Once the lower cost alternative to hotels, Airbnb prices have gone steadily up, even if it’s not apparent from the nightly rates that pop up in the search results. That’s because Airbnb hosts have adopted a strategy commonly used by airfare search engines to get you to pay more than you want to – by using the cleaning fee.
Clearing Up Cleaning Fees
You’re probably familiar with the service fee when booking on Airbnb – the cut the site takes to run their service but much, much more variable is the cleaning fee. Cleaning fees on the other hand are there to cover costs like labor, cleaning products, toilet paper, laundry – as the name suggests, to cover the costs of cleaning an Airbnb after your stay. The cleaning fee, unlike many hotels, is a one-time (non-refundable) upfront cost – in other words you pay a single cleaning fee rate whether you’re staying for a night or two months.
Cleaning fees, in theory, vary based on the size of the accommodation, location, and any special circumstances like being on a ski resort for example, where you might have a lot more mud tracked inside. But cleaning fees, at least for the host, are somewhat arbitrary.
Reservation Pricing
An Airbnb host can set the cleaning fee to whatever they want and I’ve seen places where the fee is the same as the rental rate, meaning it can double the cost of your stay if it’s only for a night. See, Airbnb calculates service fees based on the total amount of your payment, which includes the cleaning fee. A high cleaning fee can mean a larger service fee meaning the price you saw in the search could be a lot more each night than at first sight.
This all makes sense from a logical perspective for Airbnb but for you, the consumer, you still have that original price – the one you saw when you were searching in the first place – you still have that first price in mind. And because of that, you’re more likely to book the Airbnb, high cleaning fees and all. This is due to a psychological phenomenon called “reference price” and it works even better to get you to book an Airbnb if the search price – that first price you see is really low.
Airline Tactic
See, this is a tactic airlines have been using for a long time. You’ve seen it, you search for flights and pick a cheap one, only to watch the total price be way above what you were hoping to pay when airline fees are added. Fees for seating, fees for luggage, fees for food, fees for who knows what else. But you usually end up booking that flight anyway because our brains unconsciously evaluate prices based on the first base cost we’re presented with.
So it’s not a 949 dollar flight, it’s a $600 flight with fees and taxes tacked on. And just like that it’s not a $288 a night Airbnb but a $147 Airbnb with a $105 dollar cleaning fee. For Airbnb, holding off on how long they show you the total price – or rather by showing you the lowest base price for a booking, they increase their chances of you booking. And Airbnb hosts know this as well – so they can lower the nightly rate but make up for it a bit with a higher cleaning fee.
For longer bookings of a week or more, large cleaning fees probably won’t impact the total price too significantly. But for one or two night stays, they can significantly add to your totals. And that’s how hosts can really turn a profit since it probably doesn’t cost them close to the cleaning fee to spruce up after a one night guest.
Overall, hosts get to lower their nightly rate at first glance, profit off the cleaning fee, and all the while Airbnb makes more off increased service fees. To avoid falling for the reference price trap, check hotels, other rental sites, so for better or worse, you’re not just relying on Airbnb.
