Crazy cleaning fees have pushed once-loyal Airbnb travelers back to hotels

DENVER — For years, Airbnb gave travelers access to reasonably priced, home-like stays. From staying in a Victorian home to a charming downtown loft, users of the popular short-term rental app were loyal and happy to shun corporate-owned chain hotels.

Airbnb offers a diverse range of accommodations in Denver with over 1,000 active listings. And Denver was listed as part of Airbnb’s top 10 U.S. cities with the most adventurous travelers in 2023. Tied for third among Houston and Atlanta, Airbnb guests from Denver visited nearly 80% of counties in the U.S.

But many users have begun to grapple with the shifting economics of short-term rentals. The cost of an Airbnb has increased so much that in many cases it’s no longer a cheaper option than a hotel.

Airbnb users like New York resident Jack Hahne, said the cost and experience of a stay is not what it used to be as he recently completed a solo road trip across the U.S.

“For a lot of the cases, either the price was about the same, maybe a little cheaper, but just wasn’t as convenient as like a hotel would be in terms of flexibility of like check-in times,” he said.

Hahne visited Denver in 2016 and paid $41 a night to stay on an air mattress in someone’s basement apartment, an experience he said he couldn’t imagine in 2024.

“When I think about Airbnb now, a lot of it is more kind of absentee landlords,” he said of Airbnb’s current listings. “Back in 2015, 2016 — there was a lot more to like the social aspect of it. Where it’s just some guy who was renting out a bedroom.”

The total price of an Airbnb reservation is based on the nightly price set by the host, plus fees or costs determined by either the host or Airbnb.

Besides Airbnb service fees and local taxes, hosts may impose cleaning fees, extra guest fees and pet fees, according to Airbnb’s website on how pricing works.

A recent search revealed an entire guest suite in Denver for just $55 per night. However, the total cost for a two-night weekend stay ended up being $254.25, far above the expected $110, because of hidden fees. The cleaning fee alone was $85.

Another Airbnb listing of an entire home in Englewood, nearly seven miles away from Denver, costs $130 for a one-night weekend stay. Their cleaning fee after selecting their required minimum two-night stay was nearly as much as their one-night stay — $120. The total cost after fees would come out to be over $470.

The highest cleaning fee The Post found was $129 for an apartment in Lakewood.

“Ridiculous” fees

Washington state resident Nicole Hernandez, who visited Denver and booked through the Airbnb app last September, said she’s noticed a change in pricing.

“When I first started using Airbnb, it felt like I could find a good deal on accommodations while staying in a less commercial place that was more connected to the community,” she said.

“Over the years, it’s become more expensive and commercialized.”

Hernandez has booked through Airbnb a dozen times for both international and country-wide travel.

She said she doesn’t mind host fees, such as the cleaning fee, as long as it’s reasonable, which is not always the case.

“I don’t mind stripping the sheets or doing simple tasks before leaving. It feels respectful considering you’re typically in someone’s space,” she said.

“But I’ve seen some cleaning fees that cost more than the total nightly fee, and that’s ridiculous in my opinion.”

Guests on Airbnb spent an estimated $210 per day during their trip in 2023 and about 40% of their spending was in the neighborhood of their listing, based on data from an internal Airbnb survey of guests in the U.S.

In 2023, the average daily rate of a hotel was $159.99 nationwide and $149.48 in Denver, according to data from CoStar Group, a leading global provider of commercial and residential real estate information, analytics and online marketplaces.

On a May earnings call, Airbnb Co-founder and CEO Brian Chesky said the company noticed there was a lot of concern about prices increasing and a lot of hosts weren’t getting booked because their prices were too high.

“They just didn’t have a really good concept,” Chesky said.

“So we created a tool called the compare listing tool, where people can see how much other people are charging in the neighborhood. And they can actually see people who are getting booked and not getting booked. And no surprise, the people getting booked generally have lower prices.”

Chesky said 2 million hosts now use the compare listing tool. But that isn’t the only thing the company has rolled out to help combat the issue of hidden fees and listing costs. Airbnb has introduced weekly and monthly discounts and implemented a total price display, where users can toggle between seeing total prices before and after fees.

“It’s begun to change behavior in our host community because 300,000 hosts on their listings say (they) have removed or lowered their cleaning fee as a result,” he said.

“When we started Airbnb, our original tagline was a cheap affordable alternative to a hotel. And the majority – the primary reason people came to us is because it was a better value than a hotel. And we still think that’s a core value proposition that we have to offer.”

According to Airbnb, the average daily rate for a stay in Denver has decreased by about $5 over the first three quarters of 2024 compared to the same period in 2022.

“We host people from all across the world”

In 2023, Airbnb guests traveled to more than 100,000 cities and towns across more than 200 countries and regions. Additionally, travel on Airbnb generated more than $85 billion in economic impact across the U.S. in 2023, according to the company’s internal economic analysis.

In 2023, Airbnb says it contributed over $3 billion to Colorado’s GDP, generating $932 million in tax revenue and supporting 34,300 jobs.

Last year, hosts in the U.S. earned more than $24 billion and the typical host earned an estimated $14,000, according to the internal Airbnb survey.

Hosts in Denver earned over $115 million, with the typical host earning over $18,000.

Queen Anne Bed & Breakfast owner Milan Doshi has been a host with Airbnb for eight months, but he has been hosting guests on the property for 16 years.

Built in the late 1800s, the historic 13-room bed and breakfast in Downtown Denver opened its doors to the public in 1987. Doshi and his family purchased the bed and breakfast in 2008.

“We host people from all across the world,” Doshi said. “We get a lot of cool repeat customers, people who had their wedding night here 25 years ago, who had some kind of familial connection with the space, it’s just a really cool legacy, and you know, we have a lot of pride in kind of keeping that tradition going.”

The family previously put the property up for sale in October 2021 for $4 million because of city requirements regarding rezoning the property. However, after finishing the 10-month-long process, Doshi said they decided to take the listing down in early 2023 as the lending market had shifted for commercial properties.

He said it was a good decision as it also allowed them to connect with Airbnb. According to Doshi, for a long time, Airbnb wanted them to be a part of their platform for the Queen Anne’s uniqueness, operation and ties to the Denver community.

As a guest favorite listing, the Queen Anne has a 4.94-star rating and is deemed a “Superhost,” an experienced, highly rated host who is committed to providing great stays for guests, according to Airbnb.

Having owned the property for nearly two decades, Doshi said he has seen a lot of shifts over the years, especially with the introduction of short-term rentals in the area.

“Initially I was apprehensive to the idea, you know, when it was just feeling very much like the Wild West when Airbnb first came here to Denver because everybody was all of sudden opening up their properties to becoming a host,” Doshi said.

To become an Airbnb host, people must obtain a Lodger’s Tax ID from the City of Denver. The platform also requires eligible hosts to obtain either a Short-term Rental License or a Residential Rental Property License.

The City and County of Denver require hosts who rent their primary residence for one to 29 days to obtain a Short-term Rental License.

A short-term rental can include a single bedroom, an entire home, or multiple bedrooms. An application fee of $50 and an annual license fee of $100 will be assessed for individual short-term rental license applications. Short-term rental licenses are for one year and must be renewed on time to avoid fines. Short-term rental licenses can be renewed up to 60 days before expiration.

Once an eligible host receives their short-term rental license, they must add the license number to their Airbnb listing, according to the company’s host requirements.

“Now I think the city has kind of upheld their end of the kind of agreements of having the primary residential aspect in place for people to be able to rent out their spaces,” Doshi said.

“I think (it) makes it a little bit more to what the original intention of Airbnb was supposed to be.”

As for the Queen Anne, Doshi said they don’t charge guests an additional cleaning fee.

“We come at it from the angle of still actually being a real kind of hospitality property, a real bed and breakfast,” he said.

“So we don’t charge extra fees on the platform,  just like we don’t to any of our regular customers who would book directly through us or another OTA, like Expedia.”

Airbnb’s growth in the third quarter

Airbnb’s revenue increased to $3.7 billion in the third quarter of 2024 from $3.4 billion in the third quarter of 2023, according to the company’s financial results.

Chesky said the company had 123 millions “nights and experiences booked in their strong third quarter, an 8% increase year-over-year.

Chesky also said last year the company tried to make hosting just as popular as traveling on Airbnb.

The company surpassed 8 million active listings and removed over 300,000 listings that failed to meet guests’ expectations.

Chesky said the company was preparing to expand beyond Airbnb’s core business but when the pandemic hit, they had to cut back resources.

“We got focused, went back to our roots, and really focused on rebuilding our platform, becoming lean, becoming a functional organization, and we now have essentially the same amount of employees as before the pandemic,” Chesky said in an August earnings call.

“We’re now beginning to prepare the next chapter of Airbnb, and I want Airbnb to be one of the most important companies of our generation.”

The San Francisco-based company was founded in 2007 when two hosts, Chesky and his friend Joe Gebbia, welcomed three guests to their San Francisco home. Airbnb has since grown to over 5 million hosts who have welcomed over 2 billion guest in almost every country across the globe. Airbnb is in 220 countries and regions.