Guests are Happy to Pay More For “Gap Nights”

Welcome back to the show. I'm glad you're here. I'm just gonna jump right in because I know last week we got a little doom and gloomy and we talked about the state of the economy. If you miss it, go back and check it out. We did break down the most important metric that we use to monitor our properties and we gave some great examples on that. So go back and check that out. If you missed it. This week we're going to talk about how to earn a little more more revenue from what we call gap nights. What is a gap night? You heard this term referred to as an orphan night. That's kind of, I don't know, orphan night's kind of like a sad, sad word, right? Mean like a bit of being stranded or something like that. So let's just go with gap day or a day that's sandwiched between two days. This is essentially a day in your calendar that you are not able to book because of the way that you have your minimum night stay requirements set up. So let's say you have a three night minimum stay and you have a three night reservation and then you have a two day window or gap and then you have another three night stay. Well, the two days in the middle, that is the gap day, that is the sandwich time that is unbookable. What can we do at this time? Well, we can simply offer it to both reservations on both sides of this gap at a discount. But before we talk about offering the discount on this gap night, let's just talk about, talk real quickly about minimum nights in general. Your minimum nights should be based off your average length of stay. And so if your market has an average length of stay of two nights and your minimum stay requirement is three nights, well, yes, you better believe that you're leaving a lot of money on the table. A lot of old school vacation rental markets. I saw this at the VRMA the last time I was there, just this last year. They still offer seven night minimum reservations because they're in an old school place where they. That's just the way it was. But that shouldn't be the case, right? Unless it happens that in that market the average stay is always seven nights, but it's never that way. Right. We know that sometimes there's a special event and maybe the event's only five nights and it's in an off season. Well then the minimum night stay for that special event should be five nights. But the rest of the year should be set up in a way to get the max amount of Reservations. If you don't know your book in Windows yet, well, check out pricelabs, co use some of their data, check out airdna, or talk with a property manager that might be able to help you out because this is really, really important stuff. So assuming you have your minimum night stays set up properly, the only time selling these gap days is not going to apply is if you have a one night minimum stay. But even then, you might want to offer that one night at a discounted rate to both reservations on both sides of that. So what does that look like? Let's say guest A makes the reservation and a couple weeks later Guest B makes the reservation and it leaves that two night gap. Well, the moment we have that gap, we want to offer those gap days at a discount to both guests. So we're going to reach out and say, hey, Guest Day, we would love to offer you. You can of course word this you want, but we would love to offer to extend your stay at a 30% discount. You already know that you're not going to be able to sell those nights because it's smaller than your minimum night stay requirement. It's unbookable, so it's basically blocked on your calendars. So you have an opportunity to sell it to the reservation before at a discounted price. Everyone likes a discount, right? And then you also have the opportunity to sell it to Guest B that's checking in afterwards and you can propose it to them in the same way. Hello, Guest B. And you can even say we, we have a gap in our calendar, but we would love to offer you a 30% discount to extend your stay if you'd like to check in early. Now the timing with this is really important. So the moment that Guest B made their reservation, you want to send the message out to them right away, right? Like instantly. Because when someone's in the mood of checking out or planning their vacation, they're much more likely to extend it. They're much more likely to pay for extra services and things like this. That's exactly why when you're booking something on booking.com or Airbnb that they offer their experiences after. Right? When someone's in the mode of purchasing, it's easier to sell them more stuff. That's just the reality to it. So you want to be offering to this gap night the moment that gap is created, because what is the alternative, right? You leave the gap there and you just don't make any money from it. It's just lost opportunity. So now the question is, well, what should you really Offer that gap night at how discounted should it be? And the answer is, if it's truly lost income, does it really matter? Right? Maybe you offer it at 50%, whatever you're comfortable with, whatever you think you can offer it at, and earn the most revenue from those nights. So you can be flexible with it too. If someone says, I might be able to stay, but if you could squeeze a few more dollars out of there, I'll go ahead and sign up, well, that's up to you, right? That's all on your end. But think that you also don't have any additional housekeeping, right? So your average reservation is now longer. You're not having to schedule more housekeeping, pay a housekeeping fee, and at the end of the day, your guest is going to be happier. So what better way to get a five star review than starting off by giving your guest a longer vacation at a discounted rate, right? It's. It should be done across the board anytime you have these gap days. So make sure you're keeping an eye on your calendar. You can set up gap days in Price Labs. If you're using Price Labs or Wheelhouse or one of the dynamic pricing software tools, you can set up automatic discounts in there. But remember, that's not going to send your guests a message, right? It's just going to show up in the calendar as a lower price night. And so what we've done is we've actually turned off those discounts. So anytime we have an orphan day or a gap day, there is no discount because we want to manually reach out to that guest and offer that discount. Now, I know that sounds like a lot of work and it has been for our team. You've got to monitor the calendar. The more properties you have, you got to make sure that again, the timing is crucial. So as soon as you get a gap day, boom, you can send that message out. Of course, you can make that message a template so it's easy, easier for you to send. But we signed up for a technology recently called Bestie AI, an artificial intelligence tool that loads right into our property management software. We're using Hostaway. It also works with Guesty, where it recognizes this for us, it automatically sends out the message. It automatically sends out our discounted rate based on what the rate was in the calendar. That saves our reception team a whole heck, a lot of work. Of course, if the guest accepts it, then we still have to send them a special price offer in Airbnb or If it's a VRBO reservation or booking.com then we have to adjust that reservation there. So of course there's gonna be a little bit more work. But it's one place where it's a win win for both sides. You as the owner, make a little bit more money and you have a happy guest. And that is the name of the game. I hope you take advantage of this if you're not already. If you've been enjoying the podcast or YouTube channel, remember we're on YouTube now. I'd really appreciate it if you wouldn't mind heading over there and just leaving us a little thumbs up or leaving us a like or sharing an episode that's helped you with a family member, a friend or someone that you know with a short term rental. I'd really appreciate it. It'll help us continue to spread the word, to spread good practices and hopefully make things easier for everyone. So until next time, have a fabulous week and I'll see you back soon.

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