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254. Hosting Hotline: How Should I Price my Parent-Child Listing? · Thanks For Visiting

• 0:00
  Sarah: Hello.
• 0:00
  Welcome back for another great episode.
• 0:01
  My name is Sarah Karakaian.
• 0:03
  Annette: I'm Annette Grant, and together we are--
• 0:04
  Both Annette & Sarah: Thanks for Visiting.
• 0:05
  Sarah: And this is the--
• 0:06
  Both Annette & Sarah: Hosting Hotline.
• 0:07
  Sarah: Never gets old.
• 0:08
  All right, we have a question today about parent-child listings.
• 0:12
  Questions: Hi, my name is Angela, and I've listened to all of your podcasts and
• 0:16
  YouTube episodes on parent listings, and I would love if you could dig deeper into
• 0:21
  the pricing strategy piece specifically.
• 0:24
  I'm about to close on a property that has two cabins, a three-bedroom and
• 0:28
  a one-bedroom cabin, and I plan to set them up as parent-child listings.
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  And here are my three specific questions.
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  One, do I price the parent listing at the same price as the two child
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  listings combined, or should I increase the price of the parent
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  listings since it sleeps more?
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  Second question, should I overprice the two child listings further
• 0:51
  out to encourage people to book the parent listings first?
• 0:55
  Third question, is there ever a good reason to do mostly flat pricing versus
• 1:00
  dynamic pricing and just adjust for weekends, weekdays, and holidays?
• 1:06
  One reason I'm considering this is my direct competitor that has
• 1:09
  a very similar property, does one set price for everything.
• 1:15
  And with my three listings, it seems like it could get a little bit complicated to
• 1:20
  have them all set up on dynamic pricing.
• 1:22
  Thank you for your time, and, uh, my email address is info@lazypinesnm.com, and
• 1:30
  my Instagram handle is @lazy_pines_ nm.
• 1:38
  Sarah: Such a good question, uh, questions.
• 1:41
  Annette: No, but like how she was like three specific questions.
• 1:44
  Bring it.
• 1:46
  Sarah: These are good.
• 1:46
  Okay so--
• 1:46
  Annette: Let's do it.
• 1:47
  Sarah: First of all, for anyone who doesn't know what a parent-child
• 1:49
  listing is-- do you want to update everybody just in case?
• 1:53
  Annette: Yeah.
• 1:53
  It's when two houses give birth to a baby, a tiny home.
• 1:58
  Sorry, everyone.
• 1:59
  I got jokes.
• 2:02
  Sarah: A parent-child listing is when you have a property, and
• 2:04
  it doesn't have to necessarily be one property under one roof.
• 2:09
  We've done it before.
• 2:10
  We had multiple properties on one parcel.
• 2:13
  But for us, it started with one house.
• 2:15
  It was really big.
• 2:16
  We're a metro market, so it was hard to sell the big house during the week.
• 2:19
  So we ended up locking off the two third floor bedrooms and
• 2:23
  selling the house as two products.
• 2:25
  If you think of it as products, it sometimes helps understand it.
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  A four-bedroom product versus a two-bedroom product.
• 2:31
  And it really helped us fill in our weekdays.
• 2:33
  Annette: So bringing it back to that.
• 2:35
  Sarah: We also had a property that had a giant Victorian home, had
• 2:38
  a beautiful basement with 11 foot ceilings, and it had a carriage house.
• 2:42
  And so you could sell all of those as one, and then you could have the
• 2:46
  carriage house, the basement, and the main home, all three separate.
• 2:49
  So there's a lot of fun stuff that you can do.
• 2:51
  The key here for the guest experience is to be incredibly clear about what
• 2:56
  they are buying when they buy it on the OTA or direct booking site.
• 3:00
  Annette: I'm actually going to go through these questions backwards.
• 3:03
  Sarah: Yes.
• 3:05
  Annette: The third one first, talking about the competition.
• 3:07
  Sarah: Yes.
• 3:07
  Annette: Everyone, please be aware of your competition, but you have
• 3:12
  no idea why the competition is pricing, if they have strategy
• 3:19
  behind it, who is in charge of that.
• 3:21
  So I want to warn everyone to, yes, be aware of your competition, but that
• 3:29
  is why we like using dynamic pricing softwares, which will help you clear
• 3:34
  up that and data over drama there.
• 3:36
  So I just want to offer that, just speaking about this is
• 3:39
  what my competition does.
• 3:41
  You need to do what's best for your business.
• 3:42
  And let's dial back from there.
• 3:44
  Sarah: I do want to clarify, not clarify, but offer my opinion to the caller of
• 3:49
  doing what she called a flat rate for all three of her properties, to me
• 3:53
  would be a lot more work because she was saying weekday, weekend, and holidays.
• 3:58
  But those are going to fluctuate over time, then you're going to
• 4:00
  go in there and change them all.
• 4:01
  With dynamic pricing, you set up a strategy, the software does a lot of the
• 4:06
  work, and then you go in there and tweak.
• 4:08
  To me, that's a much heavier lift and I guarantee you, you will make more money.
• 4:14
  It will be worth your time to do it.
• 4:17
  It's proven.
• 4:18
  Annette: Okay.
• 4:19
  And so the first question, I think, because there were three
• 4:23
  questions, talking about if she should price them underprice.
• 4:28
  Sarah: Yeah.
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  The question was like, in relation from the child to the
• 4:31
  parent, how should she price?
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  And it has nothing to do with the relation of the property.
• 4:37
  Let's just take it for example, the larger offer, the parent listing--
• 4:40
  Annette: As one product
• 4:41
  Sarah: As one product, and that should be priced according to your market.
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  That should be priced according to what amenities you're offering your guest.
• 4:48
  That should be priced according to, yeah, what you can get in the
• 4:53
  marketplace, not-- and the caller didn't ask this question, but it's
• 4:57
  happening a lot in our membership.
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  We're having a lot of pricing questions around, well, my mortgage
• 5:00
  is this, so I need to get this.
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  And that's where those decisions need to be made when you're buying the home.
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  They always say, you make your money when you buy.
• 5:08
  Annette: Mm-hmm.
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  Sarah: It's incredibly true because to reverse engineer and to make something
• 5:12
  happen that, in some cases, just can't, and you go upside down, or you
• 5:18
  set your firm at this price and no one books, then we've got a problem.
• 5:22
  But I also want for this whole parent-child thing, don't think of it as
• 5:25
  child versus parent or how they should relate to one another in terms of pricing.
• 5:29
  They are different products.
• 5:30
  Annette: And please keep in mind, your consumer, they might not
• 5:35
  be aware, they most likely are--
• 5:37
  Sarah: No, they're not.
• 5:38
  Annette: Not going to be aware that you have two separate products.
• 5:41
  Because when they're going into the online travel agent, AKA Airbnb or
• 5:47
  Vrbo, they are putting in what they are looking for, and your listing is going
• 5:51
  to show up in either or whichever number of guests that they're putting in.
• 5:56
  So your potential guest is not going to see that, oh, this parent listing is a
• 6:03
  $1,000 a night and the child is only 250.
• 6:07
  They're not going to see that.
• 6:08
  They're not going to know that.
• 6:09
  So they are going to be looking at your products, your two products
• 6:13
  independently in the marketplace.
• 6:15
  So you need to price both of those according to what the market dictates.
• 6:20
  Sarah: Yeah.
• 6:20
  So I hope that helps to not think of it in relation, but to
• 6:23
  think about them as different.
• 6:24
  Annette: Separate products.
• 6:25
  Sarah: Yes.
• 6:25
  Annette: Completely separate products.
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  Completely separate competition.
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  Completely separate pricing, and potentially completely different consumers
• 6:34
  that are booking different stays.
• 6:36
  Sarah: But that's what makes it so awesome because it diversifies.
• 6:39
  Annette: Yeah.
• 6:39
  Think about what we just said.
• 6:40
  Now you have multiple products on the market and instead of 365 days
• 6:45
  a year, you're getting 365 times 2.
• 6:49
  Sarah: Sort of.
• 6:50
  Annette: Yeah.
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  AD MARKER
• 6:51
  Annette: Okay.
• 6:51
  Her last question.
• 6:52
  Yeah.
• 6:52
  Sarah: The middle question.
• 6:53
  Yeah.
• 6:53
  Annette: Or her middle, the last one we're going to answer.
• 6:55
  Sarah: Yeah.
• 6:55
  It was strategy on when to open up availability for the parent
• 6:59
  versus the child listings.
• 7:01
  Now, this might vary in your market.
• 7:03
  There might be something that, in my opinion or in my advice of
• 7:07
  what we do, you might be like, well, here's this other strategy.
• 7:11
  So just take this with a grain of salt.
• 7:12
  For our metro market, we take what our booking window is for each product,
• 7:18
  and then we get strategic because we want the larger product to be booked.
• 7:22
  We will make more money with that larger home being booked.
• 7:25
  So we don't even offer the child portion of that product further
• 7:31
  out outside of our booking window.
• 7:32
  So it's not even an option.
• 7:33
  And then we figure out, okay, so for us, the weekdays are
• 7:36
  hardest to book the larger home.
• 7:38
  Then we trickle in the two-bedroom option during the week.
• 7:42
  And only if we get to-- I forget the booking windows we're at
• 7:46
  now, but I think that maybe 14, 17 days, something like that.
• 7:48
  If we're still not booked, then it's like, okay, let them
• 7:51
  all loose, let them all open.
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  Whoever can book it first wins.
• 7:54
  Annette: Put all products out there.
• 7:55
  Sarah: Put them all out there.
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  Just show them our cards.
• 7:57
  So you want to think of it like that.
• 7:58
  You don't have to offer all of your options always.
• 8:03
  And this is, again, where dynamic pricing will help you because you
• 8:06
  can set up your larger property to be available to book, whatever it is
• 8:10
  for your market, 3, 6, 9 months out.
• 8:13
  But your smaller product maybe isn't available until three months out, and only
• 8:16
  on Monday through Thursday nights until a certain time, then you can open it up.
• 8:22
  It gets fun.
• 8:23
  Annette: That's, I think, our last thing that we want to offer is you're not
• 8:27
  going to crush it right out of the gate.
• 8:28
  There's going to be some learning to it, but make it fun.
• 8:30
  Make it a game.
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  Make revenue management a game.
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  Make it fun.
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  Look at what you did last year or last month, this month.
• 8:37
  Just be you and always be testing.
• 8:39
  Always be testing things.
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  And if you've got people booking, especially the whole property, if
• 8:43
  that's your goal, make sure that you're collecting information and asking them
• 8:47
  to come back so it gets easier and easier each year, and you have less and
• 8:52
  less open dates when the year starts.
• 8:54
  Sarah: We'll also help you all out and drop our two options for
• 8:59
  dynamic pricing in our show notes.
• 9:00
  They're both Pricelabs and Wheelhouse.
• 9:03
  Annette: And there's both introductory offers there.
• 9:06
  Sarah: Yeah.
• 9:06
  I forget who said it.
• 9:07
  Was it Andrew on our interview with him a few weeks ago?
• 9:09
  Andrew Kitchell's the CEO of Wheelhouse.
• 9:11
  I don't know if it was our revenue manager, Colleen.
• 9:13
  Someone said that someone said this, that there's revenue management
• 9:16
  and there's also revenue strategy, and they're two different things.
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  So you have to put on two different hats when you're looking at managing of your
• 9:24
  revenue, and then also the strategy.
• 9:27
  So forecasting, going back to your historicals, and getting that
• 9:30
  strategy together for yourself.
• 9:32
  So definitely taking notes, keeping track, knowing your year-over-year
• 9:37
  for all the products, and when you opened up these doors, how much
• 9:39
  money was on your books this time last year for the next three months.
• 9:43
  And see when you can beat your goals and all that fun stuff.
• 9:46
  The more you just take copious notes and think of both strategy
• 9:50
  and management as two different jobs, you'll have a lot of success.
• 9:54
  All right.
• 9:55
  If you want your question answered here on our Hosting Hotline on
• 9:58
  Tuesdays on the podcast, all you have to do is go to thanksforvisiting me.
• 10:02
  In the upper right-hand corner is a big red button that says "Ask
• 10:04
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• 10:07
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• 10:09
  And if it's really good, we'll answer it here in the pod, and you
• 10:12
  can help so many other hosts get answers to their questions as well.
• 10:16
  With that, I'm Sarah Karakaian.
• 10:17
  Annette: I'm Annette Grant, and together we are--
• 10:19
  Both Annette & Sarah: Thanks for Visiting.
• 10:19
  Sarah: Talk to you next time.