For me, it’s pretty simple.
All of your preparation costs; cleaning, laundry, maintenance, hospitality, etc. are paid for in the first day or two of a stay. Therefore, the longer the stay, the more profitable it should be.
I don’t charge a cleaning fee or any other fees.
However, my market is probably unique in some ways, as we are lucky to be located in an extremely popular tourist destination that has no challenge attracting bookings year round. If we need the place to be free - to conduct upgrades or maintenance or whatever - we have to block it or else it will be booked. It’s that productive.
We have a different tourist demographic in summer vs. winter, so we have a different model in those seasons.
Summer is 7 night minimum stay, single price for the entire villa (sleeps 8 pax). This model is for the vacation set. Families, multiple families, professional groups, etc. It’s deliberately priced to be unattractive to party animals or other irresponsible character of guest, who generally search for whatever is cheapest rather than what they find most attractive. It’s not a guarantee, but we have precious few problems with guests. And in summer, it WILL be booked at full price, guaranteed. Usually summer is fully booked before the end of April.
Winter is 5 night minimum stay, with a rather pricey base price for the first 2 pax, and a more reasonable per-person price for every additional pax. This model inherently attracts the winter demographic, which is golfers, cyclists, equestrians, and people just wanting to get away from the cold north - often working remotely. We get a surprising number of older couples, usually golf couples for 2-4 week bookings - because they can’t golf in the snow. They like having a whole house to themselves. It feels like home. And they like having the space and bedrooms to accommodate friends and family that come to stay for a few days here and there. But they aren’t all long term guests in winter. We get a lot that are seeking a quick getaway from the cold north, and they tend to be more last minute (30 days or less advance). Hence the 5 day minimum instead of 7.
So, in my case, a minimum stay is very important. But back to the bottom line: All of your prep costs are paid for with the first day’s revenue, so I’d think that for many hosts, at least a 3 day minimum would be a wise decision - if your offerings and market can support that.