It’s September in London and my airbnb has finally come back to life. Before the covid pandemic began in March 2020 my airbnb was full every day of the year (including Christmas day) for 5 years. Then nothing for months. The occasional guest came from time to time when covid restrictions were eased but I was mostly without my airbnb income. This loss of income was huge for me. Luckily I don’t rely on this airbnb income to pay my bills, as i have a full time job, but the cost to me was significant. Hopefully now I am back in business for good. I can’t pretend that I didn’t enjoy the peace and quiet in my home when my airbnb was empty. But the missing money in my pocket hurt me and did not quite make up for it.
Can you live without your Airbnb income?
The best part of 2 years I was living without my usual airbnb income. Although I earn a decent London salary I was also spending my airbnb income. My wife does not work so you could say this was the income she was earning (she mostly was the one doing the cleaning and welcoming the guests etc). The amount of money I got every month from airbnb varied a bit but was never less than £2000 a month; and sometimes as high as £3000. This sort of money was life changing for me at the time – I went from being only slightly ahead financially to being more than comfortable.
My airbnb income really changed my life. About 7 years ago I started being a airbnb host. The income more than covered the mortgage on my house and other bills too. I was still working full time while hosting so I had my normal monthly salary coming in also. Before becoming a host my salary would just about cover all my living expenses; but not much else. What little was left after deduction would get saved sometimes but more often than not eventually spent on something.
I did not expect to starting making so much money so easily on airbnb. I just did not believe the demand would be so high to keep me full every day of the year (including Christmas day), but it was and did. I must admit the disruption to my daily life was big. Having strangers living in the same house as you is not particularly desirable. But the worst part I found was the late nights waiting for guests to arrive. Some guests tended to arrive very late into the night well after a time I would expect to be asleep. I have a full time job and need my sleep so this was painful and occasionally very stressful.
But the money was worth it. It’s easy money really. Apart from the cleaning and refreshing the rooms after each guest there is not much to do. The guests in my airbnb get a bed and bathroom only. NO access to kitchen or other areas so there is nothing for me to do there. I sometimes get guests who want to chat with me and I listen politely but other than that it’s nothing at all. I am largely an absent host.
So the trade off was well worth it. The money I got for being a host was good enough to feel the benefits, and the work and hassle involved was bearable. I did manage to live without my airbnb income during the pandemic but saw a large drop in my standard of living. Now hopefully the easy money and good times are back!
Should you include the airbnb service fee in your prices?
I’ve recently noticed you have the choice on how your airbnb service fees are paid. This is the guest service fee (14.2%) and the host service fee (3%). So previously you set your price per night and then airbnb would add 14.2% to the advertised price on the website. The guest will only see the grossed up price (your price plus the 14.2%). So I usually set at £20 – BUT the price the guest sees on the website is £23 (its rounded up slightly for simplicity and for greed of course). So what options do we now have and how can this work in your favour?
So why have i switched to the new Simplified pricing? Partly because it’s easier for me to control what the guest actually pays (it’s the price I set, instead of the price I set plus 14.2% which is mentally challenging). This makes comparison with other listings easier. Also the rounding can possibly work in my favour. The maths makes it far too easy for airbnb to keep the rounding difference. Most importantly it’s a case of price sensitivity. I like to control my end price. There is some psychology around price points – For example £24 can seem a lot cheaper that £25 despite the tiny difference. So when i set my price at £24 or possibly £29 I might get a slight advantage over other listings.
We will see how effective the Simplified pricing is for me. So far it’s led to more bookings at a slightly higher price (but i have noticed they are shorter bookings – one or two days instead of a week this may be coincidence). I do prefer this way of showing my prices as it’s just a little bit easier to work out. Previously the split fee pricing was never that brilliant anyway as you always had to take into account the 3% airbnb host fee. So when I set my price at £20 i never quite got the full £20.