Top 5 common mistakes hostels on Airbnb make
While many hostels are listed on airbnb as an Online Travel Agent (OTA), few hostels on Airbnb use the site it to its full potential to capture reservations and increase direct bookings.
Does your hostel make any of the following 5 costly mistakes?
1) Not listing on Airbnb
Your competition is most likely there, so why aren’t you? Airbnb is one of the fastest growing accommodation booking platforms and although it can be seen as a threat to hostels, when used properly it can also increase a hostel’s bookings and revenue.
As airbnb was originally created for peer-to-peer (P2P) apartment/room rentals it is actually perfectly suitable for the hostel market. With their use of common areas, activities, and shared dorms, hostels were the pioneers of this very type of travel, and are a great fit for the airbnb users who are looking for a more personal and flexible accommodation option.
The ability to have a conversation with the potential guest prior to their reservation in order to tailor their experience to their needs and those of the hostel is a blessing, and further, the ability to accept or decline a request, combined with the low 3% commission makes this very similar to a direct reservation and therefore is more beneficial to many hostels. Also, many potential guests will comparison shop on the internet to avoid paying the high service fees, and thus being visible on airbnb will increase a property’s true direct bookings (or that of other OTAs).
2) Improper room configuration
Airbnb is designed as a unit based system. This means that it is not a natural platform for hostels that sell various units (beds) inside another unit (the room). Sure, setting up and renting a private room is very easy as it is one unit sold at one price. However, dorms are a completely different matter. In principle, the dorm-room can be booked by a single person, or by any number of individual guests that fit into the dorm.
The most common mistake with configuring dorms in airbnb is setting the unit (listing) to be individual beds. Doing this results in the listing only appearing in a search for a one-person accommodation, and furthermore limits the hostel’s reservations to only those for one person. Configuring the listings as a dorm room with a maximum number of occupants instead of individual dorm beds with a one-person occupancy is imperative for proper visibility on the airbnb platform.
IMPORTANT: The price set in a dorm listing will be the bed price for the first bed and the “price per additional guest” will have to also be set for the bed price for any additional guest after the first. To date, this “additional price per person” is not adjustable by period, date or season so in many cases having accurate pricing for reservations of more than one person is impossible. This will have to be explained to requesting guests while offering them a more accurate price for the number of guests and dates.
3) Not enough or too many listings
Having only individual-unit listings rather than working with “room type” categories that can have numerous availability on any given day creates another problem to be worked around for Hostels. Once a private-room listing is booked there is no more availability for that room on the day it was reserved for. However, the hostel may have several rooms of the same room type and thus needs to make more listings to appear with availability on a day that has already been reserved. This simple workaround for private-rooms does not suffice for dorms! Selling one bed in a dorm does not mean there are no more beds left available in that very same room.
Thus the 3rd most common mistake hostels make on airbnb: having only one listing for each room/dorm type they offer. Consider a typical 8-bed mixed dorm, for example. Once one person books a bed in this type of dorm it will no longer appear in future search results for the day it is was reserved even though there are still 7 beds available in it. For this reason there is a need for a second or even third copy of the same listing.
Careful! Making too many listings can also be a big mistake. As each listing is a unit with its own configurations (rather than a “room type” configuration), it becomes very difficult for a hostel to manage the prices, availability, and conditions for too many listings. Additionally, dorm room configurations are not properly supported by any Channel Manager on the airbnb platform.
HOT TIP: To limit the number of listings without losing visibility consider dropping the dorm room type and size altogether from the listing. Simply calling the listing “bed in a shared dorm” (and making it clear that dorm sizes may vary) will avoid having too many listings for each dorm size in the hostel and users and hostel can select a dorm room type that best fits the needs of both (prices for lower occupancy dorms can always be adjusted when making a special offer).
4) Maintain up to date availability and pricing
It can be liberating to get “requests” and “inquiries” (which, crucially, are distinct on airbnb!) before confirming a reservation, so many airbnb hosts just leave their calendar and rates unattended as they are not worried about over-bookings and exact pricing. But such freedom may come at a cost: A listing’s positioning and rank on airbnb is affected by the refusal/acceptance rate, so the more the hostel declines reservation requests, the less visibility it will have on airbnb when users search for their accommodation. Keeping your availability and prices current, competitive, and credible will boost your acceptance rate and thus maximize your visibility for future transactions. Furthermore, as airbnb only takes 3% for commissions by putting a service fee on the guest, having the prices even lower than other OTAs may result in more views leading to more inquiries leading to more direct reservations.
5) Inadequate follow-up
Does it sound like using airbnb properly takes a lot of time and attention? Yes, keeping up with and managing listings, reservation inquiries, reservation requests and the 24h response times requires manpower and a complex understanding of the platform. Sometimes it can seem that there is a need for a full user manual just for airbnb. For this reason it is frequently the manager(s) that make themselves responsible for this. However, once it is clear how the hostel handles airbnb, all reception staff should be trained in the hostels airbnb protocols. This is important for your hostel to be able to quickly respond to potential guests in a proper manner, avoiding potentially costly mistakes. If the reception does not know the difference between an “inquiry” and a “request”, how to send a special offer, keep track of confirmations and expired pre-approvals, or any other situation during the reservation process then it will be very difficult for the hostel to take full advantage of this booking platform and turn inquiries into more direct bookings and increased revenue. Furthermore, you will lose position in airbnb and thus lose business to other lodgings in the area. Training your staff on the way the site works, and following up on their procedures is fundamental for positive results from airbnb.
Is your hostel listed on AirBnB? If so, what is your experience? If not, what is holding you back from doing so? – let us know below.