This article is an excerpt taken from our comprehensive guide to hosting on Airbnb.
There are four options for you to consider in Airbnb’s Extra Charges section. All of these options factor into your overall pricing strategy. The best policy is to look at your competition. Charging additional fees far above those charged by fellow hosts (with similar sized properties) in your area will result in you pricing your property out of the market.
Most hosts charge a cleaning fee. Hosts renting out private rooms in their house are less likely to charge a cleaning fee than hosts renting entire places. If you choose to include a cleaning fee, it will be applied to every reservation no matter the length of stay. So a one-night stay will be charged the same cleaning fee as a one-week stay.
From my experience, the typical cleaning fee for private rooms is around $20. For studio and one-bedroom apartments, it ranges from $25 to $50. And for single-family homes, it ranges between $100 and $150.
Hosts with private rooms are not likely to include a security deposit while hosts renting entire places are likely to charge one. The typical security deposit for a mid-sized family home ranges between $200 and $300.
If you’re offering a private room, suite, studio or small apartment that is ideally suited for two people but could sleep four (you may have a sleeper sofa for example), then the extra guest charge could be useful for you. You can price your place for a maximum of two people then charge an extra guest fee for each additional up to the maximum you feel comfortable allowing.
Anyone can use this feature. It’s not just for hosts with smaller places. You might have a home that sleeps six comfortably but could sleep two or four more at a squeeze. If you want to try maximizing your revenue by creating more “flexible” accommodation to earn extra guest fees then, by all means, give it a try. But keep track of your booking trends as you might see that your guest demographic changes.
One important thing to note is that if you do nothing with the extra guest section, your listing will say Extra Guests: No Charge. A guest might interpret that to mean they can bring as many people as they want for no additional charge.If you’re happy with your maximum occupancy limit and don’t want to allow extra guests, set the extra guest fee to 0 and in the box titled “For each guest after”, enter the same number as your maximum occupancy limit. Doing this should remove the Extra Guest part from the Prices section of your listing.
To check this, click on the Listing details option of the listing menu and then click Preview listing to the right of the green bar. Scroll down the page to view the Prices section and, hopefully, the Extra guest fee has disappeared.
Many hosts set a higher price for weekend days than they do for weekdays. It makes sense to do this if your property is located in a place that is likely to see greater weekend demand than during the week.
Charging more for two-day weekend reservations also helps offset lost income if you can’t fill the other five days in the week. This is a tough balancing act and one that you’ll have to play with over time. Conversely, if you find that most of your guests are booking one or two nights stays, and you get as many weekdays bookings as weekend bookings, then there might not be a need to charge a higher rate for weekends.
You’ll need to take a test-and-learn approach to weekend pricing because it is dependent on location. Start by checking your competitors’ pricing strategy. Find a few listings in your area of similar size to your property. Click on date box below “check-in” and hover your cursor over various dates. See if there is a price differential between weekends and weekdays. If most of the hosts nearby have an increased weekend price, then you should feel confident doing the same.
When you’ve finished setting your extra prices, think about your overall price for a guest including the additional charges. Does your price still seem reasonable for 1-night, weekend, and week-long stays? Are you still competitive with other listings in your area? If so, save your settings and keep track of your conversion rates (bookings/profile views)
One way to measure the effectiveness of any pricing changes you make is to track your booking rate. This metric is calculated by dividing your bookings by the number of listing views and can be found in the Stats section of your Airbnb Hosting Dashboard under the Views tab. If you see a sudden drop in your booking rate after making pricing changes, then it’s a strong signal that you’ve set them at a level that is turning off potential guests.
If you want more great tips, buy our Ultimate Guide to Airbnb Hosting. The strategies and tips it contains are the direct results of my experiences optimizing my Airbnb property listing which netted me over $100,000 in 2 years. The guide is available for $9.95 with a full money back guarantee.