Hello, welcome back to another great episode. My name is Sarah Karakaian.

I'm Annette Grant, and together we are Thanks for Visiting.

Let's start this episode like we do each and every week, and that is celebrating one of you, our amazing listeners who are going on over to strshare.com, sharing everything you can about your short-term rental so we can share you here on the podcast. Annette, who are we sharing this week?

This week it is at Finish Line Properties. And as you can tell by the uh, name, it's plural. They have four properties. Please check them out. And what I love, I wanna shout out immediately, is that when you go to their Instagram account. It takes you straight to their direct booking site.

Nice.

Okay. I love that. And they have, if you don't have four properties, it's okay, even if you have one. But I love this because they have four, so you've got to be able to use all of this digital real estate. So well done there. The other thing I wanna share that I've always just, I think proves so much trust immediately, is you go to when you're on their direct booking site. Right on every page is a personal email address and a phone number. Again, it's not like everybody's calling you, but it just adds a layer of trust there. Alright, every time I see a phone number, anywhere. I just think, hey, they, they're gonna be able to reach out, ask a quick question, get it answered. Uh, Sarah and I were just actually in a sales training yesterday and it really is about speed. When someone wants to buy, they are in that buying mood, that mode. They wanna do it that, so make it easy for the guest to book. We want the least amount of friction, right Sarah?

Yeah. Speaking of friction.

Yeah. Leads them. But again, finish line properties. Check them out because I want you to see how they do their direct booking. And one thing I want you to look at, they have an all black kitchen.

Ooh, let me see.

It is sexy.

Oh, that is good.

I never knew how I'd feel about it, and I like it a lot, so check it out. But yeah. We don't want friction for our guests, so let's take 'em to today's episode.

Yeah, so talking about trust and talking about friction. You think charging extra per guest is making you more money, but in reality it could be the reason you're not getting booked at all. This one setting. It could potentially be the one thing that's killing your conversion rate, and we're finding out that most hosts don't even realize the setting is being used. So today we're gonna break down why per guest pricing is a bad idea and what we think you should do instead, if you want to stay competitive and profitable. All right, let's start with why hosts use this per guest pricing in the first place. The logic, I get it. More guests equal more mess. So hosts add per person fees to cover those costs, but that approach assumes that you're undercharging for your full capacity stays to begin with. So truth, if your pricing only works when you add fees per head, then your base rate. Is too low. So instead of solving the problem, you're just introducing friction at checkout, confusing guests, or just making them mad.

And here's the problem. Guests don't see the per guest fee. They see just the high price because now Airbnb's all in pricing model bundles your per guest fee into that total nightly rate. So you might think your nightly base rate is $200. But the guest ads four extra guests at $25 a night, well, it's showing $300 total, and you look wildly, wildly overpriced next to your competition. And guests don't understand that logic, nor should they. This is not what they're, this is not what they're supposed to be doing when they're looking for their vacation. And so they're just gonna scroll past you. So the result is you are losing bookings and tanking your conversion rate. Without realizing it, and spoiler alert, some of you might be thinking I don't have a per guest fee turned on. We have talked to so many hosts recently helping them with their pricing, and we asked them, why do you have this per guest fee turned on? And they're like, oh my gosh. I thought I had that turned off.

I forgot about it.

I sat forever ago. Please after this video check yourself before you wreck yourself on this one. Okay. So don't think that you might not accidentally have this turned on because the shock that we see and host face when we uncover this for them is enlightening for sure.

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If you sleep 12, but you only price for eight. Yeah, that's a problem. Many hosts list their property as sleeps 12, and they're like braggadocious about it. Right. But then they charge extra beyond six or eight guests. This sends mixed messages to both the guests and the platform. If you don't want large groups, then just simply list lower occupancy. If you do want the large groups, your pricing and your cleaning fee should already reflect that. Okay. Guests expect transparent pricing and extra fees like that. It's just a penalty. It's not a fair charge. You can't have your cake and eat it too. I guess when it comes to sharing that you sleep 12, but then. Get 'em on the back end with this like giant extra cost.

And I, I know what a lot of you are thinking, well, you want to maybe incentivize or reward, right? The folks that only have six or eight, but that's not how this works. For instance, like. I stay at a lot of places by myself. I don't get a discount for one guest, right? Think about that. We don't say, oh, well if you're only one guest, if you have two, right? Then it's double like, and, and so and so on. It keeps going and so on and so on. And so for some reason, when we get to some of those larger amounts, people think, uh, psychologically it's helping the guests. It's not, it, it's, it's like we just said, it's confusing them. It looks like you're penalizing the people that have the larger groups and yeah, if it says you sleep 12, but then I've gotta pay extra for all of them, you are getting that stay off on a rocky, rocky start. And again, we always say you wanna reduce the amount of friction between looker into a booker. Let's continue this conversation. So the booking process, it should never, ever feel like a trap to the guests because when the guests see, you know, they've been filtering. Sleeps 12. They fall in love with your property. They go to checkout and they see these unexpected charges. They're like, what? It does feel like a bait and switch. Okay. And so, they may still even book because you have like captured them and hooked them, but they are starting to lose a little bit of trust and you've gotta make sure that you are on your A game. You don't want any of that trust to deteriorate between the booking to this day and during the day. And if they didn't book with you, then your conversion rate is dropping. And whether it's your direct booking site, whether it's Airbnb or vrbo, everybody notices that behavior and your rankings and your bookings are going to start to suffer, but we have good news for you. We have a better strategy.

All right, so here's what you do instead. Instead of using the per guest fees, I want you to create two listing variations. You have the parent listing. So that's max occupancy, full cleaning fee, and you have the child listing a smaller guest count, reduced cleaning fee, and then a potentially a lower average daily rate. This lets you attract different types of travelers without confusing pricing logic. It also helps guests feel like they're getting value.

And don't be confused because when I bring up this to hosts as a way to make more money and have more options, they think it's having multiple parties. In the house at the same time. That is not what this is.

Oh no.

Okay? That is not what a parent child listing is, so please make sure you check out that video because we have brought this strategy to so many hosts and it has really helped to boost their revenue. And truthfully, here's the deal. Pricing shouldn't feel like a math test. Please put yourself in your guest shoes. It is a big, big decision. They're, they're sorting through a sea of listings. They're probably have, um, some pressure.

If they're from the crew that they're booking for.

They're booking a family vacation, a work trip, all of it that is pressure. Okay? And so we just want, we don't want the guest to, to feel this because they are comparing listings based on what they see first. They see the price. And then if your rate feels padded, it's unclear. If there's hidden costs, seriously, they're just gonna move on. We have to reduce the friction and host who price very clearly cleanly. And last but not least, competitively, win the booking every time. All right, so let's be kind to our future guests. Let's simplify it.

And I'll, I'll, i'm gonna get on your side for a minute. Okay. And I get it. It's like, well then why is the setting there? You know? But here's if we've learned anything from helping, I mean, thousands of hosts at this point is just because the setting's there Doesn't mean you have to use it.

Right.

And truly, if you don't know the why behind you using it, and even if you're kind of like wishy washy, unless you're truly like, I understand the purpose of this. I understand the result of this, or I'm gonna test it. Fine, but that just goes with any piece of software that you are using to run your business. Just because the setting is there doesn't mean you have to use it. So, charging per guest could feel like a win, but it's a slow leak in your strategy, in your booking funnel.

And here's the deal, everyone, please, every episode that you listen to, this is all about testing. So if you're shaking your head right now thinking this isn't gonna work, give it a try. This is what we love about business. It's a giant science experiment. It's all about testing, so give it a try. See if it works for you. Give the parent child a try. We encourage you to always be testing in your business.

Yes.

You never know what one thing could really unlock profitability.

And sometimes it really is a small thing.

Absolutely.

With that, I am Sarah Karakaian.

I'm Annette Grant, and together we are Thanks for Visiting.

Talk to you next time.