Pricing with Percentage Increases
How It Works
Dynamic pricing tools like PriceLabs or BeyondPricing help automate rate adjustments based on market demand. To incorporate your cleaning fee:
- Calculate the fee as a percentage of your base rate (e.g., $30 cleaning fee on a $150 base rate = 20%).
- Add this percentage as a markup within the dynamic pricing tool.
- Enable dynamic pricing to fluctuate rates based on market trends, seasonal demand, and neighbourhood data.
Why it works:
- Automates pricing adjustments, saving time and effort.
- Keeps your rates competitive by responding to market demand in real time.
- Removes the word “fee,” reducing guest objections.
The challenge:
- The tool applies a uniform percentage increase without considering your specific property’s likelihood of being booked.
- Does not dynamically adjust for the cleaning fee based on booking length or guest type.
- While rates increase with demand, they don’t decrease proportionally during slow periods, which could result in lost bookings.
Why it doesn’t work:
- The pricing is still guesswork to some extent, as it doesn’t consider your property’s unique appeal.
- Cleaning costs are not accounted for dynamically, leaving short stays underpriced and long stays overpriced.
- The percentage increase is static, lacking flexibility for different booking lengths.
Why we don’t recommend this strategy:
Although this method introduces some automation, it still relies heavily on guesswork. Dynamic pricing tools are not tailored to your specific property, and their algorithms don’t fully account for the cleaning cost. This could lead to missed opportunities for bookings or reduced profitability.
3. Applying Aggressive Discount Structures
How It Works
This strategy involves calculating and applying structured discounts to your nightly rate:
- Use a spreadsheet to determine discounts based on stay length.
- Example: For a $750 cleaning fee and $650 nightly rate:
- 1-night stay = 0% discount.
- 2-night stay = 26.79% discount.
- 7-night stay = 45.92% discount.
- Input these discounts manually into Airbnb’s discount settings.
Why it works:
- Discounts attract budget-conscious guests, especially for extended stays.
- Creates an incentive for longer bookings while removing the cleaning fee objection.
- Eliminates the word “fee,” reducing sales objections and improving the guest experience.
The challenge:
- Limited to Airbnb, as other platforms don’t offer comparable discounting tools.
- Requires constant recalibration to align with seasonal demand and nightly rate changes.
- Guests on non-Airbnb platforms may see inconsistent pricing, potentially lowering your search ranking.
Why it doesn’t work:
- Static discount structures don’t adapt to market conditions, leaving you uncompetitive.
- Revenue risks arise from overly aggressive discounts, especially during peak demand.
- Cross-platform inconsistencies create confusion and reduce your booking potential. Most hosts remove other platforms due to not being able to implement similar pricing structures or strategies.
- The discount settings are 1-7, 2- weeks, 3- weeks etc. Between certain events, you will be overpriced potentially deterring bookings.
Why we don’t recommend this strategy:
While discounts may seem appealing, they often lead to revenue loss. Additionally, the lack of dynamic discount percentage adjustments based on nightly rates or market conditions makes this method less effective for maximising profitability.
4. Restructuring the Cleaning Fee with other Fees
How It Works
Using a channel manager like Hostaway or Guesty allows you to blend the cleaning fee into your base rate seamlessly:
- Move the cleaning fee to the Management Fee tab in Airbnb.
- For other platforms, use the “Other Fees” section to adjust the base rate. Then click the add to Base Rate.
- Set this up within your channel manager to sync pricing across all platforms.
Why it works:
- Consistent pricing across all platforms enhances guest trust and simplifies decision-making.
- Eliminates the word “fee,” reducing sales objections and improving the guest experience.
- Works automatically, avoiding manual adjustments or complicated discount structures.
- Works on nearly all OTA booking platforms.
The challenge:
- Requires initial setup and familiarity with channel management software.
- Some hosts may find the process counterintuitive at first.
Why it doesn’t work:
This strategy works exceptionally well, leaving no major drawbacks.
Why we recommend this strategy:
Restructuring fees through a channel manager provides the most balanced solution. It simplifies pricing, ensures consistency, and removes sales objections, all while maintaining profitability. This approach adapts to multiple platforms, making it an ideal choice for hosts managing properties across various booking channels.
Why Is the Word “Fee” a Sales Objection?
The term “fee” often triggers a psychological response in guests, making them feel they’re being charged for something they shouldn’t have to pay. Unlike a base rate, which feels inclusive, fees are seen as add-ons that inflate the total cost. Removing or blending fees into the base rate creates a more seamless booking experience and reduces friction during the decision-making process.
Final Thoughts
Eliminating the cleaning fee can significantly improve your booking potential by removing a common objection. While options like raising base prices, dynamic pricing, and discounts each have their merits, restructuring the fee through a channel manager is the most efficient and guest-friendly solution.
Removing the Airbnb cleaning fee is just one of many strategies to make your property more appealing to guests while protecting your bottom line. As an experienced buyer’s agent, I’m committed to helping property investors navigate every aspect of their journey, from selecting the right investment to maximizing its profitability. If you’re ready to elevate your property investment game, reach out to learn how my tailored services can transform your Airbnb strategy and beyond. Together, we’ll create a roadmap to long-term success!
Frequently Asked Questions
Q: Why do guests dislike cleaning fees?
Cleaning fees are often seen as unexpected or additional charges, which can make the booking process feel less transparent.
Q: Will removing the cleaning fee reduce my revenue?
Not necessarily. By blending the fee into your base rate or restructuring it, you can maintain your revenue while improving guest satisfaction.
Q: Are dynamic pricing tools worth it for small properties?
Yes, they save time and help keep your rates competitive, though their effectiveness increases with proper calibration.
Q: How do channel managers improve pricing strategies?
Channel managers automate pricing adjustments and ensure consistency across multiple booking platforms, simplifying operations and reducing guest objections.
Q: Can I test multiple strategies to see what works best?
Absolutely! Start with one strategy and monitor your bookings and revenue, then adjust as needed to find the best fit for your property.
