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Do my enterprise risk management gov do my paper technology master hirn nih reporter hello my YouTube friends its richard founder of short-term rental university and Airbnb super host on today's video we're gonna talk about a place where I think a lot of people are losing money and since we as hosts are here to being profit let's just cut it out look I recognize that what I'm about to say is gonna be controversial and a lot of people are gonna have comments so go ahead and comment I want to hear what you want to say and let's get into this debate that's the whole point of learning I want to hear about different people's opinions and I think we all benefit from it and here's the controversial thing what I'm realizing when I look at the Facebook group and I speak to people in the meetups is we don't really understand what hospitality means we confuse hospitality with like generosity and that's okay occasionally but that doesn't have to be something that we do every single time because at the end of the day we're running a business here and the way that a business succeeds in the long run is by being profitable and just as a reminder I think we all know this but like profitability comes from your revenue how much you make on Airbnb per night the number of nights minus your expenses and the expense component is something that we don't spend a lot of time on just realize that these expenses are the chips and the snacks and the crackers that you go and get it's the spending more money on a certain type of coffee and I'm a certain type of beer and leaving wine out it's on spending more than you need to on toilet paper sheets towels whatever right like there is a bare minimum that we need to do and then we have to be above that so we're not at like that you know bare minimum level we're all super oh so we're above that but above here let's calculate the return on investment is that really good worthwhile investment from your business so let me show you what I'm talking about so let me go ahead and draw this here we're gonna call this the STR you satisfaction quotient how do you like that Charles all right cool so look here's a basic line and it's gonna be like the the bare minimum expectation based on what they've read in the reviews and how much you're paying and like that's the bare minimum value now anything below that we're gonna go ahead and put that in read that gets people really angry like you can't be down there that's just a fail alright so you want to be at that black line or better now we don't want to just be at that black line we as super hosts we actually want to be on top of that line we want to be ahead of that line right we want to delight our guests and so that's this line here okay I think that that's a really good place to be in terms of getting five-star reviews and making people happy and delighting them and so on and so forth and the way you can achieve that is actually through caring and hospitality that is like free so you can put a handwritten no you can use a chalkboard you can have a map you can engage them to do certain things you can leave like magazines that you have you can have a guide that tells them where to go there's all sorts of things that you can introduce your guests to that don't actually cost any money and you can even do things that are inexpensive and meaningful so if you want to have you know one or two snacks or something like that or I don't know microbrew beer or anything like it's okay to spend a little bit of money but what I'm seeing a lot in the Facebook group and in the meetups are people that are just spending an awful lot of money above that line like going way overboard spending way too much money on on basic necessities from you know maybe paper towels or toilet paper or that and I must have 600 count sheets and I iron everything and at the end of the day people don't really notice they may appreciate it they may think it's super great but it's not gonna influence their buy decision you don't want to be there right they're not going to influence their buy decision it may not influence the night knightly rate like you're not gonna get any more money for it and it may not even influence your five-star review so like there's no point in doing it by doing all of that by spending all that money and your time right like going to get to specialty cheese and the wine and so on not only spending time and money but you're not getting any reward and so like the thing that you want to try and do is be in that sweet spot here in the green above the bare minimum substantially doing things that delight your guests and make them happy and make them want to come back and write about your stuff in your review spending a modest amount of money keeping the eyes on the expenses and avoid everything above that because at the end of the day we're all running a business here and we just can't waste money unnecessarily it's just not a good idea and it's sustainable and so while it sounds really great and you feel like you're doing all this wonderful things for your guests you may not be doing the best thing for yourself and to do really right by your guests you need to be in business for a long period of time to delight hundreds if not thousands of guests over a significant period of time so the green is the sweet spot all right so I'm clearly not that good at that but I wanted to try and illustrate it I hope it made some sense when we did that like at the meetups people's eyes literally lit up and here's the point we're in this to be profitable many of us want to expand on to you know our second or third properties and the best way to do that is by keeping an eye on our expenses especially if you charge a low nightly rate like if you're at $100 or below those expenses are critical to your success and I see a lot of people spending unnecessarily to outfit like there are air B&B properties the way that they like to live and you don't need to do that right so like if you like a twenty dollar bottle of Pinot Noir you don't need to do that if you like 600 thread-count sheets in your place you don't need to outfit your Airbnb rentals like that you need to think about what you do to exceed the bare minimum significantly but not like go overboard spending money and throwing money at this stuff does not translate into hospitality into five-star reviews or even into appreciation what really improves your ratings and your five-star reviews and stuff like that is knowing your guests making sure that they're comfortable exceeding their expectations and you can do that without throwing a lot of money out the door so I hope you found that helpful one thing I'd encourage you to do is like leave a comment tell us where you changed something and you saved a lot of money you reduced your expenses and therefore you made more profit and it could be anything I installed a thermostat that was on a timer and so I spent less money on utilities I I don't know you know stop putting out the wine and guess what my reviews didn't change I did something that I no longer do and now it's better give us the ideas because we all grow from one another in the meantime I want to encourage you to please go ahead and subscribe to the channel if you haven't I want you to come over to the Facebook group we've got a lot of great stuff going on in that community and I really appreciate your time energy thanks so very much happy hosting I'll see you soon [Music] capstone project business examples order Hilbert College, Hamburg.