The strategy behind LiveLocal is to offer all inclusive, fixed rate pricing.
We believe that, to be successful in stimulating the tourism market post COVID-19, accommodation providers need to move away from all the hidden surprises that appear to consumers at the payment screen.
As private accommodation providers, we are relying on you to adhere to simple and transparent, all-inclusive pricing to help guests access private accommodation in a more direct, personal, and affordable way.
So how do I cover my additional costs?
Just because you can't charge a separate line item on LiveLocal for things like additional guest fees, cleaning fees, or linen fees, doesn't mean you can't charge enough to cover your costs. What you need to do is work out the most appropriate way to recoup these costs in a transparent way for consumers.
In this article we will talk you through the approaches you can take on LiveLocal to feel confident that you are pricing your listing fairly, for yourself and your guests.
Calculating your All Inclusive Price
We recommend this option because it is the least confusing for guests.
Using this method you will calculate an all-inclusive base price using your current base price (your nightly rate excluding extra costs), the usual additional guest fees you would charge, extra cleaning or linen fees, and we will use the average length of a reservation to spread the charges.
Using this information, you can calculate your LiveLocal pricing 👈
The calculator draws a comparison between what you would need to charge on Airbnb vs LiveLocal, in order to generate the same revenue.
💡 Lets look at an example:
Suzie's place can sleep 4 adults and she plans to charge an average of $100 per night on Airbnb for the next 90 days.
Suzie also charges $20 per extra guest, after the first 2 guests, and charges a cleaning fee of $30 per booking.
Suzie's guests tend to book for 3 nights on average, with some shorter and some longer stays mixed in each month.
Suzie is hoping to be booked for 54 nights, meaning she will have roughly 60% occupancy (not important for the nightly price, but useful for the total revenue comparison for the period).
So lets put this information into the LiveLocal pricing calculator and click "Calculate"
Now let's look at the results of these calculations:
Here is what the results are telling us:
Suzie's recommended fixed price to use on LiveLocal is 💲130 per night
Using this new price on LiveLocal, Suzie will make the same revenue as she would before, but her price will be all-inclusive and transparent.
Suzie's guests will also pay only 💲139 per night on LiveLocal compared to 💲161 per night on Airbnb, due to the large reduction in platform commissions.
What if my place sleeps large numbers of people?
There are situations where the price of a listing cannot be fairly smoothed between larger and smaller bookings, without making the price for those smaller bookings too expensive. This most often occurs when a listing can accommodate either small or very large numbers (i.e. 2 guests or 10 guests).
In these situations, we recommend hosts consider creating separate listings for the different ranges of guests they wish to accommodate.
Bill's place can sleep up to 8 adults.
On Airbnb, Bill plans to charge $150 per night for the next 90 days, plus $25 per extra guest, after the first 2 guests, and a cleaning fee of $70 per booking.
Bill's guests tend to book for 2 nights on average, with some shorter and some longer stays mixed in each month.
Bill creates two separate listings on LiveLocal; one with a maximum of 1-4 guests and another listing with a maximum of 5-8 guests.
Using the calculator, Bill enters the same information into the calculator for both, but changes the "Maximum number of guests allowed" to 4 for the first calculation, then changes it to 8 for the second calculation.
The results say Bill should charge $210 per night for his 1-4 guest listing, and $260 per night for 5-8 guests.
Now let's look at what decisions Bill might make from this information:
Strategy 1 - Looking at the results, Bill decides that he would rather 'target' the larger guest bookings instead of having his place blocked off by 2 person bookings and miss out on the juicier larger bookings. He's ok with his place being empty some of the time, so Bill decides to put one listing on LiveLocal for up to 8 guests at 💲260 per night.
Strategy 2 - Bill decides to go ahead with making separate listings, though for the 1-4 guest listing at 💲210 per night, Bill updates his listing description to explain that 'not all the beds will be made and some rooms will be blocked off' to make sure that he doesn't incur the same turnover costs as the 5-8 person listing.
Strategy 3 - Bill decides to go large and target every type of guest he might get to make sure he can get as many bookings as possible in the coming 90 days. He adds a discount of 15% to the "Any extra discount" field in the LiveLocal price calculator then recalculates his figures. Bill creates a single listing for up to 8 guests at 💲220 per night. Bill gets a booking the same day!
What about variable pricing for seasonal changes?
In another article, we explain fixed short-term pricing works, why we shouldn't fear it, and why it makes good business sense for private accommodation in New Zealand.
Prices you set on LiveLocal are only valid for enquiries and reservations up to 90 days in advance, which means you don't need your pricing crystal ball to extend across major seasons. You can still maintain a separate price for summer and winter. You can also update your LiveLocal price every day, to increase it gradually as a high season approaches.
What if I just collect extra fees outside the LiveLocal platform?
We don't have many rules on LiveLocal, but we do have one : that our hosts are committed to offering all inclusive, honest, transparent pricing. It is the fundamental thing that sets apart LiveLocal from other platforms, so we will work to maintain the integrity of that commitment to consumers.
If a host is advertising that they will collect additional fees that are compulsory for each reservation (i.e. additional guest fees, or compulsory cleaning fees), we will investigate and, where necessary, work with that host to correct the issue. It is our expectation that all compulsory fees should be incorporated into a single, all-inclusive nightly rate.
It is expected that hosts will charge for extra optional services they provide to guests during their stay (i.e. snacks, grocery delivery, BBQ hire, bicycle hire, etc). You can read more about how to charge for extra services in our separate article.