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[00:00:00] Sarah: ​Hello, listeners. Welcome back for another great week. My name is Sarah Karakaian.

[00:00:08] Annette: I am Annette Grant. And together we’re–

[00:00:10] Both Annette & Sarah: Thanks for Visiting.

[00:00:11] Sarah: And this is the–

[00:00:12] Both Annette & Sarah: Hosting Hotline.

[00:00:13] Sarah: And it is Money Making May. We partnered with PriceLabs for the entire month of May so we can talk about pricing. We’ve got podcast episodes. We’ve got Instagram Lives. We’re going to do a free workshop. We’re going to talk all about dynamic pricing and what it is like to use PriceLabs to help you. We are independent hosts. We are small, but we are mighty, and our pricing can absolutely be on point.

[00:00:41] Annette: And what we see with a lot of independent hosts is that they’re undervaluing their nightly rate. We’re here to empower you host with dynamic pricing to make sure that you are pricing properly and you’re bringing so much value to your guest. We want to make sure that that nightly rate is reflective of the value that you are bringing to the marketplace and bringing to your guest.

[00:01:05] Sarah: And today we have a question from Angela who is hip to our May series about pricing, and she’s got one for her business.

[00:01:16] Questions: Hi, Annette and Sarah. This is Angela from Lazy Pines Cabins, a longtime listener and a raving fan of your show. I have a revenue question for your May series. One of my properties has about a 60% direct booking, and I’m trying to figure out the best way to adjust my pricing so that my net earnings on a direct booking is slightly more than if they had booked through a third-party platform.

[00:01:37] So for example, right now, if I get an Airbnb booking, I pay the 3% commission to Airbnb. And if I get a direct booking, I pay a 3% commission to Stripe in credit card fees. So basically, I net the same either way. It’s only the guest that saves money by booking direct. I know I can add a booking fee for direct bookings that would increase my bottom line, but I think a long list of fees is a turnoff for guests.

[00:02:04] So they’d be paying the fees for taxes, plus a cleaning fee, and now a direct booking fee. I’m just curious what’s worked for you and what percentage do you add, if any, to your direct bookings so that you’re netting more? That’s it. I really appreciate you sharing your strategy with us.

[00:02:18] Sarah: Angela, thank you so much for calling in and sharing your pricing question with us. This is a great question. While we want to answer it, it may not be the answer that you wanted to hear. But Angela, as a longtime listener, you know that we can give tough love sometimes, and so we want you to shift the way you’re thinking about “netting more”.

[00:02:40] Annette: Into that, there is an invaluable amount of value to this customer because you are not the– a lot of businesses, there’s a cost to acquire the customer, which you have this direct booking, which, cheers.

[00:02:57] Sarah: Yeah, 60% is incredible. Angela.

[00:02:59] Annette: And we agree, adding on that direct booking fee is definitely, we think, going to deter your guest. It’s going to leave a bad taste in their mouth. They’re not going to understand why is it actually costing more to book direct with you than it would be on the OTA. So right there, we are going to say, we do not encourage you padding more fees into your pricing.

[00:03:22] Sarah: I can also invite you to enjoy that 3% commission with Airbnb, Angela, because it will change. It will increase. You are one of the last hosts who are enjoying that low commission. They just switched. And actually, not all of our properties that we manage. They switched most of our properties in our portfolio to 15% last October without warning. One of my owners still enjoys it. Her properties still enjoy the 3%, but that will increase.

[00:03:50] And so very soon, they’re going to do the job for you because they’re going to increase it, whether it’s 12%, 15%. But like Annette said, you know appreciation in a home? You are adding so much value to your business by having that low CAC, that low cost to acquire your customers. Because the data that you’re collecting from them, keeping into your business, remarketing to them, and asking them for their referrals to Lazy Pines is almost invaluable.

[00:04:24] There is value there, and you can actually calculate it. And then also, with the time that you’re going to save, not splitting hairs on trying to net more from your direct bookings and thinking of it in that frame of mind, and we are going to highlight PriceLabs here, but you could do this probably with any dynamic pricing software.

[00:04:42] But we prefer and know PriceLabs. We’ve been using them for years in our business. They have some really cool reports. One is their pacing report, which you can pull very quickly, and you can compare against your past pricing and the market, which is a really great way to make sure, Angela, that you are priced appropriately, and that you are taking a majority of the market share for Lazy Pines, and you are outpacing your competitors because you have great customer service. You have great amenities. You have a great experience when they come stay with you. 

[00:05:16] You can also pull the KPI and historic reports that PriceLabs offers, and those are insights on your portfolio performance. There’s no more feeling like you’re priced appropriately, or you feel like your occupancy is probably where it should be. These reports will tell you. And if you are not, that’s okay.

[00:05:35] You get to use all the data that price PriceLabs gathers for you from the marketplace, from other short-term rentals, from the hotels, and compare it to where you sit and making sure that you are making the most money, period, whether it’s direct booking or via the OTAs.

[00:05:52] You’ve already mastered getting the direct bookings and getting them to 60%, and I’m really hoping that you’re saving all those email addresses, names, phone numbers of these guests that you can remarket to them and ask them for referrals so that Lazy Pines, the business, increases in value and has that higher net that you’re looking for.

[00:06:12] Annette: Also, Angela, I’m checking out your website. There’s some opportunity for you too. I’m pretty sure you are pet-friendly in all of your places, and that’s an opportunity I would see, just checking on what’s your pet pricing currently? How many pets are you allowing? A daily fee, is it included? 

[00:06:31] There’s some opportunity, I think, there when people are bringing their beloved four-legged friends to your property. We see a lot of hosts that are undercharging for that extreme luxury that they are bringing to their guests there.

[00:06:44] And then going back to what Sarah was saying on the pacing reports, there’s another place inside of PriceLabs, which is the Group Level Customizations, and that’s for you to really check out your pricing when there are city events going on. So looking at your last year, what you charged during those city events, and making sure, obviously, there’s more demand each year that those events take place, and if you can also maximize your revenue during those times.

[00:07:11] One thing too, everyone, this is brand new. Everyone, AI is all the buzz, and PriceLabs is now integrating AI inside their platform to help all of us understand all of the charts that are inside PriceLabs that can seem overwhelming for us to review. But the AI is now helping you just with easy to understand, breaking it down into sentences, what those reports are trying to tell us and trying to help us with.

[00:07:39] And what’s great is that’s already inside of PriceLabs. That’s not something additional that you have to pay for. So we’re encouraging. And the AI inside there is going to get better with time. So that’s an exciting thing, Angela, that you can take a look at.

[00:07:52] Sarah: Angela, thank you so much for calling in and asking us your pricing question. Everyone, if you’re traveling to New Mexico, Texas, definitely check out Lazy Pines Cabins. She’s at lazypinesnm.com, like newmexico.com. Check her out. She’s crushing it. These cabins are amazing. And then also, please, if you are not yet using dynamic pricing, or if you’re using a dynamic pricing software that isn’t PriceLabs and you’re not optimizing it, you don’t know how to use it, come join us with PriceLabs all month long.

[00:08:21] They’re going to join us on Instagram. We’re going to do a free workshop to talk about dynamic pricing, and they are offering a 30-day free trial to all of our listeners. They won’t even ask for your credit card. You can literally just try it for 30 days. Check out these reports. Check out dynamic pricing.

[00:08:34] Check out their market research, and you will get a free market dashboard and revenue estimator once you add your listing. So it’s free data all month long. We have a link in our bio where you can go and check out everything that we’re doing with PriceLabs here in Money Making May. But with that, I am Sarah Karakaian.

[00:08:55] Annette: I am Annette Grant. And together we are–

[00:08:55] Both Annette & Sarah: Thanks for Visiting.

[00:08:55] Sarah: Talk to you next time.