The Easiest Way to Add 25% More Profit to Your Airbnb Bookings

Summary

This video explores how to increase revenue for short-term rentals using the concept of 'gap nights' — vacant nights between bookings. Hosts Sarah Karakan and Annette Grant explain the strategy of offering discounted gap nights to guests who have already booked, helping maximize occupancy. They discuss four key pillars: knowing your costs, understanding booking windows, pricing gap nights appropriately, and adopting the right mindset. The hosts also share tips on how to market gap nights effectively, including using dynamic pricing, making multiple offers, and automating messages to streamline the process.

Takeaways

• 😀 *Gap nights* allow hosts to offer discounted stays to fill vacant nights before or after a guest's reservation, maximizing revenue.
• 💡 *Know your costs*: Understand the cost per reservation to ensure gap nights cover basic expenses like mortgage and utilities, even if discounted.
• 📅 *Booking window*: Timing is crucial. Offer gap nights only within the booking window, as early offers might not appeal to guests.
• 💰 *Pricing strategies*: Pricing gap nights should consider market conditions. Dynamic pricing can adjust rates automatically based on demand.
• 🤖 *Automated offers*: Use tools like Breezeway or Airbnb's templates to automate gap night offers, saving time and increasing revenue.
• 🎯 *Tailored offers*: Personalize offers for better conversion. Send multiple offers if the guest initially declines to keep their interest alive.
• 🧠 *Mindset*: Treat gap nights as a way to recover lost revenue, not to maximize profit. Focus on filling vacancies rather than making a large profit per night.
• ✈️ *Half-day stays*: Rebrand gap nights as 'half-day stays' to appeal to early arrivals or guests looking to extend their stay without booking a full night.
• 🤝 *Human approach*: While automation is useful, don't hesitate to engage personally with guests to sell gap nights, especially when offering flexible solutions.
• 📈 *Track success*: Monitor and adjust pricing and frequency of offers based on guest response rates, aiming for a balance between filling vacancies and maximizing returns.

Q & A

What is a 'gap night' in the context of short-term rental hosting?

A gap night refers to a vacant night between guest stays that would otherwise go unsold. It is offered at a discount to guests who are already booked, allowing the host to fill an empty slot and recoup some revenue.

Why is offering a gap night beneficial for hosts?

Offering a gap night helps hosts recover revenue that would be lost if the property remains vacant. Since the guest has already paid the cleaning fee, offering this additional night at a discount increases income without significantly increasing costs.

How should hosts determine the price for a gap night?

Pricing a gap night depends on market and property specifics. Hosts should aim to price it low enough to attract guests while covering basic costs, such as mortgage and utilities. It's not about maximizing revenue but minimizing losses from a vacant night.

What is meant by the 'booking window,' and why is it important?

The booking window refers to the time frame in which guests typically book their stay before arrival. Knowing this helps hosts decide when to offer gap nights so that they don't offer a discount too early, when they might still receive full-priced bookings.

What tools can hosts use to determine their booking window?

Hosts can use tools like Price Labs, which provides detailed insights on booking behavior, or they can check their Airbnb insights under the 'Booking Lead Time' section to find the average number of days guests book in advance.

How can hosts create a successful strategy for selling gap nights?

To sell gap nights successfully, hosts should focus on knowing their costs, understanding their booking window, pricing appropriately, and offering the gap night at the right time. They should also track their success rates and adjust pricing or messaging based on guest responses.

What is the significance of dynamic pricing in relation to gap nights?

Dynamic pricing automatically adjusts prices based on demand and availability. When offering a gap night, dynamic pricing may have already lowered the price to attract last-minute bookings, making the 'discount' seem more attractive to guests, even though it's the adjusted price.

What is the importance of testing different pricing strategies for gap nights?

Testing pricing strategies helps hosts find the optimal rate. If most guests are accepting the gap night offer, it may be priced too low, and the host can raise it slightly. Finding a balance between filling the night and maximizing revenue is key.

How often should hosts make offers for gap nights to guests?

Hosts should not limit themselves to making only one offer. They can send multiple offers as the arrival date approaches or even after the guest has checked in, especially if their travel plans change. Persistence can increase the chances of filling the gap night.

How can hosts automate the process of offering gap nights to guests?

Hosts can use tools like Breezeway Messaging, which automatically sends messages to guests about available gap nights based on booking data. Airbnb users can also manually send offers using saved message templates.