Handling Requests for Discounts
Some guests will message you prior to placing a reservation request and ask for a discount. From their perspective, they have little to lose in asking. These requests can be frustrating to you as a host however. They inevitably require a lot of back-and-forwards communications which take up your time and inevitably raise the administrative overheads in managing your listing.
Furthermore, they occasionally indicate a “red flag” for potentially problematic guests. Whilst by no means always representing a troublesome guest, these individuals tend to be the type of guests that occasionally require a more “hands-on” management style throughout their stay, and will be more likely to cause any number of additional problems that cost you time and money.
Your best strategy is to reflect on what you stand to gain in offering a discount. Questions to reflect upon include...
- How blocked out is your calendar currently?
- How many days is the reservation request for?
- What day(s) of the week is the reservation request for?
- What impact would accepting this reservation request have on being able to accept other reservation requests?
- What vibe are you getting from the prospective guest in terms of potential concerns throughout the stay?
Once you’ve determined the desirability of accepting the particular booking to you, consider the availability of alternative booking options for the guest requesting the discount.
If you live in a big city with lots of Airbnb listings, chances are that if you say no, the prospective guest can comfortably accept this fact, and move on with their search to find an alternative listing of comparable price, quality and amenities.
If however, the current competition is low, or your place represents something that makes it unique amongst a scarcity of comparable listings, then you are in a much stronger bargaining position to deny the request or offer only a minimal discount.
Smart Negotiation Tactics
Use smart negotiation tactics when getting back to the request for a discount. A few strategies you may wish to consider include…
- “Calling their bluff” by suggesting the likelihood that your place will be booked by other full-paying guests. An example response may be: “Thank you for your enquiry. We receive a lot of reservation requests over the summer, so we’re unfortunately unable to accommodate requests for discounts throughout these months.”
- Communicate additional value that guests will gain by choosing your place over alternatives. Things like unique amenities or higher-quality features encourage prospective guests to see the full charge as an investment in a superior experience rather than an unnecessary expense. An example response may be: “Thank you for your enquiry. Unfortunately our costs cover the additional amenities and high-end finishes that separate our place from similar places in the area. We’ve already discounted our prices despite these value-adds and factored them into our lower prices. We are regrettably unable to provide these superior amenities at rates lower than what they currently are.”
- Offer a separate low-cost benefit as an alternative to receiving a discount. Most people simply want to feel like they’ve walked away a winner, and providing a “token” benefit transforms the negotiation from a zero-sum game of winner/loser into a scenario with a win-win outcome for both you and the guest. You may wish to offer the prospective guest something like a complementary welcome gift upon arrival or free tickets to a local tourist attraction.
- Similarly, provide a discount for future reservations. Guests will infrequently take you up on this, but still enables you to make them feel like they’ve walked away a winner despite having no consequence to your current profitability. And in the event that they do take you up on the offer, it will assist your future occupancy rates with an additional booking too.