Airbnb CEO to fix cleaning fee and airbnb fees after launching review.
(00:04):
Hi everyone. John here and thanks for tuning in to another episode of Vacation Rental and Airbnb Mastery. Today we’re gonna talk about that tweet from Airbnb CEO Brian talking about how he’s going to fix the fees that people have been complaining about. So, what’s been going on is a lot of people have been complaining about the cleaning fee and a lot of other itemized fees that hosts are setting, and he’s saying he’s going to clamp down on this saying they were never intentionally set out to be that way. So what does this mean? Well, it’s all speculation at this point, but we’ll get into it and, and I’ll discuss what I think it means and what we need to start thinking about after this tweet. First, I want to say thank you to our listeners. Thanks for supporting us by listening. All of you that are listening, you support us just by doing that and all of you who have given us a rating and review.
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(00:58):
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Guests are concerned that price upon checkout page almost double the nightly rate…
(01:52):
Okay? so let’s get into it. What’s going on is a CEO tweeted that he’s taking a stance on fees, okay? Because he tweeted on October 9th, a breakdown of the fees, and he, it showed that the total booking amount was more than double the actual daily rate. And he said, If you were starting with the customer experience, would you show a price that almost doubles at the checkout page To that, Brian, the CEO of Airbnb, responded, You are correct that cleaning fees were never intentionally designed, which is why we’re now playing ketchup. Ooh, this is one of my top priorities. We are redesigning how pricing on Airbnb works. So I think this is piggybacking on that Wall Street Journal article. Welcome to your Airbnb. The cleaning fees are $143 and you still have to wash the linens. So what do we need to think about as vacation rental entrepreneurs?
Fees, including cleaning fees, having trended upwards on Airbnb in 2022
(03:01):
Well, there’s a lot of truth to the fees thing. We’ve talked about it several times, so I don’t want to beat a dead horse, but it’s important to know that we need to listen to our audience. We know why we charge clean fees. We know why we have fees, because we have costs of doing business to deliver a great guest experience. Come on, be real. It’s not cheap. However, we need to listen to our audience because they’re the ones placing the bookings and we’re trying to make them happy. So there is truth to it. And if your clean fee is actually more than your nightly rate, yeah, let’s be real, it could actually deter people from booking with you. So what’s the solution for this? Well, I have always been a big fan of just lumping everything into the nightly rate and not having itemized fees.
Clean fees may be eliminated on airbnb, added to the total price or Airbnb may create a new filter.
(03:47):
But let’s be real, when you look at different listings, the competition is going to beat you on price because they’re showing a low nightly rate and then giving you sticker shock at the checkout page. But if you do, what I’m saying, you’re gonna look more expensive than your competition. And, and you don’t want that because, hey, you might not get booked if everyone’s much, much cheaper than you in providing similar value. So what I think is going to happen is, and this is just speculation, I think he’s going to ask people to put their clean fee and they’re gonna do some math, and it’s going to just show guests the actual total rate. But that’s just my speculation. Doesn’t mean it’s going to happen. And then I looked on Facebook to see what people are saying, what other hosts are saying, what cleaners are saying, what guests are saying.
Host and cleaners wonder who will pay the clean fee on Airbnb bookings
(04:37):
So on the host side of things, they’re saying that, Oh no, the clean fee is how I pay the cleaner. You know, I, I can’t have that go away because how am I gonna pay the cleaner? Well, it’s gonna get paid, whether it’s out the nightly rate or the clean fee, it needs to be paid. So whatever your cleaner’s charging you, you’re gonna have to pay them the clean it. So whether it’s in the clean fee or it’s in the nightly rate, it’s going to have to be charged to the guests somehow. Doing the math may be a little bit tricky. For example, if you have a five night stay at a hundred dollars a night, that’s $500. If you have a hundred dollars clean fee, what if they only say two nights? How are you gonna divide up that clean fee? Right? So that’s where the confusion comes in because you are saying, Hey, it’s a hundred dollars regardless whether you stay one night or three nights, but if you have a two night stay at a hundred dollars a night, that’s $200 with a hundred dollars clean fee, the clean fee seems way more significant than if they’re staying for 10 nights, right?
Concern and change of airbnb cleaning fees.
(05:31):
So that’s where this is going to be a little bit of a game. What are cleaners saying? Well, they’re, they’re a little scared because they don’t know how they’re gonna pay. Guests are saying the same thing, that the clean fee’s too high and that they’re going back to staying with hotels. They’re getting more value from hotels. They like the hotel experience and they’re just going to go back to staying in hotels. Well, you know, if you’re a couple or if you’re a single business traveler, I could see how a hotel makes more sense for you. But us family, people that have six plus people that we’re traveling with and Airbnb is still going to be the best deal, or a vacation rental is still going to be the best deal we want to gather with our families. We want to eat dinner together, play board games, hang out by the pool, do a barbecue, that kind of thing, the fun stuff.
At the core, this is an issue with Airbnb’s business model.
(06:17):
So, no, it’s not going to, nothing’s gonna happen to short term rentals. It’s just we need to be more aware of what our guests are actually saying. So he’s trying to say it’s like it’s a tech obstacle. He’s going to change like how it’s showing Brian’s going to, you know, fix this, but it’s at the core of business issue. Think of their incentive for this. Their incentive is to get more bookings at all costs. The more bookings, the more service fees the platform can charge, the more profits can go to their shareholders, right? So it’s a business issue. They want to show low nightly rates to entice more travelers, get more bookings when more service fees. So this is definitely gonna ask a lot of like, of them to change things in such a dramatic way. But let’s be honest, there are competitors in the hotel industry some of them and a lot of competitors like vrbo, booking.com, they still have cleaning fees.
Other OTAs and booking platforms are not very transparent about their fees, either.
(07:14):
They’re not as transparent either. So Airbnb’s not the big bad guy here. Like the other platforms are doing it too. Airbnb’s just the big elephant in the room, the big gorilla. So there’s a, a lot of different solutions that chess has, has tweeted about, including a filter that would show all the taxes in the fees, but they’re looking on doing a bigger solution. So I’m excited to see what that actually entails. But let’s talk about the actionable steps. So this is not so much of a gossip podcast. Review your fees. If you have itemized fees, ask yourself if they’re so important that you may scare away guests. If you leave them, are they that important that you want to lose a booking because your fees are too high? If they’re not, scrap ’em. Take ’em out. Is your cleaning fee higher than your nightly rate?
The math without a cleaning fee will be difficult to understand.
(08:06):
If so, that is a problem. If your cleaning fee is $495 and your nightly rate is $280, that’s a problem because if someone’s booking for three nights, the clean fee looks like it’s just as much as a stay. So maybe you understand, you understand why the clean fee is that high, but your guests don’t, your guests don’t understand, and it doesn’t matter who’s right and who’s wrong, because who’s right and who’s wrong is not gonna pay the bills. But you don’t gain anything by arguing or proving our point to our guests. We gain when guests book our property and we give them a great experience and have them coming back for more, right? So to do that, we need to be guest friendly. So if your clean fee is that high, because you do pay your cleaner that I suggest lowering the clean fee and increasing your nightly rate.
An example of cleaning fee math under the platform change (a prediction).
(08:58):
So for example, lowering that clean fee, so it’s 200, $250, right? And then putting what’s left that you need to pay your cleaner, adding maybe 10 or $20 to your nightly rate. That way it’s not so scary and you’re not sticker shocking your guest. So I hope this was helpful. Please leave us a review if you think that this podcast is helpful. And if you haven’t subscribed to the newsletter, the five visit vacation home help.com/podcast. If you subscribe to my newsletter, I promise to send you super valuable stuff. The top five things that I found important in the vacation rental industry in that I know will help you revolutionize your vacation rental game. I’m also going to send you time to time these freebies. So things like rental agreement templates sample welcome books, communications templates, pricing tools. I’m gonna send you all of that stuff to my subscribers.
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(09:50):
I’m going to work my best to send you all the tools that I know will help you in this journey. And thanks for supporting us. I hope you’re liking the daily podcast. Every bit of support helps. I’m a huge believer that the industry is going to move towards more host doing it themself. The economics just point to that the service fees are expensive. Inflation is here, the economy’s not what it was. And if you take into the factor in the commission that Vacation Rental Managers charge, it doesn’t leave you making much money. So people who actually want to build a sustainable short term rental business or host one Airbnb, they’re best off doing it on their own. And what I want to do is coach you through it with this daily podcast. So this is intended for you, someone who’s trying to DIY this thing, do it yourself and just needs a little bit of help to get through the initial steps until you’re on your feet.
(10:48):
And then it’s also for those who are already experienced who want to refresh your skills or learn something new. I wish I had this resource when I was starting out. So hey, I thought if I could just buy a microphone and, and just share my experiences, maybe people can find some value in it and it will help, help lift the industry as a whole and lift more people up to grow as business people and to grow personally as well. So I, I hope that what I’m doing is helping. Please, if you can support me by leaving me a review on Apple Podcast, that would get more people learning about this daily podcast, learning about the show, learning about what I’m trying to do, and I would appreciate it so much. So thanks for your support, just by listening, you’re being a huge support. If you want to talk about something specific on the show, I’d love to have you on. If you want me to answer a question about something that you’ve been dying to hear to answer to, you can either leave it in the review or you can send me a WhatsApp message at 4 0 7 7 5 0 2 4 3 4. Leave me a voice note, I’ll answer it live on the show. With that being said, take care. You’re going to grow this thing. I’m with you all the way.
