Lower rent higher cleaning fee or higher rent lower cleaning fee?

Question

Question.  I'm thinking higher daily rent with a lower cleaning fee is best?  Say $400/night as an example with $150 cleaning fee which would be the going rate in my area so cleaning fee would essentially be a pass through expense.

I am seeing a fair amount of my competition though that charges upwards of $395 for a cleaning fee which would be WAY over what a cleaning service would actually charge.

Is this a viable strategy to attract more people to your listing?  Perhaps from a platform optimitization perspective? my personal feeling is seeing that large of  cleaning fee is a real turnoff and feels a bit like gauging the guest.  But I may be missing a viable strategy here.

Thoughts?

John Underwood · Answer

When I saw a good price on ebay and then a high shipping charge I refused to buy from that seller.

Now I typically compare the out the door price when buying a car or finding a place to stay.

I think most people would do the same.

Michael Greenberg · Answer

@Sean Wilt, like @Julie McCoy, I have a slight up-charge to cover expendables and I agree with @Eric A. - to a point.  Remember the cleaning fee is a static number, e.g., if you charge $100 per night and $100 for cleaning a 4 night stay, you're getting $25 per day for cleaning, grossing $500.  However, if you can charge $110 per night for the same 4 night stay and lower your cleaning fee to $90, you're grossing $530.  There is a balance to this pricing madness, it's just a matter of finding it.  Identify your competition, build a horrendously detailed spreadsheet, and start your pricing experiment.  You'll find a sweet spot.

Benjamin Vail · Answer

We charge a cleaning fee that is a pass through to our cleaning company. $50 - $70 (in our market).

As a side note, some management companies (like Evolve) lower their management fee, and then charge 2 -3x on the cleaning fees. That way they sound great to property owners “we manage your property for only 10%!” But then they make the real money on overage in cleaning fees. That is likely why you are seeing $395 cleaning fee. Just like a higher cleaning fee, and lower rent plays games with a guests mind when they book, it also plays games with an owners mind when they work with a management company.

I believe that guests will care about the bottom line, and to high of a cleaning fee will either cause them to book something else, or leave a bad taste in their mouth before they even show up. Also, their expectations of how clean the house should be will increase with the amount they pay in a cleaning fee.

Julie McCoy · Answer

I have a small padding on my cleaning fees that I view as going toward the cost of expendables (paper goods, kitchen supplies, the occasional ruined towel, etc.).  I think @Eric A. has the right of it re: human nature - we gravitate towards the lowest advertised price, so by having a higher price up-front a lot of people won't even get far enough to see that that might save them money in the end.  If they never click on your listing, it defeats the purpose.

Paul Sandhu · Answer

We don't charge a cleaning fee, and most people leave the places fairly clean (because they want to be able to stay there again).  If we did charge a fee, I'm pretty sure that people will make sure that we earn it.  That means they will leave it messy.

Sean Wilt · Answer

@Julie McCoy @Michael Greenberg  @Eric A. @Benjamin Vail

Good discussion all... I will likely get around to the spreadsheet ha ha, but in the meantime, I think I will go with the small pad above the pass through fee for supplies, etc.  For me that would be around $175 for a 4 bedroom 2100 square foot home.  I felt the property management companies using the cleaning fee to pad their revenue was particularly good Benjamin talked about as I bet that is totally true.  The Mom and Pop local property managers in my market seem to have that $395 cleaning fee on many of their listings which is ridiculous.

Julie McCoy · Answer

@Michael Greenberg found a way to articulate what I wasn't patient enough to figure out last night.  LOL  There IS a sweet spot to be found if you're willing to put in the effort, but it's a lot of variables to balance.  I haven't bothered yet.  I want my cleaning fees to be reasonable because as a guest a high cleaning fee turns me off and feels like I'm being gouged.  So for now I've settled for a small pad (seriously, mine is $10) and maybe one day I'll get around to that spreadsheet.  LOL

Mary M. · Answer

i wont rent from anyone that has high cleaning fees. Period. Why? because cleaning is a cost of business and should be part of the nightly cost (do you see hotels charging cleaning fees?) It is getting ridiculous at this point....  :(     (plus most places are not clean so what the heck am i paying for?)

Andy Zapata · Answer

I would treat them both as separate items and make sure you're competitive on both.

We use TurnoverBNB to get a cleaning quote and to automate our cleaning. From there, we pass on the fee along with the payment processing fee as our cleaning fee on AirBNB.

We use Wheelhouse to automate our pricing and have seen a marked increase in revenue since we implemented it.

Lower rent higher cleaning fee or higher rent lower cleaning fee?

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