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Xtra Guest Fee Amount ?

Replies: 4 - Pages: 1 - Last Reply: May 4, 2020 12:02 AM by: Chris L
scott d
Registered: 4/4/20
Xtra Guest Fee Amount ?

How much are you all charging per guest over X on your properties ? I'm going to experiment a bit. I'm starting with a base rate for 2 people then $ 8/head/night and see how that works covering my extra wear/tear/cleaning/etc....

Ellen E
Registered: 2/5/20
Re: Xtra Guest Fee Amount ?

I charge $35/person/night for extra people. I have not gotten push back from it.

Lydia B
Registered: 5/8/19
Re: Xtra Guest Fee Amount ?

There's a good amount of discussion about this in various social media groups. A number of folks suggest you just figure out how often you have extra people and then calculate that into your base rate. Theory being it's easier on you, guests might lie if they know you're going to charge them more and/or they may not choose your place if they see you're adding more fees. But the beauty of this business is we all get to do it the way we want. :)

Chris L
Registered: 5/17/17
Re: Xtra Guest Fee Amount ?

Personally, I don't charge anything. If my unit can sleep 6, they can book up to 6. I do all my ROI calculations based on the number of nights I expect to rent the property out and the expected rate for those nights (e.g. for a hypothetical 2-bedroom condo in my market: $85 average for 120 nights of off-peak, $140 average for 100 nights of peak). My costs are figured as rounded-off averages per month (e.g. $150 for electric, $50 for water/sewer, $50 for supplies, etc.).

To me, my "cost" to support an extra person is effectively a rounding error. It might cost me 50 cents a day for them to shower. The dishwasher might use an extra 15 cents of electricity for adding a few more plates. Maybe I'll have to get another $50 set of sheets at Sam's Club in 5 months instead of 6. The amount is so trivial that I don't really care whether I have 2 people stay or 6 people stay; I'm just happy my place is occupied and I'm earning $330 on a 3-night stay. Maybe I lose $3 of that to the fact there were a couple extra people in the unit--but honestly, I'd rather earn the $330 than give that group an excuse to not book my unit and book someone else's instead because of the extra guest fee.

(One caveat: my housekeeping service charges me a flat fee per cleaning based on the size of the property. If I paid hourly, or by group size, and larger groups cost me more to clean, I would likely have a different view of this topic. It is true that larger groups do tend to make my housekeepers have to work a little longer, but so far they have absorbed the cost and have not indicated anything about raising rates. This arrangement is pretty standard in my market.)

Now, that said, I fully support the idea that you should charge what the market will bear. If the going rate in your area is $15 per person, charge it! No sense giving away free money. Or slightly undercut your competitors and advertise yourself as cheaper for large groups. But if your competitors don't charge for extra guests, I certainly wouldn't charge for extra guests, either. The cost is inconsequential and you don't want to lose business over it.

A lot of times, questions like these really are market-specific. For example, in my case, I haven't seen any widespread adoption of extra guest fees here in my market, so I couldn't get away with it even if I wanted to. And even though I've heard stories from other owners around the country about charging $100 pet fees or $25 per night pet fees, I can only get away with charging a flat $25 one-time charge because that's all everybody else in my market charges. I did try raising the pet fee once to see if I could get any extra revenue, and what I found is that my pet fee revenue dropped, indicating fewer guests with dogs were booking (and actually my overall occupancy rate dipped slightly, too, because the pet-friendly listing really helps me boost off-season bookings). It's thus probably better to study your own competitors rather than ask questions like this here, because we're not in your market. Or experiment and see what happens to occupancy and revenue--just consider probably _not_ making any major negative adjustments during COVID-19, because your numbers will be skewed by the very random data that the virus is introducing into travel patterns, and you also want to do whatever you can to make your property as attractive as possible to guests and stand out above your competitors.

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