Guide to selling extras to your vacation rental guests
- May 21, 2018 | Jennifer Sokolowsky
Operating a short-term rental offers hosts an opportunity to realize extra income. Hosts can generate even more income by selling extra products or services to guests. Giving guests the chance to purchase an extra they want or need right where they’re staying can be a welcome convenience.
However, there are some things to keep in mind before you start offering extras to your guests.
Ideas for extras
When you’re looking for ideas for extras you can sell to your guests, think of offerings that would enhance your guests’ stay or things they would probably purchase elsewhere anyway. If you get requests from guests for certain services or recommendations, these can be a great place to start.
Any extras you offer your guests should be carefully considered and align with the type of guest, accommodation, and location. Providing an option to purchase a picnic basket might be a welcome option for a vacation rental house in wine country — not so much in an urban apartment.
And sometimes, even though you could charge extra for a certain service or product, it may be worth it to throw it in for free. Welcoming your guests with a complimentary bottle of wine or a food basket, for example, can go a long way toward creating the kind of excellent experience that will garner favorable reviews and referrals.
If you’re offering physical products, try to make them unique, distinctively local, and/or specific to your accommodations. Ideas include:
- Picnic baskets/gift baskets
- Local edible goods such as jams, jars of honey, or candles
- Local art, including photography
- Outdoor gear
Guests who are on vacation often welcome anything that can allow them do fewer chores and have more time to relax. Some of these you can do yourself, while others you may want to contract out to other businesses. Services that can enhance your guests’ experience include:
- Stocking the rental with groceries
- Pet walking
- Child care
- Personal chef services
- Laundry services for longer stays
You can also offer your guests experiences — and in fact, this is a growing area of focus for Airbnb, which has a specific program for experiences. These are limited only by your imagination, but ideas include:
- City or neighborhood tours with different areas of focus, such as farmers markets, historical sites, or boutique shopping
- Bicycle tours
- Lessons ranging from surfing to jewelry-making
- In-home experiences such as cocktail-making or cooking demonstrations
In some cases, rather than offering the extras yourself, you could benefit from recommendations to guests. You may be able to come to an agreement with local high-quality businesses, such as tour operators or equipment rental operators, in which you recommend each other’s businesses or get a commission for referrals.
What to watch out for
Keep in mind that when you start selling products or services, you’re in fact starting a new business, separate from your short-term rental business. And just as you need to be aware of the local regulations that govern short-term rentals, you need to know the rules that apply to selling extras to your guests.
Some goods or services may present legal issues — for example, if you wanted to offer the option for guests to purchase wine or other alcohol during their stay. In some places, this may not be legal at all, or you may need a license to do so legally. Similarly, if you offer prepared food for sale, there may be local laws that prohibit that or require a permit. You may also be required to get a business or professional license or permit to offer certain services or to sell retail items.
These kinds of laws are very local in nature, so the rules that apply to you will depend on where you are. It’s worth doing a little research to determine if selling a certain type of extra could get you in legal trouble.
Something else to consider is liability. For instance, if you rent equipment such as bicycles, you may want to look into liability and insurance issues.
In most places, you won’t have to collect lodging taxes on extras you sell to guests because generally, those taxes only apply to mandatory, nonrefundable charges and fees, such as the base cost for accommodations and cleaning fees.
However, in most states, you’re probably required to collect and pay sales tax on items you sell to guests. A few states allow an exemption if a seller makes less than a certain amount per year from sales, but generally, you must collect sales tax starting from your first sale. Again, these rules are very local, so do your research.
And of course, you’re required to report any income from selling extras when you file income taxes.
Things to think through
Once you’ve decided to offer your guests the chance to purchase extras, it’s time to think about how this will work. Here are some questions to ask:
Will you be present for sales?
If your short-term rental is largely hands-off, that might make selling extras a bit more complicated, depending on what you’re offering. Experiences or services, for example, could be arranged and paid for remotely, but selling physical products might be more difficult if you’re not actually meeting guests face to face.
How much will you charge?
Just as in setting prices for your rental, you want to make sure you hit the sweet spot in pricing for your extras. Charge too little, and they may not be profitable. Charge too much, and you may not get any sales. It may take a bit of trial and error to get it right.
How will guests pay?
If you provide gift baskets or picnic lunches, for example, these could be ordered ahead of time and added to the bill. Or your listings platform may have a function for adding extra charges. Other options include online payment systems such as PayPal or good, old-fashioned cash.
How will you let your guests know about extras?
It’s probably helpful to let guests know as far ahead as possible what extras will be available to them — especially for items that need to be booked ahead. You may be able to mention these on your online rental listing or refer guests to another website that goes into more detail. For some physical items, it may be enough to display them in the rental for guests to see when they arrive.
How will your extras be presented?
Be careful in presenting your extras for sale — they should never detract from the overall experience of your guest’s stay. Any extras should be offered as entirely optional, with no pressure to buy whatsoever. Likewise, when you offer physical products such as art or jewelry, their display should be unobtrusive and harmonious with the rental space. If guests feel they’re getting the hard sell or a display of goods is unwelcome, this can negatively affect your reviews.
A little extra
Offering extras to your short-term rental guests to purchase can take some thought and preparation. But if it’s done right, it can be a win-win situation, enhancing the guest experience and generating extra income for you.