Why the extra guest fee doesn’t work

[Dawn241]

I have decided to do away with the extra guest fee. By Airbnb standards we can allow up to six guests in 2 bedrooms and one common area. We used to allow up 4 guests (with additional charge for guests 3 and 4) but this assumes two couples sleeping in 2 beds/2 bedrooms. What we found was parties, people sleeping on the sofa, and excessive cleaning. All for the cost of two guests.

We then switched to $119 for two guests (keep in mind two guests could still be using two bedrooms so more is cleaning required) and $30 more for a total of three guests. We still had people bring 3-4 guests for the cost of two- $119.

So now we charge $149 for up to three guests and clearly state four guests are not allowed. And we’ve always had a two night minimum. I think it has improved the quality of guests we are getting in our second home. 

I think any host that charges for extra guests runs the risk of guests only paying the base rate (usually two guests) and guests bringing up to the max - or even more guests without paying the extra guest fees. 

[Lorna170]

@Dawn241   I have never understood the purpose of the extra guest fee.  When I rent an entire property on an OTA, my assumption is that there will be as many guests as the house can accommodate, so I charge a rate that will reflect that possibility.  I also have a cleaning fee that reflects cleaning the entire property -- it does not get smaller if there are only 2 guests.  

[Dawn241]

Agree

[Elaine701]

We have different metrics between high season and low season, so we have to implement different pricing models. 

In summer, we are virtually guaranteed to be booked at the highest rate. So, we price it "flat rate" for the entire villa, max 8 pax. Bookings normally are 6-8 pax. If we priced per person, the villa would be booked continuously in the summer for 2 persons at 25% of the flat rate, because it's cheaper. They might bring 8, but they'll book for 2. But it would be such a bargain for 2, that it would be booked for the whole high season for 2 pax, and we could kiss the higher rate goodbye. 

In the off season, the main market is 2-5 pax. So, we price it per person per night, starting at 2 pax, and an additional rate for each additional person. If we priced it flat rate for 8, it would simply be too expensive for 2 or 4 or 6. Conversely, if we priced it "flat rate" for say, 4, it would be continuously booked for 6 or 8, because it would be so cheap, it's irresistible. 

So, for us, this is why the per person rate is important. 

[Dawn241]

Or you could lower your flat rate in the off season. Summer - higher flat rate. Off season - lower flat rate. 

[Elaine701]

Every additional person costs money.

Couples are great. They generally don't stay up late, the don't use much hot water or electricity, only one bedroom to launder and heat. 

3 or 4 persons require another room. More laundry, more heating...  

5 or 6, another room.. And this many people tend to be more social. Stay up till 2:00am, with everything on... 

7 or 8, another room, more cost.

So, price it flat rate for 2, consistently get 4-8, because it's irresistibly cheap. Why not bring all your friends at that price? 

Been there, done that. No thanks.