It's August in London and it finally turned hot after many weeks of rain. I was really bust in June and most of July but it has gotten quieter in August and I have decided to drop my prices slightly to reflect that. Although I did put the price up on one room on a Friday night by 50% (because I didn't want it filled that night as I had plans the next morning) but it sold suddenly at the last minute to a really nice man from Taiwan. In June the UK voted to leave the European Union. The immediate effect of Brexit was the £ Sterling dropped a significant amount against mainly the US dollar but also against many other currencies. This means visitors to the UK will find prices cheaper so I think this is good for Airbnb hosts. More people may choose to visit the UK (a place previously seen as expensive) when they realise it will be cheaper than other major destinations. Although I do get many guests from the European continent I get much fewer French and German guests than I do from Eastern Europe. Why this might be I'm not sure. I may start seeing more guests from Asia and North America because of the more favourable exchange rate and because their economies are better than Europe.
I recently changed my Airbnb cancellation policy from Flexible: Full refund 1 day prior to arrival, except fees to Moderate: Full refund 5 days prior to arrival, except fees. The reasons for doing this were that I did have a few cancellations over the summer and although I had managed to refill most of the empty spaces in my calendar I started to think there is a real risk of a last minute cancellation causing significant financial loss to me so I decided to change to Moderate. This at least would give me 5 days to refill the space. What I didn’t think of was the possibility of selling the room twice. [caption id="attachment_204" align="aligncenter" width="619"] Choose your Airbnb listing cancellation policy wisely[/caption]
Get paid twice for your Airbnb listingIf your cancellation policy is either Moderate or Strict: 50% refund up until 1 week prior to arrival, except fees then there exists the possibility of getting paid twice for the listing. For example if a guest books for a week but two days prior to check-in decides they can’t or don’t want to use their booking then they will not be entitled to a refund. You are then free to re-sell the listing to someone else and thereby get paid twice. This can only happen if the guest officially cancel’s the booking. To do this they need to officially cancel on the website. The host can’t cancel it for them so if they simply send you a message saying they are not coming but don’t officially cancel then the dates will still be blocked on your calendar.
Selling a room twice can really boost your income for the month so it’s worth considering changing your cancellation policy.
How to automate your Airbnb listingIf you’re a live-in Airbnb host then sooner or later the issue of what to do if you want to take a holiday yourself arises. Even when I’m not on holiday I don’t like to leave the house for too long a period of time, in case there are issues when I’m not there. I certainly don’t like the idea of leaving the house for a week with guests in situ. Security is one thing that worries me most. Only I know who is a paid guest and is not as no one else knows each other and a stranger could easily enter the house unchallenged. If I want to go on holiday the safest thing for me to do is to block off the calendar and have no guests over this period. Of course this means no income for a week which adds up to a lot of money. I could find a friend or family member who would be willing to look after the house but this is unfair on other people as they have their own lives and it’s actually more hassle for them than they realize (being a host is not as much fun as people think). There are agencies you can you who offer a professional greeting service such as Hostmaker . These agencies help you automate your Airbnb business so you can be lounging on the beach drinking cocktails and just let the money roll in. In reality the amount on money these services charge is likely to wipe out any profit you could potentially make from your business as the margins for this business are wafer thin.
August has possibly been my worst month for new bookings. My calendar for the month of August was actually quite full but September onwards was looking pretty empty. I find that guests tend to book about 4-6 weeks in advance so to have so many blank spaces at this stage is not good. Some guests do book much further in advance of course but the main bulk tend to come in only about a month ahead. I do get a lot of last minute bookings due to my location in central London but I would prefer to have bookings all my bookings in advance given the choice even if it meant losing a few quid.
Why have my bookings dropped off?Well A quick search of my local area in Newham, East London, has revealed that there are many new listings in my area. Most of which are priced lower than me. I recall only about a year ago there were less than 5 similar listings in my area which consisted mostly of old ladies and couples with a spare room. Now there are multiple listings of small rooms in former HMO’s all over the area. Clearly those former slumlord landlords who formerly let single rooms to asylum seekers and desperate immigrants have now switched to becoming Airbnb hosts.
Why is there more competition in my area?One of the reasons why I think these slumlords have switched from the desperate poor to Airbnb holidaymakers is the recent tightening up of Newham council’s HMO license and additional licensing scheme. HMO licenses’ are mandatory across the UK for properties which fit House of Multiple Occupation criteria. But the additional licensing is a newer scheme and has made it less desirable and more expensive for landlords in the area.
So what can I do about my empty calendar for September?Well this first thing I did was drop my prices. I now have the lowest prices since I started hosting. I was expecting that as my hosting experience grew and my good reviews piled up I could start charging more and more for each listing. Sadly not! I also removed my deposit requirements for each listing. A risky move to be sure but it seemed worth a try even if it just got the ball rolling. For a few more days it was deathly quiet but then the bookings started to flood back in. It’s hard to be sure if this was just a quiet patch that we just came out of or if my pricing strategy did the trick but I’m sure happy to be getting bookings again.
Should I change my cancellation policy?I’ve had a fair few cancellations recently. Almost always I have been able to get another booking at the last minute but I am starting to think it’s not a good idea to be so flexible with the cancellation policy. I currently have my cancellation policy set to Flexible which means a full refund if cancelled 24 hours prior to check-in. I am going to change this to Moderate – Full refund 5 days prior to arrival, except fees. I think this shouldn’t turn off too many people who are serious about their bookings. [caption id="attachment_191" align="aligncenter" width="611"] You can change your cancellation policy under your listing Terms[/caption]
Last week a guest cancelled while actually on the way to my listing. I was expecting him to arrive around 1pm and got a message at 12:30 to say "it is too much trouble to come to your listing so i'm going to stay in a hotel right here." A bad excuse for sure. My mind immediately turned wether or not he is going to get a full refund or will i still get paid by airbnb?
What is your cancellation policy?When a guest cancels a booking it depends on your cancellation policy if they are entitled to a refund or not (Airbnb's booking fee is never refundable). There are three settings :
- Flexible: Full refund one day prior to arrival
- Moderate: Full refund five days prior to arrival
- Strict: 50% refund until one week prior to arrival