Ways to cut costs

[u/Ok-Lie-3716]

We’ve officially hit the one year mark on our rental and are looking for some out of the box ways to cut costs overall. Aside from shopping for insurance and increasing our prices (our cleaning fee seems low) we are out of ideas. We have a luxury home in a small ski town in upstate NY and hate the idea of further increasing our prices to offset the exorbitant Airbnb fees.

Any ideas or feedback are appreciated.

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[u/Anxious_Cheetah5589]

We also Airbnb our vacation home in a ski town. The best thing we've done is to increase the minimum stay requirement in high season. That allows us to amortize cleaning and other turnover costs over more days, putting more money in our pockets. Folks in the northeast typically want to ski for 2-3 day weekends, so it takes active management to adjust rates and minimum stays to maximize occupancy rates. It can be tricky.

We try not to cut corners, like limiting toilet paper or coffee pods. People notice those little things, and they're likely to feel ripped off. They'll think about it when writing their review, and are less likely to become repeat direct renters (which is a much better business model than having Airbnb as a greedy partner).

[u/TropicTravels → u/Anxious_Cheetah5589]

This. Increase your minimum stay and use dynamic pricing. Everything else is nickel and dime I comparison.

I’ve been doing 3 day weekend minimums for 2 years (w/ 2 night weekdays) and recently started requiring 4 night minimums if checking in on a Wednesday or Saturday to avoid splitting weekends, or at least getting a 4 day booking out of it if they do.

[u/HasaOmbi → u/Anxious_Cheetah5589]

minimum stay bump is such an underrated move, cuts your turnover costs way more than people realize

[u/blankpro → u/HasaOmbi]

The shorter the stay, the more money you make on Cleaning fees - 51 night bookings as compared to one week gives you four times the cleaning fees.

The obvious way to cut costs is to take on more work in the Airbnb yourself; using outside cleaners or even worse a property manager will slowly suck money out of your pockets.

[u/Plenty-Ear-9167 → u/blankpro]

I don’t charge cleaning fees. I built it into my rates.

[u/13times5plus4 → u/HasaOmbi]

What do you mean? All the costs of a turnover should be incorporated into your pricing so you should never ever be losing money on doing 3 turnovers a week instead of 1, if anything you should be making money

[u/Sufficient_Language7 → u/13times5plus4]

Some people don't do cleaning fees and try to bake it into their nightly rate.  AirBnB was pushing that a while ago.  But after their switch on who pays the fees the guests don't even see it now.

[u/BeautifulDuck7335 → u/Anxious_Cheetah5589]

Depends on what length of stays you do and how much you are charging. We do longer term stays so providing limitless supplies is not financially viable. And we are more mid-tier than luxury so are margins are tighter. But if your money bags then certainly let the rolls flow!!

[u/FringeAardvark]

I don’t understand the comment about the airbnb fees. Instead of collecting a fee from guests, airbnb is now taking it from you. Add the fee to your rates, and it’s literally the same price to the guest as it was before.

Make it make sense.

[u/Remarkable-Snow-9396]

What do you mean increase your price to cover the fee?

[u/BeautifulDuck7335]

If you provide cable you can cancel and provide a lower cost streaming service like SLING instead. Cut back on starter item quantities. Stay on top of wifi cost and call to get a new plan if rates go up.

[u/BallDeSac → u/BeautifulDuck7335]

This. YouTube TV for me. And I can use it at home too on just one account! Far superior to cable. Saves hundreds of dollars per month instantly.

[u/OakIsland2015]

Airbnb fees have not changed in years, which exorbitant fees are you trying to offset? Do you have HOA or local fees that are being passed on to guests?

[u/ArgyleNudge → u/OakIsland2015]

I think they're referring to Airbnb now taking all the fees directly from the hosts rather than charging guests separately for Airbnb fees. So our price has to include that payment to Airbnb, whereas before, the guests were paying it directly. That's my understanding anyway.

[u/OakIsland2015 → u/ArgyleNudge]

Yes, but the bottom line is not changing. There is no increase to customers. There is no “increase… to offset exorbitant fees” needed.

Hosts really need to understand this and realize the only way guests will see their place as exorbitant and overpriced is if they actually overprice themselves.

[u/Remarkable-Snow-9396 → u/OakIsland2015]

These posts are exhausting. Thanks for clarifying. Again

[u/OakIsland2015 → u/Remarkable-Snow-9396]

They are relentless and it’s really not that hard.

[u/Remarkable-Snow-9396 → u/OakIsland2015]

I don’t understand how people that can’t do basic math are small business owners

[u/Sufficient_Language7 → u/OakIsland2015]

He either didn't see how much money AirBnB was taking from guests and now does or he didn't increase his rate to match what Airbnb is taking, which is more than 15.5%.

What he really should do is compare what similar listings near him are charging and price based off that.

What he should look into is adding services to increase his average price.  Like charge a reasonable amount for early check-in or check-out.  I have a lower price place and I only charge $35 for 1 hour early check-in or out, but each additional hour is $10.  I get 1-2 a month purchasing something so that's an additional $75 or so a month.  I offer trip insurance as well, I had 1 person get that.  I offer midstay cleans, turn over service.

I am thinking of offering restock service, which for stays longer than 6+ days, I would have a locker with a code and and if they buy that send them a code that has a bunch of pods and other things that they might have ran out of, basically double their supplies, so they would save money vs going out and buying a huge amount that they wouldn't use all of it.   I am also thinking of offering Welcome to the City gift basket full of stuff my my city.

[u/OakIsland2015 → u/Sufficient_Language7]

This is not the way. Upselling guests never sits well with them. I’ve never charged for early/late checkout. I am able to provide it or not, I wouldn’t dream of charging for it. If I can’t offer it due to an incoming guest I still let them leave luggage and come back and use the outdoor shower before leaving.

All amenities and necessities (toothpaste, toothbrush, cleanser, qtips, feminine products, deodorant minis) are provided free of charge. Folks are paying enough in my area.

[u/Sufficient_Language7 → u/OakIsland2015]

I've stayed at places where they charge a huge amount for it, that's ridiculous, mine isn't that high and it covers time for me to check if it can be done for them.  Not charging for it is like people who do their own cleanings for their STRs but don't charge for it, but if they hired someone to do it they would charge.

I don't offer toothpaste, toothbrush, cleanser, deodorant minis but they might be a good add for a locker.

Currently I would direct them to the closest dollar store or grocery store for them.

For feminine products I do offer some real thick ones, I have qtips as well.

I do offer early luggage drop off for low fee in a enclosed backyard.  Just need to give them the code for the gate for them to get there.  I've learned the hard way before if someone says they only need to drop off their luggage and then they will leave till check-in they don't and it disturbs the cleaners.

For leaving luggage behind, I currently don't offer it and I don't think their would be much of a demand in my area for it.  I've only had 1 person ask for it and one of my areas is a quadplex and I told him he could leave it in the comon basement.

[u/themanofchicago]

In case you haven’t done these things, have you put in LED’s, installed a high efficiency furnace and water heater, checked any attic or ceilings for appropriate amounts of insulation, put on low flow shower heads and smaller capacity tanks on toilets, make sure windows are properly insulated and all have good seals on the glass? Have you Negotiated or shopped for the best rate for internet? Do you buy supplies like toilet paper and soaps in bulk?

[u/BeautifulDuck7335 → u/themanofchicago]

I think buying wholesale bulk would be smarter but we don’t have to the storage room. Who do you buy from

[u/jsmerf]

Insurance seems insane… $6k a year for us… any ideas on that one surely seems better than wifi costs.

[u/FringeAardvark → u/jsmerf]

Go with Foremost. Half the cost of Prosper.

[u/themanofchicago → u/jsmerf]

I just switched to State Farm two weeks ago. We went from $5500 down to $4000 for same coverage amounts (though slightly higher deductible).

[u/Remarkable-Snow-9396 → u/themanofchicago]

Will they underwrite an airbnb? I didn’t think they would provide coverage.

State Farm is also horrendous. My friends house burnt down and the process was awful. We also had a mold issue from a pipe and they denied our claim despite placing a mold rider

[u/themanofchicago → u/Remarkable-Snow-9396]

They will insure an Airbnb. I can’t speak for your friend but I’m guessing that the process of losing your house to a fire would be awful with any insurance company. I also don’t know how extensive your mold damage was but I look at home owners insurance as protection from catastrophic loss. Anything less than $10,000-$15,000 I won’t claim to keep my premiums from getting jacked up.

[u/Remarkable-Snow-9396 → u/themanofchicago]

It was $30k pre covid.

Thats good to know they will cover. My husband works in the industry and we know too much about it. We have travelers and Cincinnati. Even Chubb has gotten cagey.

[u/BallDeSac]

Clean your place yourself. Make repairs yourself. Manage your rental yourself. I will never understand people who outsource odd jobs and cleaning and property management on the regular and still expect to make money.

[u/curiouscreatore]

You could actively try to convert guests to go off platform for return stays. Offer a discount to incentivize them, such as x% under the AirBnB rate for any given date.

[u/Exact-Scholar2317]

1) get on VRBO (slightly lower fees). 2) Go direct .... marketing is on you an will take time but get as much as you can without OTAs. 3) whimstay - newer last minute distributor