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Sarah Karakaian: [00:00:05] You are listening to the Thanks for Visiting Podcast. We believe hosting with heart is at the core of every short-term rental. With Annette’s background in business operation–
Annette Grant: [00:00:14] And Sarah’s extensive hospitality management and interior design experience, we have welcomed thousands of guests from over 30 countries, earning us over $1,000,000 and garnering us thousands of five-star reviews. We love sharing creative ways for your listening to stand out, serve your guests and be profitable. Each episode, we will have knowledgeable guests who bring value to the short-term rental industry–
Sarah Karakaian: [00:00:39] Or we will share our stories of our own experiences so you can implement actual improvements to your rentals. Whether you’re experienced new or nervous to start your own short-term rental, we promise you’ll feel right at home. Before we dive into the content, let’s hear a word from our sponsor. Hello. Welcome back for another great episode. My name is Sarah Karakaian.
Annette Grant: [00:01:05] I am Annette Grant. And together we are–
Both Sarah & Annette: [00:01:07] Thanks for Visiting.
Sarah Karakaian: [00:01:09] All right. We’re going to kick off this episode like we do every week, sharing one of you our amazing listeners who’s using our hashtag #STRShareSunday. If you use our hashtag on Instagram, we’re going to share you here on the podcast, to our email list, on Instagram, give you all the love. Annette, who are we sharing this week?
Annette Grant: [00:01:26] This week we are sharing @Northwoods A-frame. Again, that’s @Northwoods A-frame. And two specific things I want to talk about this property. Number one is this lovely couple, they bought 40 acres and they built an A-frame, and now they’re building tiny cabins.
But I will let you know, this is one of the first places that I’ve seen that they’ve been using up a bathhouse. So the tiny cabins do not have bathrooms. You do have to walk to a bathhouse. I think you get your own individual bath once you book. They’re broken off probably for plumbing purposes, but interesting use there. So check that out how they started with the A-frame, and I think they’re building around the 40 acres.
And then the second thing that I saw that was super creative is they have a maker space in the A-frame and it is decked out with any sort of like crafting supply that you would like. And I think they are encouraging people to come to the A-frame, to unwind, to journal, to paint, to draw. It’s just a really cool space and they have tons of shelving. You can check it out. You can see all of the supplies that they have. They’re just really well done and interesting. I haven’t seen a maker space in a home.
Sarah Karakaian: [00:02:47] Yeah. All right. And also I noticed, too, so I wanted to point this out. They do a good job of really leaning into work-from-home spaces where they say point of view, someone from Minnesota who wants to escape to a cabin and get some work done, I know Annette and I are actually doing that exact thing, so really thinking about who you want to come and stay with you so you can change your messaging to lead them in is really great because then your potential guest is going to say, “Oh, that’s me.”
And just feel like you’re kind of talking to them. So really well done. With that, we’re going to move on to the episode and this is an episode that we’re going to discuss the Airbnb winter updates–
Annette Grant: [00:03:27] 2022.
Sarah Karakaian: [00:03:28] 2022, that came out a few weeks ago, but we’re going to talk with them now. We’ve had some really time to think about it. Remove ourselves from the immediate thought that, well, maybe you don’t feel the same way we do, but sometimes it just feels like Airbnb is always on the guest side. It feels that way.
But when we thought about all the different angles and all the different ways to think about and leverage some of the updates, we think some of our viewpoints that we’ve gotten from our members, fellow coaches, we kind of brought it all together and we want to share it with you here today. So if you’re watching on YouTube, I’m going to bring it up here on the screen so you can see it with us. And–
Annette Grant: [00:04:04] If you’re not watching on YouTube, what the heck? Subscribe. We put content out that’s very different there than our podcast. Our podcast is there, but we do all sorts of content just for YouTube.
Sarah Karakaian: [00:04:16] So let’s start with the biggest topic of discussion, which at first I will not lie to you, I was very upset with and I was like, oh, like how dare they? Airbnb is introducing total price display and updating guest checkout.
So starting in December, Airbnb will begin rolling out the option to display total price in countries without existing price display requirements. Total place price will include all fees before taxes and to be shown in search results as well as on the map filter and listing page. So before confirming their booking, guests can still view a full price breakdown that shows Airbnb’s service fees, discounts, and taxes as well. So let’s break this down, Annette.
At first, we felt kind of like, well, what the heck? Hotels bury their fees all the time, so why is it that this is a concern that Airbnb has felt they need to bring to light and make an adjustment? Obviously, they’ve been getting feedback from the guests.
Annette Grant: [00:05:18] Yes. And I hear this from friends and family all the time. They find a place that’s $100 a night and then by the time the taxes, the fees, the cleaning fees, it’s like over $600. They’re like, “Wait a second, I fell in love with this place and now it’s over 600 bucks.” So the consumer feels duped a lot of times when they’re searching for their perspective.
Sarah Karakaian: [00:05:38] But as you brought out, so Annette and I hosted our first live event in Vegas, and we stayed at the hotel that we presented our conference at and we checked out there was fees upon fees that we didn’t even know about. So this whole fee thing isn’t special to Airbnb, but Airbnb is saying that your price is going to help you or hurt you rank on their website. So they are prioritizing total price instead of nightly price in our search ranking algorithm. This means that for similar listings in the same area, those with the highest quality, so best reviews and best total price which a.k.a. read most competitive/lowest price will rank higher in the search results.
What does that mean to us? Here’s what you want to think about. If you are hosting shorter stays, you’re going to have to get very strategic with this. And this includes Annette and myself. So we host in a metro market. We host a lot of one two-night stays where fees can really add up if we’re not careful. So we might want to strategize if they stay one or two nights, it’s this pricing setup and if it’s three plus nights, we can obviously have a lower nightly rate and introduce some different fees to offset. And what fees do we have?
So we obviously have the cleaning fee. You could have a pet fee, which we’ll talk about that in a little bit. You could have a damage fee for yourself if you do in-house damage waivers, you could have boarding fees, amenity fee, whatever kind of fees you want to have, you can do that with an Airbnb. But now they’re not going to show it to the guest upon checkout, it’s going to show up right there at the beginning.
So consider that you’re going to have to really be dialed in on your pricing and how that affects where you show up on the search algorithm pricing tool for hosts starting in early 2023. So as the airing of this episode, this is not yet true or not yet active. We will provide hosts with new pricing and discounting tools to help them understand the final price guest pay and how to set competitive prices.
We expect these changes to help host be more successful and provide even greater value to guests. And of course, this is actually a new topic. So we’re in talk about the whole guest check out the change. But let’s continue talking about pricing real quick. One of our coaches inside of our membership as we were moaning and griping about this, she goes, well, hold on, everyone. I think this is actually really good.
Annette Grant: [00:08:16] Especially for independent hosts.
Sarah Karakaian: [00:08:18] Yes. So those of us who aren’t giant companies, those of us who host less than 10 properties, who are still very integrated into the guest communication process, this is going to be great for us because those bigger companies that were also competing against on the Airbnb website, they are jam-packed with fees. So they’re not going to know what to do with this, and this might finally give us–
Annette Grant: [00:08:45] A competitive edge.
Sarah Karakaian: [00:08:46] A chance to stand now, because I thought like my three fees, my two fees is going to be like, well, now they’re never going to pay it. And they’re like, “You have to compare yourself to your competition while this competition is these people with these vast amounts of houses.
Annette Grant: [00:09:01] The other part, too, and Corey is her name, by the way. Corey was just really getting everybody pumped up inside of our membership because here’s the number one. I think the biggest thing every time there’s any sort of pivot or change is to be excited about it and know that the cream of the crop is going to rise to the top.
There’s always going to be waves of new things and you have to just be prepared for it as a business owner and always see the silver lining and that is what she was really helping our group and champion. Like, look, we are in direct contact with our guests, most people, our listeners, and inside our membership, they’re not having their guest interaction go overseas to a virtual assistant.
So you’re going to be able to answer those questions. You’re going to be able to show the value of why your place should have these certain fees or why it commands the rate that you are offering, what you’re offering, why it commands the pricing that you have.
So I think just having that positive perspective whenever there’s a change and understand that Airbnb has done a ton of market research before– they do so much research before they actually roll out these changes, that they do have to have the best interest of obviously the guest in mind, but also the host and the super hosts that are going to rise to the top, you are going to rise to the top.
So I think let’s think about– obviously, you want to be very aware of what’s happening in your area. But like Sarah said, this is a time to really take a look. Okay. Wait a second. My cleaning fee. If it is just a one-night stay, am I still competitive? If it’s a two-night stay, do I have different maybe nightly minimums that help me stay competitive?
Maybe it’s just time for you to rethink your business. And I think that’s what a lot of people don’t like when the boat gets rocked because they’re just kind of like–
Sarah Karakaian: [00:11:00] Coasting.
Annette Grant: [00:11:01] Coasting, steady, eddy moving along. And it’s like, oh, wait, I need to reassess and pivot. So let’s think of it as a healthy shakeup for us to reassess everything and be able to do some market research.
Sarah Karakaian: [00:11:11] We also came to the mindset or the thought process of, well, if we’re going to be quote-unquote, “putting” all these fees up front, but then at the end, guests can see a total breakdown with taxes and Airbnb service fees, isn’t going to be more evident that guests are going to see how much Airbnb service fees are? And we all know whether you follow Annette and me or the other short-term rental content producers out there, we are championing direct bookings and bringing it. Direct booking is not a new thing everyone–
Annette Grant: [00:11:42] Before the original. Yeah.
Sarah Karakaian: [00:11:43] It is the original before Airbnb. How do people stay in vacation rentals? They went to like vacationrentalhouse.com. You know what I mean? They went to the website to book or they called.
Annette Grant: [00:11:50] They didn’t go the website. Yeah. They like found it and then sent them a check.
Sarah Karakaian: [00:11:55] When was the dot-com era? Like 2000. So there’s a few years maybe of a website booking. Anyway, they book directly with the company and so now guests are going to see they are paying a premium for that quote-unquote “protection” of Airbnb, and is it worth it to them or not? This might actually help us in our quest to have a more balanced lead ratio of where we’re getting our guests from. So that’s cool, too.
Annette Grant: [00:12:20] Yeah, we were excited about that part of this. If there’s going to be full transparency, we’ll see if the transparency is there on Airbnb side, they’re retaining for just connecting the reservation. So that’s something that should be extremely exciting and you being able to show that value to a potential direct booking guest.
Sarah Karakaian: [00:12:41] Actually, I’m cheating here a little bit, but we had someone call into our AMA episodes and say, how do I convince a guest? How do I show a guest the value of booking direct? Unfortunately, because guests feel they’re protected by Airbnb and honestly, they kind of are because Airbnb is going to go up to bat for them if there is a discrepancy more often than not, they’re going to go with the paying customer in terms of who’s going to get the payout or what have you.
But as we can see, they’re paying a pretty penny for that every time they book with Airbnb so it’s not like it’s free. They’re just paying into it every single time, so when you ask like what the value is, it’s going to be a better rate. When guests book direct with you, you want it to be a more attractive rate for them.
And then you’re going to have to work on that and trust factor with that potential guest. Are you sending them emails? Are you offering them discounts? Are you remembering they come and say it again? You’re going to have to build that trust that a lot of small businesses have to build with their clients.
Annette Grant: [00:13:37] And it might have to come from them booking via an OTA in the beginning, which is fine, and then you can retain the reservation moving forward.
Sarah Karakaian: [00:13:45] Another food for thought for you as get into the new year and you are restructuring maybe how many nights guests can stay and your cleaning fees, maybe there’s a less expensive for a one-night stay and a more expensive for multiple-night stays, as you’re diving into all of that, something to keep in mind in general, not just the short-term rental industry, but any industry, when fees get excessive, it’s when they exceed 30% of, in our case, the nightly rate or the overall stay so depending on what you’re calculating it for.
Annette Grant: [00:14:16] So take a look at that. Again, the 30% is your cleaning fee out of control and in comparison to your nightly rate. And I understand maybe to get someone in professional to clean, it is more than 30%. But maybe that’s somewhere you’ve got to work on your numbers. That doesn’t mean that the guest needs to cover all of that. Maybe that’s somewhere else. Are you making a lot of money at the end of the day on the nightly reservation? You’ve got to give and take that.
Sarah Karakaian: [00:14:46] You’re going to shrink in the algorithm because of your high price to cover your cleaning fee because you know what you need to make. So, yeah, you’ll be covering your cleaning fee, but if you’re not getting bookings, then it’s a catch 22 there. So you really have to, again, know your numbers, dive it all down.
Actually, inside of our membership, we have a nightly reservation calculator where we help our members dial in everything it costs to run their property, whether a guest stays there or not and you can plug in the number of nights and you can find out what your bottom line is per night.
And if you’re staying three nights, here’s what you can charge. If you’re for nights, here is what you can charge. So if you can dial it in with that level of accuracy, you can really figure out what your fee structure needs to be. And maybe it’s different for one, two nights, days versus three plus nights days.
Let’s move into– this is where it’s really heated debate– improvements to guest checkout. We’re providing guidance to host that if they have checkout requests, they should be reasonable and displayed to guests before they book. Guests should not have to do unreasonable checkout tasks such as stripping the beds, doing the laundry, or vacuuming when leaving their Airbnb.
But we think it’s reasonable to ask guests to turn off lights, throw food in the trash and lock the doors. Just like they would do when they’re leaving their own home. So let’s chat about this, Annette. When you first saw that, what were your immediate thoughts?
Annette Grant: [00:16:11] I’m down with that. I think the least amount of work possible– I don’t know. We do charge a cleaning fee. So I think stripping beds and stuff– I get grossed out about that because I don’t really know how they’re going to do the laundry. Are they going to put laundry detergent in there? It’s always suspect to me.
Vacuuming, no way. I don’t know. Leave a vacuum for them if they spill. I will say this, too if you have a remote space, though, I do know there are some hosts that ask for a lot of different cleaning because maybe they are super duper remote and they needed help with like maybe actually taking the trash all the way out. Or maybe there was something, let’s say it is a cabin like washing all the dishes just because of rodents and bugs and things like that.
I do think also it also depends on where it’s located, what the price point was. But I do think it is fair to let them know ahead of time, not just hitting, smacking them with it like when they check-in, it’s like, oh, by the way, you need to do this 75 point checklist. So I think there is some differentiation there on what’s provided and what’s asked for and what the fee is.
Sarah Karakaian: [00:17:21] Before we get all hyped up too, because I know we can get very defensive as host because we work so dang hard, period. But the fact that there are articles out there by USA Today, Forbes, there are gifts out there, there are trending reels out there making fun of hosts and their ridiculous checkout requirements means there are hosts out there asking ridiculous things of their guests.
So again, I think this is rooted in some truth. And if we’re just being honest with ourselves about how we can meet these guests’ requests and Airbnb suggestions, either halfway or most of the way, especially if Airbnb is still your biggest lead generator, you’re going to have to play by their rules. So if you have your cleaner strip the beds. Here’s where my cleaners actually like when they don’t strip the bed, so I’ll just help you change your mind. A lot of hosts do this, is my clean is like it left on.
So number one, they can keep it all organized. So if you’ve got a bunch of twins, queens, kings, and under one roof, you can keep it organized. Two, our cleaners like to look for stains before they take the bedding off the bed because everything’s laid out nice and flat. You can see and test it right there. Stripping the bed is not a big deal.
When Airbnb says doing the laundry, do they mean throwing the towels in the washer with a laundry pack and pressing start? Or do they mean make sure you fold and wash all your bedding? So it’s unclear. All right. So there’s that and vacuuming with Airbnb, I agree with Annette. I want to leave the vacuuming, the actual cleaning to a professional cleaner. You don’t know what kind of experience cleaning your guests have, so if you ask your guest to do this stuff, it seems to me you’re losing control of a very important aspect about your operations.
Annette Grant: [00:19:01] And I’m trying to think of the most ridiculous request I’ve had when I’ve stayed.
Sarah Karakaian: [00:19:06] Oh, I’ve had an Airbnb. It was in Portland. I’ll never forget it because the fee was so high. By doing the laundry, they meant wash the bedding, fold it, and put it back on the bed. We had to put all of our dishes away so clean and then put away and we had to sweep the whole– it was–
Annette Grant: [00:19:22] Was it a shared house?
Sarah Karakaian: [00:19:24] No. It was a single-family home and then the fee was like 250 bucks. And we were like, “No, we’re not doing that.” But I want you to remember, if you haven’t logged in to your Airbnb listing via Airbnb, make sure you do that often because as they roll out these updates, there might be some things you have to check off, uncheck, change your verbiage, all that. You want to stay up to date so that the algorithm likes your listing and you want to make sure you’re complying by these rules. You want them to bury your listing because you still have for them to do the laundry on your checkout instructions. So I think that’s all we wanted to say about those two things.
And then we also wanted to talk about Airbnb is definitely marketing towards any of you out there who have not yet opened up your first Airbnb, or maybe you want to open up your second or third and they’re always quote-unquote, making it “easier” for you to do that. While going through the seven-minute process of getting it uploaded, we all know there are so many things to check on, check offs that you show up and in searches and all that kind of stuff.
So Airbnb, yes, it’s easy, but you also have all the stipulations so that we can show up in your search rankings that listeners, you want to make sure you’re always in your account and always seeing what changes they’re making and staying up to date with them.
But some things that we wanted to talk about are– and I have some real-life experience I can share with you. But the guest identity verification is becoming stronger. So again, that’s great. This is Airbnb’s way of hoping that you’ll keep all of your bookings and all of your lead generation on their platform. So think long and hard about that. 3 million in damage protection, so Airbnb reimburses you for damage caused by guests to your home and belongings and includes these specialized protections. And one of them, actually, I’ll let you know how this goes, but one of them is art and valuables.
We had a guest who drunkenly fell through the front door of an 1880 Victorian and damaged it, went through the glass and it had this bevel that isn’t even to code anymore and the screen door and fell from the inside out. And Airbnb would not come to our aid because it was an art. It was an art or valuable because it’s not making buy at Home Depot. But now they’re saying they’re going to cover it.
Annette Grant: [00:21:48] Did they reverse that?
Sarah Karakaian: [00:21:49] Well, that’s what I say. I’ll keep you guys posted because you better believe I was like, this happened six weeks ago and you all told me you wouldn’t cover art. So we ended up covering it ourselves, but it would be nice to have it come from them.
Also, income loss is interesting. If you have to cancel Airbnb bookings due to gas damage, you’ll be compensated for the lost income. So that’s interesting. They protect the cars, boats, and other watercraft that you park or store at your home. What they haven’t said there is–
Annette Grant: [00:22:17] So interesting.
Sarah Karakaian: [00:22:18] If guests hurt themselves on those items what happens.
Annette Grant: [00:22:22] Pet damage, we will pay to repair damage done by a guest pet. Probably have a door or two scratch.
Sarah Karakaian: [00:22:29] And then, of course, the 1 million liability insurance, which you are protecting the rare when that guest gets hurt or their belongings are damaged or stolen in their place. And listeners, I want you to understand and two, Annette and I just booked an Airbnb with actually someone who has listened to the podcast before, so that’s lovely. But as I was going through the checkout process, it offered me the opportunity to purchase travel insurance.
Annette Grant: [00:22:51] Love it, I freaking love that.
Sarah Karakaian: [00:22:53] But before you purchase it, I found out that my credit card would protect me while I’m traveling and staying in Airbnb, so I opted not to accept that. But that’s something now you can put in your messaging before the guest books. You could say, “We just want to make sure you understand our cancellation policy,” whatever it is, and that you’ve been given the opportunity to purchase travel insurance by Airbnb or check with your credit card because we will uphold our cancellation policy no matter what.
Annette Grant: [00:23:19] Yep.
Sarah Karakaian: [00:23:20] So there are some different things that are happening with Airbnb. Again, they want to keep us on their platform, everyone. But remember that means that we have to play by their rules. And if they decide because you better believe there’s a whole disclaimer page that dives into what means what. If this happens, then we’ll say yes. If this happens, we say no. Get the guest involved to what happens. So it’s not black and white.
Annette Grant: [00:23:47] So exciting though. I like it. It’s good. It’s all progress.
Sarah Karakaian: [00:23:50] There are six new categories. So there is a new category. Great finds added to Airbnb within past 10 weeks. So if you have a new short-term rental that you’ve uploaded to Airbnb, it will get some extra love.
Top of the world homes around 10,000 feet above sea level are getting some love, trending. Highly rated homes, getting lots of attention on Airbnb. We have four or five of our properties there trending right now, which is fun adapted. And this is where I’m also diving in headfirst. So verified for step-free paths into the home, bathroom, and bedroom, so accessibility. Even if it’s not ADA adapted, you can highlight the areas within your home that are more easy to navigate, play places with game–
Annette Grant: [00:24:36] Water slide. That’s fine.
Sarah Karakaian: [00:24:39] But also fun.
Annette Grant: [00:24:40] I don’t know how to say this.
Sarah Karakaian: [00:24:43] Canucks.
Annette Grant: [00:24:44] Traditional Korean homes.
Sarah Karakaian: [00:24:44] Yeah, made from natural materials.
Annette Grant: [00:24:46] And you can correct us if we’re wrong on that.
Sarah Karakaian: [00:24:49] Please do. And they’ve also said that they are going to make it more visible on how to get our homes to appear in these categories. So that’s great too. So as always, Airbnb, they are always making changes, not just coming our aid. But let’s wrap this up really quick with the two things we want you to take home or really look at your cleaning requirements of your guests, maybe highlight the fact because obviously, this is a pain point, highlight the fact that you just want them to lock their doors and the windows–
Annette Grant: [00:25:21] And to enjoy themselves. Check out.
Sarah Karakaian: [00:25:23] And check out and then also your fee structure, this is where you’ve got some homework to do over the next several weeks and make sure you’re really dialed in and understand how much need to bring in each month to remain profitable. And also so you can rank on the algorithms of these OTAs. With that, I am Sarah Karakaian.
Annette Grant: [00:25:40] I am Annette Grant and together we are–
Both Sarah & Annette: [00:25:42] Thanks for Visiting.
Sarah Karakaian: [00:25:43] We’ll talk to you next week. Thanks for listening to the Thanks for Visiting Podcast. Head on over to the show notes for additional information about today’s episode. And please hit that subscribe button and leave us a review. Awesome reviews help us bring you awesome content. Thanks for tuning in and we look forward to hanging out with you next week.
