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456. Hosting Hotline

Introduction and Welcome

Sarah Karakaian: [00:00:00] [00:01:00] Hello. Welcome back to another great episode of My name is Sarah Karakaian.

Annette Grant: I’m Annette Grant, and together we are Thanks for Visiting

Sarah Karakaian: and this is the hosting hotline. If you wanna get your hosting questions answered here on the hotline, go to hosting hotline.com. Ask your question just like Penny did, and we will answer it here on the podcast every Tuesday.

We love these episodes. Don’t be shy. Don’t hold back. Go to hosting hotline.com. Ask away. Ask us. We love these questions. It is so fun digging in and helping all of you. So let’s answer Penny’s question.

Listener Question: Luxury Rentals in Hocking Hills

Hosting Hotline Caller: Hello, my name is Penny. We have two luxury rentals in Hocking Hills, Ohio, uh, in the Rockbridge area. One property is a little over 10,000 square feet and has [00:02:00] a, uh, a wing that’s attached to the house with an indoor heated salt water pool that is called Hocking Manor. Our other home, um, sits on the same property, which is the timber frame lodge, and that’s, um. Like 13,000 square feet and has four separate apartments. So I, we have gone round and round with cleaning fees and we were trying to figure out the best way to charge a cleaning fee. Like do we split it, put an amount on their invoice, and then put the rest inside the daily rate? Or do we just put. The whole amount on their invoice. Um, and so we’re not sure what that cost really is and what we should be charging if you had any idea. Thank you. [00:03:00]

Discussing Cleaning Fees and Strategies

Sarah Karakaian: First of all, Penny is not playing around.

Annette Grant: Penny, I got, I got square, I got square footage. Envy. You are right.

Sarah Karakaian: I got, I got Saltwater pool envy. You got some serious square footage. Everyone. If you’re not driving, go to woodland hyphen retreats.com so you can see what we’re talking about. Penny’s not playing. And these are two epic properties. They are in Penny’s defense, unique in their size and in who her avatar is. Mm-hmm. As compared to other, if you don’t know Hocking Hills, Ohio, people go there to camp.

I’m talking like pitch a tent. They also go there to stay in really popular properties like the Cliffs. Or Dunlap Hollows. They have a Insta-Famous A-frame and cave, short-term rental. There’s the box hop. They’re also Insta-famous. And then we’ve got [00:04:00] Woodland Retreats all unique in their own way. And the way that Penny stands out is not just that they’re luxury and she’s got these really cool amenities like the salt, uh, pool, but the size.

Mm-hmm. And who the guest is going to be is a little different, but. Penny.

Market Comparisons and Competitor Analysis

Sarah Karakaian: You can learn some things from these competitors, even though they’re not maybe direct competitors in terms of like. How many people they can accommodate, but in their uniqueness and in their, their rates because they’re charging higher rates ’cause they’re, they stand out in the market. And a lot of people, I used to manage the cliffs and people were flying from the uk. They were flying from Arizona to Ohio to stay at this property. And so they kind of create their own market. And so you’ll be experiencing some of that Penny and you might feel like you don’t have any competitors because you are so unique, but you can still learn things from these other operators in the Hocking Hills [00:05:00] area and even north of us in the Mohican area. And so listeners, we encourage you if you feel like you are unique. And Penny didn’t say any of this in her question, but she, she didn’t give us much to go on in terms of

putting her in the right direction, but we, so we wanted to give her a really full response here, but even if you feel like you’re unique in your market, there are other markets that you can look to that are similar to you in population or drivable destination, et cetera, where you can get information from what they’re doing and what’s working or not working for them.

For them.

Pricing Strategies and Profitability

Annette Grant: And it sounded that, it sounds like you’re getting some questions potentially from guests or future guests on how you’re pricing things out. Here’s the number one thing. We wanna make sure that you’re profitable, Penny. So we have to start with profitability. We have to start with profitability. We also have to start with what are the questions? Are you getting questions? [00:06:00] From your guests about it, because you are saying add it onto the invoice.

So I’m assuming that you’re getting line item questions from your guest about your invoice. And number one, kudos to you also, Penny, because it sounds like you’re getting a lot of direct bookings. That’s why you’re having to invoice your guest. And so my first thing is, is taking the feedback from your guests, how are those questions coming across?

And make sure that we’re answering them properly and really taking into consideration the way it’s viewed. From your guest.

Sarah Karakaian: Right. And that’s what, and Penny, we’re assuming that Penny is getting pushed back, but we’re not sure. ’cause she didn’t say that. She said that she doesn’t know what the cost is.

Annette Grant: And you should know your cost. That’s, that’s our question is like, how, how are you not knowing? What the cost are you cleaning it yourself? Right? Um, and if you are cleaning yourself, that’s where I would get bids from other people in the area to timing yourself on how, what is the, the hourly rate someone cleaning, including the laundry. I do think as host, if you are cleaning [00:07:00] yourself, a lot of times we don’t really take into consideration. What an hourly rate would be, or if we did have to hire that out. So I wanna make sure that you’re not losing, uh, on the cleaning at all.

Sarah Karakaian: Right. Because I can share with you, Penny, that we treat the cleaning fee for us, it’s a pass through expense because we hire vendors and so we charge a similar rate. There’s a little bit of a cushion on it to what the cleaning companies charge us. So for us it’s really a pass through expense, maybe a small margin on it so that we can just at the end of the year, come out pretty much pass through. Mm-hmm. We don’t aim to profit from the cleaning fee. Now there are different hosts with different goals with that if your cleaners are in-house, it is normal to want to make a profit on those cleaning. So if your cleaners Penny are going to be employees. Or part-time employees, you might have a different structure for your fee, but [00:08:00] either way, there are key considerations when setting your cleaning fee. Once you understand what your costs are going to be. Mm-hmm. You wanna understand your market’s expectations. What does the Hocking Hills Traveler Wedding Avatar Wedding Corporate Event, corporate event person, what do they expect to be charged. And are the guests in your area used to a higher cleaning fee or lower ones with more built in nightly rates? What are similar listings charging? This is where Penny, I might look to the big dogs in that market, like I shared with you.

What is the Cliffs doing? What is the box hop doing? What is Dunlap Hollows doing? There’s other really awesome competitors in our area that you can look to. Look at different markets too that are similar to Ohio. You can look at really exceptional properties in Virginia, in Pennsylvania, in Indiana, right?

What are they doing? It’s critical for guest perception and [00:09:00] pricing, competitiveness. And Penny, there’s nothing wrong with calling other event places and just asking. You know, like you can put, you can go on their websites. Do they share what their pricing is? Could you call and, and, and ask and figure out what, what they’re doing in their business?

There are a lot of wedding venues that are larger or corporate venues that are larger that you can poke around and see what they’re doing.

Annette Grant: Mm-hmm. And what’s so great too is this is your business. So you can, if there’s one invoice, you’ve, maybe you, when you were chatting with the potential booker, that was some of their questions.

You could like quote unquote waive the fee, but then bake it into your nightly rate. You know, this is where you can get creative to and just kind of see who you’re who your client is or the, the reservation that you’re trying to book and see how you need to quote unquote play, play the, uh, the cleaning fee there for sure. But I, I think, um, and that’s [00:10:00] where you could get creative and blend those cleaning costs into your nightly rate. ’cause again, we, we just wanna make sure that overall the stay is, is profitable for you.

Practical Solutions and Case Studies

Annette Grant: So here, um, we wanna go into, um, a strategy highlight though from a podcast that we did a while back. And I think this is, this will serve every host listening because there are some markets, and we’ll use her name, she was on it, it was Monique from Price Labs and she actually shared with us a practical solution for her cleaning when her cleaning fee was actually higher than the market rate.

So her she cleaning is very, very important to her, making sure that. Paying her cleaner a fair wage is important and making sure that she’s getting the top notch help. And so her cleaner was actually charging her $150 per clean. I think she has a A-frame there, but the market average, what hosts were charging guests was $120.

So she thought that that was like. Obviously a deterrent [00:11:00] from people booking with her. So what she did is she went ahead and baked part of that cleaning fee into her nightly stay. So she went to the market average, which was $120. So she reduced her cleaning fee, but she still covered it because she added $15 per night to offset those cleaning fees.

’cause her average night stay is two nights. So she needed to make up that $30 spread there. So she added $15 per night to offset. Um, she added that in price labs to recover that $30. Dollar difference. So that’s something that you could look at doing. Penny is figuring out maybe your market average you see is, you know, $400, maybe it’s $250, maybe it’s $300, maybe it’s $400.

How could you just bake in the um, that additional cost on your nightly rate?

Sarah Karakaian: Yeah, and I wanna let you know, Penny, there is so much information and everyone out there, I don’t know if you know this, but you can use Price Labs. Or any, I think all of them probably do this, but we wanna share with you what we know to be true in Price Labs.

You can [00:12:00] go in there and you can see what your competitors are charging in cleaning fee, and you can, yes, you can see it on the OTAs as well, right? If you go to book. But the nice things in Price Lab is they give you a map. You can select who is an actual competitor of yours, and you can create what it’s called, a comp set, and you can see what they’re charging for their cleaning fee and compare. Are they an actual competitor? You know, are they, are they open 24/7/365? Are they most likely using competitive pricing? Okay. If they are, if the yeses to all that and that, and that aligns with what you are doing, then those cleaning fees are the ones that you wanna compare yourselves to. And then you can see if you think your fee is a bit higher than what your competitors are doing, you could do the blended rate practice. Before I move on, I wanna say to you too is Penny. As you’re getting guests to book with you and as you’re getting guests, it’s called like whether you win the lead or you lose the lead somewhere. And if you have a CRM. Right. A customer relationship manager. [00:13:00] I was using a, I’m u I’m doing something similar for like our midterm rental strategy. I’ve got an Asana project, so Asana’s a project management software. You could use a proper CRM if you want. And any lead that comes in, I take copious notes. And if I lose that lead, if they don’t book with me, I then at the end of the month go through where did I lose them in that booking funnel. Why did they not book with me and was pricing, was my cleaning fee, was whatever I require of them to book with me. Was that a deterrent from ’em actually saying yes. And I also compare it to the feedback I get to them during the booking process when I do win them. And then you can kind of zoom out and look at all these comments and find out Penny ’cause, ’cause you didn’t share this with us.

But are you getting pushback? Are you not? Are you not filling your calendar? Are you not generating the revenue you thought you’d be generating? And is it because the way you’re packaging your product and the only way you can really know that is yes to study the market like Annette was just sharing with you, but also study your own leads and your booking process and [00:14:00] your sales process, and you might just need to repackage how you’re presenting it to them. Even the words you’re using maybe. Mm-hmm. Not beyond, whether it’s a line item or not on your invoice, but how you package it, how you’re marketing. It could also be a big factor on how you collect these fees. ’cause regardless, you’re gonna have to be profitable in your business.

You’re gonna have to bring in the revenue necessary to to breathe oxygen into your business. So you’re right. How do you do it? And these, these are different ways you can figure out what’s best for you and your business. Mm-hmm.

Annette Grant: And, and my biggest concern is you just use those words that you don’t know how much it costs. And I wanna make sure that we really get an understanding for what it is costing you. Woodlands retreats, to clean the pro the property per turn.

Sarah Karakaian: Right.

Annette Grant: We really get, we gotta get that. We have to understand that first to understand our pro, our pricing strategy moving forward.

Sarah Karakaian: Yeah, your properties are incredible, Penny and the right guest is going to understand, as long as your [00:15:00] cleaning fees are, are reasonable in terms of your labor costs, the, the materials it takes. Mm-hmm. Uh, it’s all gonna, it’s all gonna work out if you’re getting that right lead into your property.

Final Tips and Dynamic Pricing

Annette Grant: And i, let’s just, this is a little hot tip or pro tip moving forward. I do have a little concern, um, with. Uh, we were combing through your website, Penny, that you kind of have, it looks like a pretty steady weekend rate throughout the year, and I feel like there’s probably some more dynamic pricing going on during holidays, during long weekends, and there might be leaving, you might be leaving some money on the table.

During different peak seasons, because the way I was reading your website is that the weekend rates were static throughout the entire year, which it seems like that those, um, should fluctuate. That those should be more dynamic.

Sarah Karakaian: Yes. Yeah. And we can go, you know, there’s so much we can learn about. Uh, [00:16:00] and I can tell you real quick, Penny, you’ve got four guest reviews right now. We’re on the, the lodge, the, the timber frame lodge. That’s what the four apartments. Everyone listening, I’m on her reviews and she’s got four so far, and, and she breaks the review summary down when it comes to value. She’s got five stars and when you’ve come to cleanliness, you’ve got five stars. There’s more to learn with as more reviews come in. But so far it doesn’t look to me like the way you’re charging your cleaning fee, that there’s any feeling of the value not being there in terms of the, the money you’re charging and the cleanliness component. So with what we know, Penny, I, I just think, think, keep tracking everything and just remember, your pricing can be living and breathing. You can adjust it. Maybe you make a decision now and you go with it for a while. You get a few bookings, you track it all, you lose some leads, you win some leads, review it all and then make adjustments like that’s how you’re gonna find out what works best for your business. [00:17:00]

Annette Grant: Hopefully we’ll come stay with you. We’ll have a corporate, we’re gonna have a corporate retreat with you.

Sarah Karakaian: I was just saying to annette, I was like, wait, we could go down there and work. Let, let’s talk. I wanna swim in that pool.

Annette Grant: Let’s talk.

Sarah Karakaian: With that.

Conclusion and Farewell

Sarah Karakaian: I am Sarah Karakaian.

Annette Grant: I’m Annette Grant, and together we are Thanks for Visiting.