Latest / Thanks For Visiting / 256. Hosting Hotline: Mastering Dynamic Pricing and Modified Bookings

Transcript

256. Hosting Hotline: Mastering Dynamic Pricing and Modified Bookings · Thanks For Visiting

• 0:00
  Sarah: Hello.
• 0:00
  Welcome back for another great episode.
• 0:01
  My name is Sarah Karakaian.
• 0:02
  Annette: I am 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: We answer your questions here in the show.
• 0:09
  If you go to thanksforvisiting.me, upper right-hand corner is a
• 0:12
  red button that says, "Ask TFV."
• 0:13
  You can ask your questions about short-term rental or business
• 0:16
  in general, and we are happy to answer them here in the pod.
• 0:18
  We've got a great question today about when guests have
• 0:22
  pushback about price changes.
• 0:26
  Questions: Hey, ladies.
• 0:26
  Love your show.
• 0:27
  Thank you for all your tips and tricks.
• 0:29
  It really helped when we launched our third short-term rental.
• 0:34
  Anyways, my question is about the Andrew Kitchell episode.
• 0:40
  I think I'm saying that right.
• 0:41
  CEO and founder of Wheelhouse.
• 0:42
  Love Wheelhouse.
• 0:43
  It has really done a lot for specifically one of my properties.
• 0:49
  It doesn't work for all of mine, but for that one, it's really great.
• 0:52
  It caught a random day where we would've been offering the house
• 0:56
  for $120, and it bumped it up to 500 plus, and we got a booking.
• 1:01
  Crazy.
• 1:01
  I missed that there was a local event going on, and Wheelhouse got it.
• 1:05
  Anyway, my question is, we often will get guests who will book and then need
• 1:11
  to edit their dates, and after they go to edit their dates, they'll come back and
• 1:15
  say, hey, I was booking it at $200 a night and this extra night is $300 or something
• 1:23
  different than whatever the average rate that Airbnb was displaying was.
• 1:28
  And part of it's because Airbnb does that average thing, and part of it
• 1:33
  is because we have dynamic pricing.
• 1:35
  And it just puts a sour taste, I think, in the guest's mouth for me to say that.
• 1:42
  It feels super impersonal.
• 1:43
  So wondering how you guys approach that.
• 1:47
  Annette: First feeling is we love that you mentioned dynamic pricing,
• 1:52
  and Wheelhouse, and a specific instance, how it worked for you.
• 1:57
  So for everybody out there that's still questioning dynamic pricing, that one
• 2:02
  instance where there was a $400 gap in the nightly rate, that is going to
• 2:07
  happen more often than you even know.
• 2:10
  So there are events going on all the time that you are not going to be
• 2:13
  privy to, that you can't keep up on.
• 2:15
  So let the tech do that for you because those nights add
• 2:19
  up, and they add up quickly.
• 2:21
  That one night can be a big difference maker in your month, in your year, and
• 2:25
  just the overall health of your property.
• 2:28
  And then there were some key words I want to take away from that
• 2:31
  question is, it feels and impersonal.
• 2:35
  Those are all very, um, we're, thinking that.
• 2:38
  I don't know if the guests are--
• 2:38
  Sarah: It's emotional.
• 2:39
  Annette: Yeah.
• 2:39
  If the guests are telling you that, but, um, again, we are hospitality,
• 2:45
  but we are a hospitality business.
• 2:47
  So Sarah, let's take it away with the way to hold space for the guest and
• 2:53
  help them understand dynamic pricing.
• 2:56
  And I will say, thank you the airlines of the world, the other hotels in the world,
• 3:04
  Ubers of the world where they are making it, basically by the minute changing.
• 3:09
  Um, so I think consumers are just learning a lot more about dynamic
• 3:15
  pricing and that prices change.
• 3:17
  And so hopefully those type of apps have helped us make this
• 3:22
  much easier because people do have experience with seeing prices change.
• 3:27
  By the minute with Uber or Lyft, by the hour, by the day with airlines and hotels.
• 3:32
  Sarah: Before we get to the guest's perspective, let's talk
• 3:34
  about the host's perspective.
• 3:35
  And I think a lot of hosts out there, especially who are new to the game
• 3:40
  in the industry, they do feel dirty maybe is the word, or they feel--
• 3:45
  Annette: Icky.
• 3:45
  Sarah: Icky.
• 3:45
  Annette: Yeah.
• 3:45
  She's the said--
• 3:46
  Sarah: She used the word impersonal, and I do understand why you feel that way.
• 3:51
  And I also want to say, just because the airlines and Uber have the dynamic
• 3:55
  pricing, can't we be different?
• 3:56
  We're hospitality.
• 3:57
  But again, I implore you to really make sure you understand your numbers.
• 4:00
  And are you willing to leave money on the table to feel more hospitable
• 4:06
  or more accommodating to your guest?
• 4:09
  And just know how common it is, because it's not like this technology is to
• 4:13
  take money out of people's pockets.
• 4:15
  It's because your property is in more demand in those times,
• 4:19
  which is why the software is helping us price it accordingly.
• 4:22
  So to know that it's rooted in data.
• 4:24
  Annette: And with this script, we're going to give you--
• 4:27
  Sarah: Some ideas on what to say.
• 4:29
  Annette: And at the end of this script, a way to hold space, make it
• 4:33
  feel not so impersonal and icky and still be an extremely hospitable host.
• 4:38
  AD MARKER
• 4:39
  Sarah: All right.
• 4:40
  When you are met with some pushback from a guest who booked their dates--
• 4:46
  and first, I also wanted to-- sorry.
• 4:47
  I know.
• 4:47
  I'm going to get to this.
• 4:48
  But for anyone out there who doesn't understand what they mean by Airbnb
• 4:51
  posting the average rate, they'll do that.
• 4:53
  So what Airbnb will do in almost every OTA and maybe even your direct booking site,
• 4:56
  depending on who you work with, it'll fish for the lowest price you have available.
• 5:01
  So let's say your average nightly rate is 250 bucks, but if you have a random
• 5:05
  Tuesday night that you're willing to sell at 150 bucks, it'll say like--
• 5:10
  it's any other marketing strategies too.
• 5:11
  It'll say, from $150.
• 5:14
  And so a potential guest will say, well, wait, I thought I was $150.
• 5:19
  Well, that's the lowest rate, but that's that Tuesday that no one
• 5:22
  wants to stay at your property.
• 5:23
  And so that is built into not just Airbnb software but a lot of booking software.
• 5:29
  Annette: And something that's built into me as a person, I do want to offer
• 5:33
  this, is that I almost always ask for a discount or a added plus to my stay,
• 5:42
  so please don't feel-- I feel icky if I don't ask for something more.
• 5:47
  So I just want to let everybody know that there are consumers out there
• 5:51
  like me that will ask for things.
• 5:54
  And so it's just part of a strategy that I have, and I gamify things like that.
• 5:59
  So I also want to get some nos from time to time because it means that
• 6:03
  I'm stretching what I'm asking for.
• 6:05
  So let me put that out there too.
• 6:07
  Sarah: Yeah.
• 6:07
  You never know what you're going to get unless you ask.
• 6:09
  So when you are met with a pushback, you want to think of breaking down
• 6:13
  your response into a few segments.
• 6:15
  Annette: Yeah.
• 6:15
  Because somebody's like, wait a minute, I just tried a book, and now it's $300 more.
• 6:20
  Sarah: So first of all, you want to delight them with the fact
• 6:22
  that you are available and you can accommodate their date change.
• 6:25
  Remember, just because they want to change their date doesn't mean that
• 6:28
  your property's going to be available.
• 6:29
  So when it is, you can delight them with your availability, and then you
• 6:34
  can confidently stand with your rates.
• 6:37
  Make sure you reassure with them that you have done the work necessary in
• 6:41
  the background to make sure that your rates are competitive with your market.
• 6:45
  Annette: And if they are competitive, if they go look for
• 6:48
  those dates somewhere else, they'll see, oh, yeah, they're correct.
• 6:52
  Those are exactly right.
• 6:53
  Sarah: And then you want to create urgency to book.
• 6:56
  A lot of us need a deadline to get something done, and there's
• 7:00
  strategic ways that you can do this.
• 7:01
  So they can just make the decision and stay with you because, be honest with
• 7:04
  yourself, they need to stay with you.
• 7:06
  You are the best host in your area.
• 7:09
  Annette: And also they've already done all the research, they've taken
• 7:11
  all the time, so you can create that urgency like, I know you've already
• 7:14
  looked at a lot of different places.
• 7:15
  Sarah: We can assure you we are the best place to stay in our area.
• 7:18
  And then you want to give them a call to action.
• 7:22
  What do they need to do?
• 7:23
  They need to book with you.
• 7:24
  And then you need to thank them for their time and assure them that their
• 7:27
  stay is in the best hands possible.
• 7:29
  Here's an example.
• 7:30
  We've got something written, so if it sounds scripty, it's because it is now.
• 7:34
  "Hi, guest.
• 7:35
  We do have availability for your updated trip dates and would love to host you.
• 7:40
  You are seeing a difference in total cost because the new travel dates are during
• 7:43
  a very busy period in [insert your area].
• 7:46
  We are thrilled to still have the dates open to accommodate you.
• 7:50
  Once you have approved the change, you are all set.
• 7:52
  Thank you so much.
• 7:53
  We are very much looking forward to seeing you."
• 7:56
  Then if you get pushback on your response there, you can do one
• 8:01
  of two things or do both things.
• 8:02
  This first, one first, and then ease into the second one.
• 8:05
  "We are confident in the posted rate.
• 8:07
  We understand that this is no longer working in your budget."
• 8:11
  And you could also decide to say, "But we are happy to extend you a 5% discount
• 8:16
  off the nightly rate because we want you to feel whole in booking with us."
• 8:19
  5% is like, great.
• 8:22
  Especially if you could welcome them back for next year.
• 8:24
  Really help the Annette's of the world feel like they got something extra.
• 8:27
  Annette: Andmake you feel better.
• 8:28
  Feelings are real.
• 8:29
  So making you feel not icky, not impersonal, and feeling like you did hook
• 8:34
  them up with a deal, because you did.
• 8:36
  Sarah: You did.
• 8:37
  Annette: So this is a great question, listeners.
• 8:39
  Use that.
• 8:40
  Don't just cave.
• 8:41
  Know your numbers.
• 8:42
  Like Sarah said, know your numbers in the beginning, and then you'll feel a lot
• 8:45
  more confident in answering this question.
• 8:47
  Sarah: Absolute.
• 8:47
  Of course, there's a train going by right now.
• 8:49
  The train is like, yes, if you hear that.
• 8:51
  Annette: Yeah.
• 8:51
  It's rooting us on.
• 8:53
  Sarah: All right.
• 8:54
  With that, I am Sarah Karakaian.
• 8:56
  Annette: I'm Annette Grant, and together we are--
• 8:57
  Both Annette & Sarah: Thanks for Visiting.
• 8:58
  Sarah: Talk to you next time.