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Pricing your Airbnb rental at a fair and competitive price can be difficult. You want your property to be frequently rented, but you also want to ensure that you are receiving fair compensation for the value of your property. What do you do when a guest asks you for a discount on their reservation?
Should You Accept a Lower Price on your Airbnb Rental?
No. Airbnb Hosts have mixed answers for a variety of different circumstances; however, the most popular response is to politely decline and stick with your original price.
Know Your Property’s Worth
When you decide to become a host and list your property on Airbnb, you must ensure that you do the correct research for pricing. What are other Airbnb locations in your area going for? Have you accounted for peak season verse off season pricing? Does your property offer something unique like a jacuzzi or magnificent mountain views? All of these aspects impact the fair nightly rate for your property. If you feel that you have done your research and your property is competitive with the local market, you should never accept less than what it is worth.
Many renters fail to consider that a host does not actually get to keep the entire rental fee. If a guest is paying $100 a night for two nights, the host does not pocket $200. Airbnb collects a fee and hosts must pay taxes on their rental income. Not to mention the host usually supplies all the necessities in their rental like toiletries and linens.
As a host you must also consider the costs and upkeep of your property- mortgage, insurance, utilities, cleaning fees and hosting expenses all need to be accounted for. You cannot run a successful Airbnb if you are not at least covering these expenses.
Are you looking to add more value to your Airbnb rental property? Click HERE for tips to increase your rental’s value.
Risks of Accepting a Lower Price
When a guest reaches out and asks for a discount it could indicate a couple different things about that person. They could merely be a frugal traveler or a haggler by nature looking for a great deal. According to many experienced Airbnb hosts however, asking for a discount often indicates a high maintenance guest and a bad rental experience.
Hosts who have caved and allowed a discount on their property have noticed a correlation between giving discounts and receiving bad reviews. You would think that a discount would result in a great review however these guests tend to nitpick every last detail of their stay and display a generally ungrateful attitude.
When a person asks for a discount, it may be a hint that they like special treatment or do not think rules apply to them. This could mean issues sticking to your house rules. Some Hosts who gave discounts experienced guests who did not abide by check-in and check-out time, ignored neighborhood quiet hours, or disrespected neighbors.
Politely Declining a Lower Offer
Even if you do not plan on accepting a lower offer for your rental, providing a polite, concise response to your potential guest is key. Keep your response short and to the point. Here are some things you could include:
- Thank them for their interest in your property.
- Inform them that you do not provide discounts.
- Highlight some of the features of your property.
- Recommend other properties in their price range.
- Recommend a local hotel in their price range.
- Ask if they have any other questions.
Although it can sometimes be difficult to turn down an offer if you stick to these points you can effectively and politely decline a guest’s request for a discount.
Discounts on Long Term Stays
Hosts generally have mixed feelings on long term stays at their Airbnb rental. Some hosts like knowing that their property is rented and will offer a discount if a guest stays for longer than five to seven days. This can be a great way to entice guests into a longer stay and make your property stand out from the competition.
Other hosts however stay away from long term rentals and do not only not offer discounts, but flat out deny requests for a long stay. Experienced hosts have discovered that long term renters lead to more cleanup and more wear and tear on the property. Hosts also find themselves dealing with more management issues like extra supplies and toiletries when hosting long term rentals.
What If You Need the Money and Just Want Your Rental Booked?
If you are looking at an un-booked weekend on your calendar, even a renter asking for a discount can be enticing. Sometimes, you would rather get something for your rental rather than having it sit empty—especially if there are bills due soon. At what point should you accept a lower offer to rent your property?
Hosts recommend doing some research, crunching numbers, and determining your minimum threshold price. This price should factor in your costs (cleaning, taxes, supplies) and also consider other listings in your area. The minimum threshold price should be low enough to catch a guest’s attention, but still make the rental worth your time.
Airbnb actually has a handy feature to allow you to make sure you are paid your minimum threshold price after cleaning fees and Airbnb service fees are deducted. Simply go to your calendar and select the date for which you are adjusting the price. You will then have an option to click “open price calculator”. From here, click the “payout” tab to see your final price. You can now adjust your nightly price to ensure that your payout meets your minimum threshold price.
Be sure not to lower your price too soon. If your property still is not booked the day before the night you want the booking, at midday, update the price to your minimum threshold price. This tactic has worked for many hosts to ensure their rental is booked.
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How to Avoid Being Asked for Discounts
If you find yourself receiving frequent requests for discounted nightly rates, it may be time to update your property listing and photos. If your description and photos are not portraying your property in the best light, guests may be misled into thinking your place isn’t worth what you’re asking.
Consider hiring a photographer to take pictures of your property. Photos are one of the biggest factors in a renter’s decision to book a property. If you would rather take your own photos, consider these tips:
- Be sure your space is clean and neat.
- Good lighting is essential.
- Capture the space from a variety of angles.
- Consider adding flowers or a bottle of wine and glasses for a personal touch.
For more information and tips on photographing your Airbnb, click HERE.
The description of your property to accompany your photos is important as well. Make sure to highlight what makes your property unique and worth the price you are asking. Include tourist attractions in the area and the proximately of those attractions to your property. Don’t be afraid to get creative and really sell your listing! You can find more great tips for listing your property HERE.
If you have done your research and priced your Airbnb at a fair value, there is no reason to feel pressured into accepting a guest’s request for a discount. Do not be afraid to stay firm on your price and refer a potential guest elsewhere. Many hosts find that allowing discounts leads to a bad guest experience and in the end, you are being cheated out of your property’s value.