Charging More per Guest?

Question

When doing research and scanning the AirBnB listings in my neighborhood, I came across a Superhost listing that charged approx $165/night. I was a little surprised because I was thinking about maxing out at $140/night on my unit. Reading on I found that this particular listing also noted that it could accommodate up to 8 guest. When I plugged in 8 potential guest, the price jumped to approx $250/night (or more depending on the night). I was shocked! I was even more shocked when I saw that the apartment was only really built as a 1bed/1bath (as noted by some of the reviews). But the host got around this by putting beds in a sun room, using blow up mattresses, etc. Is this common? Does it actually work and increase profits without turning off potential guest? My unit is an official 2bed/1bath flat. But now I'm considering adding a queen sized hidden murphy wall bed to the large enclosed dining room. Any thoughts?

Luke Carl · Answer

@Rob Denn Hello! I own and self manage from a distance 5 VRs in the Gatlinburg Pigeon Forge market. The answer is..... Its totally up to you! I have 3 2 bedrooms and its very rare I allow more than 4 guests in them. Some of my competitors will allow 8 or even 10 in a 2 bedroom! I keep my number of guests low to try and keep the headaches and bad reviews to a minimum. I also don’t want 8 people tearing up my house. I’d say take the number of bedrooms and times it by 2. Any guests past that number charge extra per guest. If they want to sleep on the sleeper sofa charge them extra. It’s wear and tear on your couch cushions. The total number you allow is up to you but I’d suggest not starting out TOO high. And of course you can always change it one way or the other so nothing to worry too much about. Just get up and running!!Good luck!

Mark S. · Answer

I would disagree a little bit with Jon above. We have found that people tend to be honest (so far) --- and the maids can tell when they've exceeded the limit. I believe we charge a base rate that include 6 people and then $XX more per head up to 8 total. It's a bit of a revenue bump when we're hosting larger groups. It is fairly standard in our areas so most people don't bat an eye. Results may vary.

Mark Futalan · Answer

@Rob Denn I would also check if there are any occupancy requirements for your STR. I own a VR in La Quinta close to the Palm Springs Area. The city hear has occupancy laws (2 bedroom =6 max overnight guests, 3 bedroom=8 max overnight guests etc). If your VR will allow more people then definitely a higher bed count would be higher occupancy= more profit and yes maybe more headaches too

Richard Ibeh · Answer

@Rob Denn Hi Rob, what you mentioned is exactly the reason why Airbnb is being banned in multiple cities. Owners cramming guests inside of houses that should only sleep 3-4 but hosting 8-10. For a 2bed I would have one King/Queen in the master and a bunk bed in the guest room. In the living area, I would add a sleeper sofa or the murphy bed as you mentioned to maximize space. I would not go overboard trying to fit people into every inch as it'll lead to nothing but issues.

Jon Latorre · Answer

Implementing a "per guest" model can be difficult as guests are incented to lie about how many people will be staying. It's also almost impossible to verify if they are in fact telling the truth. For that reason, you should price your unit off of the maximum occupancy. - And if you can increase your max occ without affecting the luxury class of your unit... definitely do it! Heads in Beds = More money.

Mandy Ellett · Answer

I don't own a STR yet, but my husband and I have 5 kids and love to travel. Consequently we've stayed in a lot of STRs. We don't always get charged extra, but we often do. I generally expect to be charged extra for each person after the first 2, and am pleasantly surprised when they don't. As far as sleeping arrangements go, Lots of places have a futon in the livingroom or a couch that turns into a bed so they can sleep 2 more people. In fact, we've had that more often than not. Personally, it doesn't bother me if my kids sleep on a futon or sofa bed, but if I had to pay extra for 7 people and then they gave us air mattresses I'd be a little annoyed. I think the best use of space I've seen was a 1bdrm 1 bath we stayed in for a week an hour or so north of Seattle. The listing was on VRBO. They had 2 futons in the livingroom that folded out into beds, then they had built a kind of "L" shaped wall out of recycled doors (it actually looked pretty cool) and put a bunk bed that was a full on bottom and a twin on top on the other side of it. Then there was the actual bedroom with a queen bed in it. Technically that place could have slept 9 - 9 might have felt a tad crowded, but we were very comfortable for a week with 7 people.