Monetizing hacks for Airbnb & STR Hosts Series- Part 2: Earning more from add ons

This is part of a series for Monetizing hacks for Airbnb & STR Hosts. Parts 3 & 4 will be released in the coming weeks. You can read the introduction to this series here and part 1 here.

This series is all about looking at ways to discover the hidden money in your hosting business. Think of it like finding money underneath your sofa cushions. The way you are presenting your listing, managing your calendar, charging for additional services or streamlining your costs could mean that you are leaving money on the table or eating into your margins. I can help you with this- if you want an audit of your listing contact me here.

In this next part of the series, I will dig into many of the ways you can monetize different parts of your business – cross-selling, upselling etc. These are upgrades and add ons to the simple nightly rate model that I discussed in Part 1.

Listing additional services as optional upgrades

Your local knowledge and services are a valuable resource to your guests who are possibly not local or even perhaps international. Listing out a range of local services with a price list will spark ideas with your guests as to possible upgrades. 

Many guests will appreciate that you are able to enhance their stay with your local expertise. Of course, your guests might be amazing independent planners and not need support. But it has been my experience that most guests are grateful for the additional information. 

As a hosting tool, if you have a price list of upgrade services, then it is clear about your boundaries and what is included in the base pricing. You can avoid uncomfortable conversations or denials of service as well as disappointing your guests. But if you are like me and you are keen to be of service, you reduce danger of the people pleasing trap.

For your guests, they will have a clear understanding of the costs of upgrades or additional services and can decide for themselves to buy or not.

Great service is all about transparency and managing expectations – yours and your guests.

The Soft Sell – “you want fries with that?”

The psychology behind this is fairly standard and you will see this selling in every type of business. This is called “Cross-selling”. Google it and you will head down the marketing rabbit hole.

The guests (customers) already know, like and trust you enough to make the booking. They are in your orbit, they are in the spending zone, their wallets have already been opened for you once before. So they would rather spend money (that they are going to spend anyway) with a person they trust. 

Don’t forget the FOMO factor too. (Fear Of Missing Out= FOMO) Your guests are traveling away from their usual home. They want to experience everything that they can and don’t want to miss out on any adventures or deals or local highlights. So, do them a favour and list them all out and let them choose. 

Obviously, the types of services and upgrades that you provide will depend on you, your location, the types of guests you host and their needs. But you should include premium and basic options and middle of the road. 

Some examples of ways you can offer additional paid services include:

• Breakfast foods or other grocery delivery
• Personal shopping for local specialities
• Babysitting
• Mid-stay cleaning (on long stays)
• Additional linens or amenities above your baseline inclusions (But don’t be too cheap here as guests will feel the squeeze)
• Late check out/early check in
• Concierge services like ordering tickets or arranging tours
• Rental of equipment (eg kayaks, SUP’s, surfboards, snow toys)
• Language translation services

Putting all of this in a well written price list and having this in the welcome book or advance email is the best way to let guests know the options. No need to be pushy – they will take you up on the offer or not. Let the FOMO do the sales work for you. 

I wrote a full blog post on this here. It is one of my most popular posts to date. 

A note here though, don’t be cheap on your verbal support, communications and advice. Be generous with your hospitality, friendly welcome and make sure your listing has an abundance of wonderful free basic amenities – coffee, tea, toilet paper etc. You don’t want to look cheap on the fundamentals.

Premium Upgrades – The “Upsell”

This will again depend on your listing, your hosting style and your ideal guest, but I suggest that you have at least one very highly priced item in your list of possible upgrades. This should be priced very high and be luxurious. Even if you wouldn’t buy this for yourself and you only get one or two guests a year who take you up on the offer, the dangle of a luxurious shiny object sparks imagination and joy in your guests.

Sometimes people just want the ability to spoil themselves or a loved one. If you have this an option, then you have the chance that somebody will buy.

If you don’t have anything that guests can purchase, then you have a zero percent chance of a sale.

Tracey Northcott

Some examples of Premiuum Upgrades:

• Private chef
• Artisan amenities/spa pack
• Honeymoon packages
• Private local tours 

Price the offer really high and make it worth your time and effort. The psychology for yourself is that you will go above and beyond when the payoff is substantial. 

To make up a pamphlet with the details of a premium package takes an afternoon of your time. Even if you only sell 1-2 a year, this is still a nice bonus for you. If you don’t have any offers to sell, then you will sell exactly zero. 

Cross-selling vs Upselling

The research says that having a very high priced Upsell offer will make the other add-ons (the cross-sells) seem more appealing and guests will likely take you up on these more often. I haven’t tested this myself yet in my hosting business but it is something I want to do very soon.

Don’t just take my word on it:

Cross-selling and upselling are similar in that they both focus on providing additional value to customers, instead of limiting them to already-encountered products. In both cases, the business objective is to increase order value inform customers about additional product options they may not already know about. The key to success in both is to truly understand what your customers value and then responding with products and corresponding features that truly meet those needs.

Big Commerce Website

Cleaning fees

Are you charging guests a fair and reasonable cleaning fee? Your ideal guest will not be questioning that cleaning (and now sanitizing) is not free. I have worked with hosting clients who at first, were not charging any fees at all and simply paying cleaners out of their booking revenues.

My main suggestion when outsourcing is to pay your cleaning and turnaround staff well. These wonderful humans will make or break your business so find great people, nurture them and give them the tools and support to excel. 

Work out a good flat rate per property that you will pay out to the cleaning team. Do not think this is a cost that you can minimize or avoid. Offer an above market rate to your team. Then build in a 10-15% service buffer for admin charges. This is to cover your time and effort in the administration of this essential part of the business.  

The total charge goes onto the booking fees as a one time charge for each booking. This small additional service fee for you does add up over time and ensures that managing the calendars and the purchase of any consumables is not eating into your margins. So not a huge income source, having an administration charge means that you are not adding to your costs.

Or even if you are doing the cleaning yourself, put a value on your time and effort. You don’t expect others to work for free and neither should you. 

[Side note: Keep in mind that if the cleaning team are contractors then there shouldn’t be any payroll taxes but then if they are not full time employees, then there will not be any government support should they need to be furloughed. Please consult your local labour laws and regulations on staff. I’ll cover taxes in the next post of this series.] 

Tipping

This is a subject that has been discussed in the hosting communities lately. It does polarize the discussions.

Here are my thoughts:

If you are in the USA where tipping culture is well established and understood, an solution might be for a nice handwritten note on an envelope inside the house from your cleaning staff. Something like, “Hi, my name is ….. I am responsible for ensuring the house is comfortable for you to enjoy.”

However, for me in my hosting business, I would never ask for tips. I am not from the US. Most of my guests are not either. Tipping is not a feature of my daily life. To be honest, whenever I am in the US, I feel quite intimidated about where, when and how much to tip. If it was in a short term rental, I would feel quite strange about this.

But hosts need to do whatever is best for their hosting style, their businesses and their guests. Get to know your ideal guests. Discover their expectations and feelings and that should be the guide for your best practices.

So if tipping is something you and your guests would be comfortable with, then figure out a way for it to work for you.

[Side note: If you do have a tipping option, make sure the staff receive this money. I don’t know why I felt the need to say that but I am passionate about ensuring that the support team are not exploited. My team are like family in my business. I do feel very protective of them and they do an incredible job in return. Yes this series of posts is all about monetization for your business but I felt compelled to put in this note.]

So even I am conflicted about the tipping option. It really does bring up a lot of feelings. I’d love to hear your thoughts on this subject. Drop me a note in the comments to hear your opinions on the subject of tipping.

Empty Or Orphan days

An old hotel saying is that if you can never recover the cost of an unsold room. It is better to get something for it than nothing. You will never have the day back again. So you can get creative to try to fill any orphan days in your calendar. If you are doing things right, your main margins are coming from your bookings at your standard rack rate. Then the extra profits from the seasonal rates. Have good margins built in for your average expected occupancy. But if you find empty days, there are a few strategies to fill these up. Icing on the cake if you will.

• Contact guests on either side and offer them a discount to extend their stay. They might be grateful for the opportunity and you have added new revenue to your bottom line without any additional effort. 
• Look at the arrival times of the guests on either side and offer guests an early check in or late check out for a 50% discount on the normal full day rate. Great for people with early/late flight schedules.
• Look for local businesses who have traveling staff during the week and want to stay close to the office if you have slow times on weekdays.
• Local businesses looking for a remote working venue during CoVID so the office isn’t as crowded during the week – especially if you have super fast wifi and desks or a good dining area. 
• Local residents who are wanting a place for home schooling or remote working
• Day events such as photo shoots, or film locations – there are “Space Markets” in most large cities where you can upload your listing for non-overnight stays. This is especially good if you are frequently vacant during the week.

I will do another post soon to cover these ideas in depth. 

If you can see an orphan day coming up, best to communicate with any inquiries that come in and up-sell to them.

At the risk of piling on from the base pricing post last week: 

If you don’t have orphan days, then your standard nightly pricing is too low.

You can earn the same money for less work if you raise your prices to a level where your occupancy drops. This might seem counterintuitive, however, keeping your prices at the top end of your market means that you WILL attract amazing guests who will respect you and your hospitality. This is human psychology at work. If you are providing an amazing experience and the guest has to slightly stretch to enjoy it, they will value you and the experience all the more. 

Don’t be cheap, don’t think cheap and don’t charge cheap prices. You are worth it and by attracting your ideal guests at the top end of their budget you will meet some of the most amazing people who will restore your faith in humanity. 

Stuck on setting the right tone in your guest communications? I’ve got all my best stuff for you to swipe and use in your own business. Take the guess work out and save your time.

Stay tuned for part 3 & 4 of the Monetizing hacks for Airbnb & STR Hosts Series.

_{disclaimer: We may receive a small introduction fee from the vendor. This will not affect any prices that you are charged. But I will only recommend vendors that I know and love and ones that I have used for myself as a customer.}