BnbAmenity Blog
August 15, 2021
What Hosts Can Learn From Hospitality Industry Best Practices
Inrease Guest Satisfaction and Hosting Income
According to a study by Busbud, hotels in New York on average booked revenue of $245 per guest as compared to $160 for Airbnb hosts. While higher room rates on average in New York hotels account for some of the difference in revenue, the most important element of the difference is the success hotels have in charging for amenities, cross-selling products and services to guests, and adding numerous fees to the base hotel room rate.
Why do hotels make so much more revenue per guest than Airbnb Hosts?
Hotels collect more than $1 billion in fees and surcharges each year in the United States according to a study by the New York University School of Continuing and Professional Studies. According to the study, hotel fees and surcharges emerged as an industry practice in 1997 and have increased every year except 2002, 2009 and 2020 (when lodging demand declined). Often, guests might not even be aware of the fees hotels charge until after they have booked a room or received their bill at checkout. Some typical fees include resort fees (an extra charge for the plethora of activities and services they offer); early check-in fee, late check-out fee, additional person fee, wifi fee, mini-bar, and snack fee, parking fee, gym fee, housekeeping gratuity, spa gratuity, telephone surcharge, pet fee, baggage storage fees, newspaper fees, rollaway bed fees and even towel replacement fees! Hotel operators also achieve added revenue per guest through room service, dining, lobby bars, convenience stores, boutiques, spas, in-room movie systems, sporting equipment rental, car rental, classes, tours, and even babysitting.
Most Airbnb hosts pride themselves on providing a more humanistic offering than the corporate, revenue-maximizing approach some hotels take and enjoy connecting with their guests. Such hosts would never dream of trying to tack on a surcharge for Wifi or parking. However, some of the additional revenues that hotels realize are not just revenue but actually offset costs that they incur providing guests important amenities. If they did not charge they would not only experience a reduced top line but they would incur the incremental cost of providing the amenity as well. For example, many Airbnb hosts don’t consider the costs of offering that bottle of wine on check-in, or that firewood to use in the fireplace – but by not charging for these amenities, they not only lose a revenue stream that hotels would realize - they actually cost themselves the money they earn by hosting.
While no guest has ever enjoyed an egregious fee being tacked on their bill, many of the services hotels charge for are actually valued amenities for guests, who appreciate the convenience of being able to rent a bicycle at the hotel or buy those goggles that they forgot to bring. Some paid amenities can even make a stay magical for guests – being able to buy the kids a box of s’more materials to roast on an outdoor fire or having that bottle of champagne at the ready in the hotel room at just the right moment for a toast.
In addition, some fees are really useful for discouraging behavior that is actually costly for the host. For example, guests checking out late can make a host have to scramble to prepare their rental for the next customer and can even add substantial costs by making cleaning professionals wait out the late guest. Early check-in can scramble a host’s schedule in preparing the stay for the Guest. Pets really accelerate the depreciation of real estate’s finish, so charging a fee can be a good way to discourage owners from bringing them along.
Another key way that hotels outperform Airbnb hosts financially is by operating with higher occupancy levels than the typical Airbnb listing. Hotels do this in part through judiciously choosing their locations and setting pricing but also through maintaining loyalty programs and conducting marketing programs using their databases of past customers. Unfortunately, for Airbnb hosts, Airbnb Inc. wants to keep guests booking exclusively through Airbnb. However, by offering your guests a return stay discount directly after their stay, a host can build a loyal following of direct booking customers, while both guest and host can avoid those irritating Airbnb service fees. Marketing to past guests can also enhance your occupancy year round to achieve occupancy levels more like a well-run hotel.
At BnbAmenity we have developed a powerful suite of tools to empower hosts to realize some of the opportunities hoteliers have grasped – without taking away from the joy of offering your unique space to guests. BnbAmenity helps hosts make custom offers of amenities tailored to making their places more appealing and special to guests while enhancing the reward that they get from hosting. BnbAmenity is dedicated to allow more people thrive from hosting by creating additional host revenue opportunities.
It’s time to start using BnbAmenity to increase revenue and reduce operating costs on your short term rental!
BnbAmenity - Improve Guest Experience, Enhance Host Revenue