When determining your nightly rate, there’s another aspect of the cost of your vacation rental that isn’t discussed quite as frequently: the fees. When a guest goes to book a stay at your vacation rental, they don’t just see your nightly rate. They also see all of your fees, and if you have quite a few, it can scare them away! In this article, we’ll cover exactly what vacation rental management fees are and some strategies to set them effectively. We’ll also discuss three of the most common fees: extra guest fees, cleaning fees, and pet fees.
What Are Vacation Rental Management Fees?
Vacation rental management fees are any charges that are not included in your nightly base rate. Short term rental management fees typically compensate the owner or property manager for any additional amenities or services. Monthly vacation rental management fees are 10%-50%; vary depending on the area, property category, and management type. Some of the most common short term rental management fees you’ll come across are an extra guest fee, a cleaning fee, and a pet fee.
Tips and Strategies for Setting Vacation Rental Management Fees to Guest
As you strategize and set your vacation rental management fees, remember that fewer fees often lead to higher conversion rates or more bookings. When the total fee amount is less than the nightly booking rate, the property will get more bookings than if the fees are added up to be more than the nightly rate. It’s been found that the best overall strategy to achieve the most bookings is to charge minimal fees and keep them lower than your nightly rate. Of course, every vacation rental is different, and this strategy won’t necessarily be an option for everyone. However, there are a few general tips that can help you set your fees.
Don’t list more than two or three separate fees. When guests go to book your vacation rental and are then confronted with a long list of fees, it can scare them away!
Be strategic and combine multiple fees under one category if necessary to keep them from appearing so daunting.
- Roll some of the standard fees into your base rate. As long as this strategy doesn’t drive your prices up to the point that they’re higher than your competitors’ prices, this can be a way to keep from [intimidating] potential guests. This works especially well with cleaning fees.
- Consider not charging fees. This isn’t a possibility for everyone, but it could be an option for you. For instance, you could roll your cleaning fee into the nightly base rate, then ask for a refundable pet deposit if you run a pet-friendly vacation rental. You could also raise your nightly rate to compensate for not having any fees. The choice is up to you!
The Most Common Vacation Rental Management Fees and How Much to Charge
Below, we’ve discussed the three most common vacation rental management fees and how much they are on average.
1. Extra Guest Fee
An extra guest fee is a way to earn more when a reservation includes more guests. For instance, your vacation rental might have one bedroom, plus a pull-out couch in the living room. In this case, the expected occupancy might be two people, although four guests could potentially stay there. You could then charge an extra guest fee for each person over two people.
With an extra guest fee, you can make more money with the same number of bookings. This type of fee is usually pretty low, often ranging from only $10 to $20 per extra person per night.
2. Cleaning Fee
A cleaning fee is a one-time service fee that covers the cost of cleaning after your guests leave. You don’t have to have a cleaning fee (or any fee, for that matter), but it’s an effective way of covering cleaning expenses, especially for owners that employ a cleaning company. If you clean your vacation rental yourself, then you may not feel it’s necessary to include a cleaning fee unless you’re going through large amounts of cleaning products. For more information, check out vacation rental cleaning tips.
The range of costs for a cleaning fee varies quite a bit. Typically, it’s at least $50 to $100, but it depends on the size of the property, if you’ve hired professional cleaners, and whether or not a large group stayed at your vacation rental. As you can imagine, cleaning up after a single remote worker won’t require as much work as cleaning up after a group of a dozen people attending a family reunion. Another factor is whether your vacation rental property is a budget option, a luxury option, or somewhere in between. Luxury travelers will have no problem paying a cleaning fee, but budget travelers are more likely to balk at an extra expense. If you’re renting out a room in your house, for instance, your guests aren’t likely to want to pay an expensive cleaning fee.
One strategy you can use to determine the right amount to charge for your cleaning fee is to take a look at what your competition charges. Do they have a cleaning fee? If they do, how much is it? Checking out multiple competitors can give you a good idea of the range you can consider for your cleaning fee.
Another thing to note is that a cleaning fee can potentially cut back on shorter bookings. If you’re staying somewhere for a week or two, then a $60 cleaning fee doesn’t seem so daunting because it’s spread out over a longer period of time. But let’s say you’re only staying for one or two nights. In that case, a $60 cleaning fee might seem ridiculously high!
3. Pet Fee
A pet fee is really only necessary if you run a pet-friendly vacation rental property. It can cover the special pet amenities you provide, like dog food and dog waste bags, and it can also cover the cost of extra cleaning. A pet fee can also provide coverage for wear and tear and potential property damage.
Generally, the best route to go with a pet fee is to charge a certain amount per night. You may even want to charge a different amount depending on the type and breed of the pet (some are much more prone to shedding than others and thus will require more cleaning). However, some vacation rental owners do choose to charge a flat rate for the entire stay.
A typical pet fee is around $10 to $25 per day or $75 to $100 as a flat rate. You could also choose to offer various discounts. If a guest brings a second pet, they could be charged a discounted pet rate (perhaps $20 for the first pet per day, and $10 for the second pet per day). Other options for a discount are to charge less for long stays or to cap the pet fee at a certain amount.
If you run a pet-friendly rental property but want to stand out from the competition by not having a pet fee, that’s also an option that can make your vacation rental more marketable! Here’s how to go about it: Require a refundable pet deposit (rather than charging a non-refundable pet fee) while also implementing a pet policy that requires no trace of pets be left behind. For your guests, this will involve doing any laundry with pet hair on it, vacuuming, and generally removing any evidence of their pet being there.
Of course, your guests can also choose not to do this cleanup, knowing that they will not get their pet deposit back. However, this does give them the option to essentially have their pet stay with them at your vacation rental for free. Many vacation rental owners have found that pet owners tend to be very responsible, so there’s a good chance many of them will take you up on this offer.
Setting vacation rental management fees can seem complicated at first, but it doesn’t have to be difficult. With some research and strategic choices, it’s easy to set fees so that they work for you and your guests. Here are some important points to remember when setting your short term rental management fees:
- Any charge that is not included in your nightly base rate is considered a vacation rental fee.
- Avoid charging more than two or three separate fees, and consider rolling some of your fees into your nightly base rate if possible.
- The total fees should be lower than your nightly base rate.
- The most common short term rental management fees are an extra guest fee, a cleaning fee, and a pet fee.
- An extra guest fee enables you to earn more per booking and is typical $10 to $20 per person per night.
- A cleaning fee ranges quite a bit but is often between $50 and $150. It’s meant to cover cleaning supplies and expenses, especially if you use a professional cleaning service.
- A pet fee can be charged per day or at a flat rate. A daily pet fee is usually between $10 to $25, while a flat rate is often $75 to $100. This fee covers pet amenities and any wear and tear or property damage caused by your guests’ furry friends.