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When it comes to your Airbnb's minimum stay policy, the choices you make can impact guest satisfaction and your earnings. There are various ideas on what's best when setting your Airbnb minimum stay policy, and each host may have a different approach.
Some hosts prefer a three-day minimum, while others lean towards week-long or even month-long stays. There's also the option of a one-night minimum. Depending on your location and how you run your Airbnb, you might stick with what works for you without changing it up.
However, data suggests that making some adjustments can significantly benefit hosts. Those who actively change their minimum night stay policy based on market trends, seasonal shifts, and upcoming events often see a noticeable increase in their monthly revenues.
What Is a Minimum Night Stay Policy?
Your minimum night stay policy, also known as a minimum length-of-stay requirement, is the minimum number of nights a guest can book your short-term vacation rental. It's entirely up to you as the host, and it can be adjusted to align with yearly, monthly, and weekly trends.
Why Your Airbnb Minimum Stay Policy Matters
Your Airbnb minimum stay policy matters for a couple of important reasons:
Maximizing Rental Income:
Requiring guests to book for two or more nights encourages longer stays, which can boost your occupancy rate and revenue. It can also save you time on cleaning and managing guest turnover.
On the other hand, if your Airbnb is close to an airport or convention center, accepting one-night guests might be more profitable, especially for business travelers. This can be particularly true if other vacation rentals in your area have a two-night minimum stay.
Preventing Unauthorized Parties:
Short one-night bookings are attractive to guests looking to throw parties. While Airbnb has banned parties and made this a part of their official policy, some guests may still try to host events.
If unauthorized parties are a concern in your area, setting a minimum stay of more than one night can help prevent these incidents. You might also consider banning same-day bookings or requiring same-day guests to book before 5 p.m.
The Current Landscape of Airbnb Minimum Night Stays
Minimum stay policies vary widely based on location. Factors like seasonal demand, turnover costs (the cost of cleaning and preparing an Airbnb for the next guest), and local regulations all influence the minimum stay policies hosts set.
Longer Stays During Peak Seasons:
In seasonal markets where hosts earn a significant portion of their annual revenue during peak seasons, minimum stay policies tend to be longer. Two or three-night minimum stays are common in coastal and mountain destinations. Having a minimum stay of more than one night can prevent gaps in bookings during weekends or weekdays and maximize occupancy during busy seasons.
For coastal destinations, it's common to see minimum stay policies of 4-7 nights or even a week or more. During peak summer months when demand for longer stays is higher, setting a one-week minimum stay can help maximize occupancy and reduce turnover costs.
Flexible Stays in Cities:
Compared to destination markets, cities experience less seasonal fluctuation in demand, so hosts can be more flexible with minimum stay policies. One-night minimum stays are most common in small (34%), mid-sized (30%), and urban cities (30%) where guests typically book shorter stays for tourism or business.
However, 44% of small city/rural properties and 36% of mid-sized city properties have minimum stay policies of 2 nights. This prevalence of 2-night minimums might be due to higher turnover costs in smaller cities, where labor may be scarcer, and properties may be harder to access.
Regulation and Longer Stays:
Regulations also play a role in minimum stay policies. In cities like Los Angeles, Boston, and most recently New York City, new regulations on short-term rentals have limited hosts' ability to rent properties for short stays. In cities with strict regulations, hosts often convert their short-term rentals into mid or long-term rentals, explaining why 24% of properties in urban cities (excluding NYC) have minimum stay policies of 28 days or more.
Choosing the Most Profitable Minimum Stay Strategy
In your market, hosts may prefer one minimum stay strategy over another, but this might not be the most profitable for you. Data shows that there can be a gap between what hosts choose and what maximizes revenue.
Changing Minimum Stays for Events
There are times when hosts should consider adjusting minimum stays, especially for major events. If there's a big festival, conference, or sports event coming up, it could be worth changing your minimum stay to match visitors' expected trip lengths.
For example, let's look at the data from Austin's SXSW festival, one of the largest events in the United States. During SXSW, properties with a 3-night minimum stay had the strongest performance. They had an average RevPAR of $584, while those with 4-6 night minimums also earned over $500 per night. Listings with 1 and 2-night minimums earned the least.
Setting Your Airbnb Minimum Stay
To set your minimum stay effectively, consider using tools like AirDNA for thorough research on your destination. Understand if your city is more of a quick transit location or if guests tend to stay for weekends, weeks, or longer.
Use features like Future Rates to see the expected demand for specific days. Higher demand means a better chance for longer bookings.
Explore the Booking Lead Time feature to know how far in advance guests typically book. This can help you set your minimum nights accordingly.
On Airbnb's listing management platform, you can set your minimum stay and create custom rules for specific dates. If you have gaps between bookings, consider making exceptions for those dates to maximize revenue.
Don't forget about the cleaning fee. Since this fee is charged once per booking, it's essential to factor it in. A longer booking with a higher cleaning fee might be more profitable than several shorter bookings with lower fees.
Consider the time and effort it takes to manage your Airbnb. Assigning a monetary value to your time spent on managing different stay lengths can help you make informed decisions.
Optimize Your Minimum Stay for Maximum Revenue
A well-thought-out minimum stay policy can attract guests and boost your occupancy and revenue. To stay competitive, it's crucial to know what other hosts are doing and what strategies are most effective in your market. Use data-driven insights to make informed decisions and stay ahead in the rental game.