Claiming a fee increase is an "ethical issue" is just nonsense.  Businesses raise prices all the time, that's what they do when they can, just the same as I raise my rental rates every year if I can.  It's how businesses stay ahead of their always rising expenses.  If they didn't announce the fee increase ahead of time and just imposed it... that would be an unethical practice.  But just raising it... it's the way capitalism works, you charge what you can for what you're offering and your customers are free to accept your price or find/fund an alternative.

My cleaning fee is not a pass-thru, because I charge more and use part of it to self-insure accidental damage coverage.  Or if there's not enough accidental damage, I made a few dollars more per stay.  I don't charge an "administration fee" or a "pool heating fee", although some of my competitors do.  That's their marketing model, not mine, but I can also see the validity in it if it brings them more money during the year.

As for why not to sell on price: because you can't lower your price enough and it's a hard number that guests can complain about.  Always better to sell on the value your home brings to the vacation, that way you can charge what you want as long as you can explain the value in the guest paying more.  For example, I have amazingly comfortable beds.  Having spent many bad vacation nights on uncomfortable beds, I know that my guests see the value in having a really wonderful bed experience.  So I sell on that.  Not on price.  Another example: my guests are families with small kids, so I stock the home with books, games, video games, DVDs, anything to keep the kids occupied while the parents get a little "nap time" (wink wink).  Again, that's a value I can sell the guest on and I can charge more because much of my competition offer nothing to keep the kids occupied.  I raised my rates for this year both for every single weekend and for high seasons.  In 2020, I'm raising them $5/night pretty much throughout the year, low season or high.  And I made $4K per home more this year compared to last year with about the same number of nights booked.  I'm priced a bit above the mid-point of my market according to MarketMaker, and that's about where I want to be overall, because that's the level of value I'm offering.

But back to math: you're only booking $22K per year, so that says to me that it's highly seasonal, so you need to maximize high season by being nearer the high end of the price range than the mid-point.  So you need to figure out what value you (can) bring to the guests' vacation that will justify that price.  If you don't have one, that's something you can address with some inexpensive purchases or process changes if you focus on what your guests might want that you aren't offering.

What's your value proposition for guests?