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Popular FAQs

Will I Make Money Setting High Airbnb Rates?

New owners are concerned, initially, with the daily rates we set.

“Set the Airbnb rates high and I am happy. Rates are my measure of success!”

For example, I got this email from a new owner, after we notified him of his second booking.

I would have expected the going rate to be higher late in November….but I know you guys know what you are doing.

Although he says we know what we do, he is concerned. Correctly so.

And most owners, initially, feel the same way. Only high rates will ease their minds. But after they realise we are stacking snow, hand upon hand, building trust they get the idea.

Who can stop a snowball of trust?

Eventually, they happily bank a lot of money as the trust-snowball gets momentum and picks up speed.

Patience is the name of the game. We must crawl before we walk.

Unfortunately, rates are not based on fact.

It’s based on the time for guests to take action (speed to book or lack thereof – more below), the level of trust you established (reviews for example), perception etc.

At the moment your new house has no reviews and therefore no trust. No guest will take action (book your home) without an incentive.

Why Would An Airbnb Guest Be Your Guinea Pig?

Guests do not book willy nilly. They base their decisions on the ratings by other guests – positive reviews, Superhost status. Do they like the features, the photos, and the rates? There are more, like cancelation policies, etc.

You can have it all but with no reviews, your home will come second when compared to similar homes with many reviews.

Therefore, you really don’t have much of a choice but to make it more attractive and your only ally – competitive rates.

This means you can bring guests to take action faster with rates you may perceive as uncomfortable.

At ground zero you are buying reviews. You are paying a price to get trust.

Our only aim is to focus on achieving higher annual income. This will change your mindset. You now focus on the long term. One solid hand of snow at a time.

Let’s talk time/speed ….

The issue with maximizing rates, in isolation, is it ignores time-to-take-action – speed at which you get or don’t get bookings (more below) . High rates are useless if over time you get no bookings.

Consider the “slower and faster” time to take action scenario:

Let’s say you set high rates and after two weeks you have no bookings. Well, you have nothing to bank and have no possible reviews to build trust. This is slow and useless. And you end up like the rest who try to make money with Airbnb.
Let’s say you set a rate and get a booking for 28 days within a week, then another few bookings. Fast.

Use Feedback From Time-To-Action!

We are getting feedback from both above.

The first one we know we are wasting our time. Zero money. Zero reviews. No launch.
With the second option, we know people are interested and the snowball is being packed. By getting bookings so quickly we are going to get many reviews quickly. Trust. Even if the rates do not meet our expectations.

Action speeds up, due to high demand, we can conclude:

Our Airbnb rates are too low and we can now increase. If we cannot increase now we will increase the rates for the same time next year. Slowly over time, as we collect more reviews, increase occupancy we tweak the rates upwards. And the owner is happy.

If demand slows down we start all over again by reducing rates until guests start taking action faster. And slowly work our way up again.

On the other hand; if you are focusing on high rates you may impress your neigbours but not your bank manager.

Allow us to do what we do best; focus on time to take action, get bookings and reviews and accumulate. Based on these multipliers we will get better than competitive rates. Why? As we build trust the time to take action reduces (higher demand) and due to demand, we increase the rates. Over time the tortoise wins the race.

Patience is the game now.

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Cape Town Airbnb Management Agency

Hi Johan here. Welcome. Thanks. Knowing you are taking time to watch is really encouraging. Our Cape Town SuperHost team of memory creators Unhassle AIRBNB Management and Unlock Value For Absent Owners and Hosts like you.

Y ou have read the previous Airbnb Host tutorial articles (here) in the series?

Explain instant booking & benefits/consequences?

Instant Booking is one of the features hosts don’t really have an option with. Airbnb gives you another option where guests can first discuss a booking. But still, you cannot decline if you don’t have a very good reason. And guests don’t like being rejected when your calendar shows availability. And if we cancel the hosts will never keep their status as a SuperHost (see more).

Instant book has two possible aspects:

Guests book immediately. They don’t need to enquire.
It does not mean guests stay instantly. Book now and stay within the next hour. No. We set what’s called a minimum notification period. For example, depending on the home, we set 24, 48 hours up to 7 days notice is required before they can stay. BTW: We also set prep days before and after a booking. We can set one, two days, etc.

Let’s get to the details:

Instant booking means we must ensure 100% integrity of the calendar.
Any verified guest can reserve the accommodation immediately if the calendar shows availability.
Any guest who instantly reserves do this by accepting our rules we set with the owner and the rules (T&Cs) by the booking sites like; Airbnb and Booking.com.
All reservations must be accepted by the owner as he appointed us to do it per our T&Cs.
CapeHolidays don’t check availability with the owner before a guest do an instant reservation.
But what about owner reservations? The owner agreed to first check availability with the agent at all times and only then reserve the accommodation for his own use.
Owners cancelling guest reservations: cancellations carry no owner penalties only if the cause is a major disaster or something out of reasonable control.
Owners ending/cancelling the agreement do it in writing. All current/confirmed reservations are honoured. Any owner not communicating the cancellation of the agreement will honour future bookings. If these are not communicated and/or honoured the owner is liable for penalties.
All websites like Airbnb and Booking.com do instant bookings. This increases the chances of getting reservations. Read about Airbnb Instant Book here.
Instant Booking Objections: Uninformed owners believe instant-book is a way to book riff-raff. Far from it. Airbnb is good but dominating force. (Either you don’t get bookings, or you are aware of their dominance and work accordingly). Instant-book not only works because of the psychology behind it, it also allows hosts to set up triggers to block bad guests with no or few reviews who cannot book instantly. We also can ask the quests to give us qualifying answers. If they fail you can cancel penalty-free. On the other side for enquiries first; if you opt for enquiry first you are looked upon as a judge; do you cancel because of prejudice? People do. You are too fat, too ugly, too white etc. Airbnb, therefore, limits the rejection of non-instant bookings; you justify your case for a non-instant booking rejection; if you reject too many you get kicked off. There are risks in any business. (If the kitchen is too hot don’t become a cook).

Read Why Are You Not Keeping Us Informed On The Pipeline Of Bookings?

What the above means is that everything works extremely well if the agent can ensure 100% calendar integrity. As agents or hosts, we cannot do our business best without instant booking.

Here’s a typical email from a worried owner.

Just one question. With instant booking, how do we vet the client?

I would first like to find out who they are etc. I have heard nightmare stories of houses being let and then the owners not being able to get the short term tenants out again.

Can I opt out of the Instant Booking option?

We don’t ever recommend not using Instant Book.

Obviously, there are risks. We must take the route less likely to bring us in to trouble. But risks will always be there. It’s not an Airbnb issue. It’s the nature of humans. There will always be dudes out there to try and fool us.

Instant bookings are complicated psychological triggers which bring Airbnb etc more money because people are eager to book. Take this away and you get less bookings. Airbnb does not like that. They promote Instant Book. If they have 200 homes in Rondebosch and 100 are instant book they place the instant books on the first page.

Therefore……

Airbnb made it easier to cancel an instant booking that an enquiry. Look at Airbnb using “penalty-free if you’re ever uncomfortable” under instant booking. They must qualify as follows for instant booking:

From the Airbnb site:

Instant Book

Guests who meet all your requirements can book instantly. Others will need to send a reservation request. You can cancel 100% penalty-free if you’re ever uncomfortable with a reservation.

Guests who can book instantly must:

Meet Airbnb requirements
Agree to your House Rules & Expectations
Acknowledge that Airbnb homes can be different from hotels

Guest Requirements

Profile photo

If you turn on this requirement, you’ll be able to see guests’ profile photos after a booking is confirmed, but not before. It’s turned on.

Government-issued ID (Instant book only) It’s on.

Require guests to submit government ID to Airbnb in order to Instant Book. If they don’t meet this requirement, they will send a request instead.

Recommendation from other hosts (Instant book only) It’s on.

Require guests to have recommendations from other Airbnb hosts and no negative reviews. If they don’t meet this requirement, they will send a request instead.

House rules

Suitable for children (2-12 years)

You can decide to restrict guests with children from booking if there are features that are dangerous for children or there’s a risk of property damage. Learn more

Suitable for infants (under 2 years)

You can decide to restrict guests with infants from booking if there are features that are dangerous for infants or there’s a risk of property damage. Learn more

Pets allowed NO

You can limit guests from bringing pets, but you must reasonably accommodate guests that might bring an assistant animal. Learn more

Smoking allowed NO

Events allowed NO

The following is a flexible list of Host rules:

– No Parties allowed
– Pets live on the property during the year but not while you are there
– The pool has no cover and guests take full responsibility for open pool
– No overnight guests.
– No loud noise after 10:00 pm.
– Have fun and respect your neighbours.
– After 6 pm arrival at R350 cash on arrival.

– Domestic worker rules:________

Win Unhassles Airbnb eBook & Plus Advice Worth R10000

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Cape Town Airbnb Management Agency

Y ou have read the previous Airbnb Host tutorial articles (here) in the series?

Can I Cancel A Booking & What Happens If I Forget To Report Unavailability?

If the owner ensures the calendar is always correct there is no reasonable-justification, for the owner, to cancel; other than for extenuating circumstance (Acts of God).

Therefore clause 3.3 in our T&CS should never be an issue. This clause, however, will ensure owners who may not have the best intentions stay honest. And is that not one reason for an agreement; to keep the bad guys honest?

The quick answer is you can not cancel any booking. And not reporting unavailability to us for whatever reason has serious consequences.

Here’s the long version:

Risk. As you know all businesses have some risk. Even though these risks have an extremely low probability please take note.

One of the risks is what’s called Instant Bookings. Instant bookings increase the chance for bookings.

When guests meet set criteria they can instant-book. And we cannot cancel as we will face severe penalties. Not only is there a cost involved but we can easily lose our SuperHost status.

When an owner agrees to our terms and conditions we share this risk and must limit it.

We, therefore, must indicate to owners, who may not take this seriously, the risk and consequences.

Let me quote the Terms and Conditions:

3.3 If the OWNER cancels or cannot host as agreed, a confirmed booking, a penalty of US$1500 will be paid by the OWNER to the AGENT and the OWNER will be kept liable for any additional losses incurred by the guest who made the booking and any losses occurred by the AGENT, excluding ‘Acts of God’.

The loss, when the owner rejects a confirmed booking, is not measured only in monetary terms. No. The cost to lose our SuperHost status is not quantifiable.

Booking.Com makes it more difficult.

Booking.com says that if you cancel a confirmed booking, you must find alternative accommodation for the guests. If you cannot they will find similar accommodation, and if the rates are higher then you will be liable to pay the cost to relocate the guest.

Therefore, we, explicitly, share with the owner the risks and consequences of rejecting a confirmed booking.

How often does this happen?

Well, infrequently, but we have had one or two peak only owners who have asked us to market and then remove their homes from the market, without notifying us when it happens. In these cases, we accidentally learned about it. Next time we may not be that lucky.

The risks are low as long as owners inform us of changes well in advance.

Win Unhassles Airbnb eBook & Plus Advice Worth R10000

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Cape Town Airbnb Management Agency

Y ou have read the previous Airbnb Host tutorial articles (here) in the series?

What are the hosting risks of Airbnb?

New Airbnb owners should be aware of the hosting risks of Airbnb and do something to limit it.

NOTE: In general, you may never even encounter any of these issues. Reading about these risks may scare many owners. If that is the case then you make take this as an absolute. It’s not. The risks are very low.

Let’s consider a list of risks of hosting Airbnb guests and solutions here:

Win Unhassles Airbnb eBook & Plus Advice Worth R10000

Give & Win Give & Win the Unhassle Airbnb eBook

Cape Town Airbnb Management Agency

Y ou have read the previous Airbnb Host tutorial articles (here) in the series?

Quick Self-Catering Listing Application

Qualify For CapeHolidays Management & Marketing…

Will I Make Money Setting High Airbnb Rates?

Related Reading:

Explain instant booking & benefits/consequences?

House rules

Related Reading:

Can I Cancel A Booking & What Happens If I Forget To Report Unavailability?

Related Reading:

What are the hosting risks of Airbnb?

Related Reading:

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