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