Friend and neighbor discount?

[lazarus]

...we are being approached by friends and neighbors... they are not asking for a discount, but we would like to have a policy and offer them something. what do you do?

 

[user 26]

I did ... smart move. At first, it was just one neighbor who had family coming (summer tourist area) and not enough room. I hesitated because it was summer, but then offered a discount. Then we became the go-to place for our neighbors to send their families and friends. First year, we were closing down for the season as everything closed in the area, and were thrilled to get three and five day guests over Thanksgiving. I got a call from a neighbor asking ... she knew we were getting ready to close up. They booked one room, then another neighbor booked two more. Unexpected revenue that would have been zero.

 

[lazarus]

thanks, seashanty... would you mind sharing your discount rate? We were thinking 20 percent...

 

[EmptyNest]

That sound fair to me. You need to do this otherwise there are tax implications if you were to just give room away.

 

[Jcam]

its tricky as "friends and neighbours" guests tend to be the most difficult as they feel normal rules don't apply to them - it needs to be clear you are a business and while you are happy to give discount normal cancellation still applies.

 

[user 26]

thanks, seashanty... would you mind sharing your discount rate? We were thinking 20 percent....

It was 20%
This was neighbors of the b&b. And not used very often. But the offer was out there. It was verbal --- I went door to door before the place opened in spring and reintroduced myself with muffins.
Best for me was it fostered good will and if someone asked where they should stay, the neighbors I was able to friend would send them to me.
Not my personal family and friends ... I seldom had family ask to come and stay as registered guests ... and when they did it was not for free. I gave them the discount. When my adult daughter came to visit I donated a gc to her as I was cautioned about that. Another time we had a family party and I turned it into a whole house rental. I've heard all kinds of stories of relatives descending on b&b's wanting expecting to stay for free.

 

[lazarus]

thank you all -- very helpful. it looks like we are going to give 20% a try.

 

[JBloggs]

Life is short.
If these people are the ones you love then you do what is right. If they are locals, then do what is right. It may be a hard line to follow and learn from...
#1 experience I have dad with locals is worse than the discount, it will cost you a multiple night booking. How? You ask. They are hesitant since you all know each other to give you a credit card,in fact think you are a money grubber if you even dare ask for it. But they WILL drop you and not tell you,they will no show,"oh so and so decided to stay at the uncomfort-able inn" and so on.
I have had more bad experiences with friends and neighbors that any, so they can have the friends and neighbor discount - regular room rate with policies attached.
I have stories of entire inn being booked during prime and losing ALL revenue do to it, and more. Way way more. Wait up all night the person they wanted to put with us didn't show, and they say "well you can't charge us since they didn't use the room" ignorance abounds in this situation.
Go to church or involved in any community groups? Hey now we have a member who has a B&B, we can put up folks for free. Whatever you do establish it once and for all and they call on it when you need to. The same with go for "giveaways" of which they will all want.

 

[Tom]

Be cautious, neighbors can be very difficult. There are really 2 things working against a good experience: 1) the guest who stays and pays is not the one picking you – they are being told to stay with you by your neighbor and 2) because of the neighbor connection, people feel entitled to special treatment.
#1 is really the biggest problem. Whether it's a family get-together or couples on an outing or neighbors, whenever party A says let's stay here, party B will almost always think it's too expensive or find some other fault. They can be grumpy guests.
#2 is partly about money but usually about how the rules don't apply. When dealing with neighbors it is important to stress how you must apply your policies for check-in time, departure, and most of all: cancellation. Tell your neighbor that you are happy to welcome her friends, but they will need to go through your booking system, give you a credit card, and abide by all of your policies. Tell your neighbor directly, start off by saying "I'm sure you'll understand that we are a small business ... " and repeat that when speaking with the prospective guest.
As for discounts, I have never felt it made much difference. If you are their kind of place they're happy to pay; if you're not their kind of place, 10 or 20% off won't make it work.
What I have done successfully, is to invite the neighbor to join the guest at the B&B for breakfast without charge. Gives them a sense of being a co-host with me.

 

[user 26]

I have to say I did not have neighbors take advantage or that the folks they sent to me expected to play by their own rules. It worked for me. You have to try things - if you choose to - and if they don't work out, you stop. Everyone booked as per usual, and I gave them a code to use for their discount. They paid a deposit as did all my guests.
It was against 'the rules' for me to invite people who weren't staying to join guests at the breakfast table. The health inspector warned me against doing this saying I did not have a restaurant license so it was registered guests only. I guess there was a problem someplace in the area so he was always on about it.
What I could do is offer muffins and bagels on the side. And I did! I gave free coffee and muffins to the egg man, the 'rubbish man' (his name for himself), the laundry service. I always had extra of those things and they were thrilled to get them. Was kind of funny ... the trash guy would come in the back door and sit down at a table nearest the exit drinking coffee. It was when breakfast was just about over so he wasn't taking any seats away. Anyway, he'd sit and tell the funniest stories while I was cleaning up so he'd stay a while ... I was surprised to hear in the village that gossip was I had something going on with the 'rubbish man'.

 

[TheBeachHouse]

Be cautious, neighbors can be very difficult. There are really 2 things working against a good experience: 1) the guest who stays and pays is not the one picking you – they are being told to stay with you by your neighbor and 2) because of the neighbor connection, people feel entitled to special treatment.
#1 is really the biggest problem. Whether it's a family get-together or couples on an outing or neighbors, whenever party A says let's stay here, party B will almost always think it's too expensive or find some other fault. They can be grumpy guests.
#2 is partly about money but usually about how the rules don't apply. When dealing with neighbors it is important to stress how you must apply your policies for check-in time, departure, and most of all: cancellation. Tell your neighbor that you are happy to welcome her friends, but they will need to go through your booking system, give you a credit card, and abide by all of your policies. Tell your neighbor directly, start off by saying "I'm sure you'll understand that we are a small business ... " and repeat that when speaking with the prospective guest.
As for discounts, I have never felt it made much difference. If you are their kind of place they're happy to pay; if you're not their kind of place, 10 or 20% off won't make it work.
What I have done successfully, is to invite the neighbor to join the guest at the B&B for breakfast without charge. Gives them a sense of being a co-host with me..

Twice last winter, we closed off a room on request of a neighbor, only to be told when we called to check on arrival time, that their friend decided to stay with the neighbor. Thanks. That's a lost room with no deposit because we were being helpful neighbors. Lesson (#65) learned.
To the original question, we give a 10% discount to friends and some return guests and we often give rooms for free to family and close friends. And I don't see how the i r s could care. We are obviously a business. If I run a candy store and give away candy to the neighbor kids, does that mean I'm not running a business?

 

[EmptyNest]

Be cautious, neighbors can be very difficult. There are really 2 things working against a good experience: 1) the guest who stays and pays is not the one picking you – they are being told to stay with you by your neighbor and 2) because of the neighbor connection, people feel entitled to special treatment.
#1 is really the biggest problem. Whether it's a family get-together or couples on an outing or neighbors, whenever party A says let's stay here, party B will almost always think it's too expensive or find some other fault. They can be grumpy guests.
#2 is partly about money but usually about how the rules don't apply. When dealing with neighbors it is important to stress how you must apply your policies for check-in time, departure, and most of all: cancellation. Tell your neighbor that you are happy to welcome her friends, but they will need to go through your booking system, give you a credit card, and abide by all of your policies. Tell your neighbor directly, start off by saying "I'm sure you'll understand that we are a small business ... " and repeat that when speaking with the prospective guest.
As for discounts, I have never felt it made much difference. If you are their kind of place they're happy to pay; if you're not their kind of place, 10 or 20% off won't make it work.
What I have done successfully, is to invite the neighbor to join the guest at the B&B for breakfast without charge. Gives them a sense of being a co-host with me..

Twice last winter, we closed off a room on request of a neighbor, only to be told when we called to check on arrival time, that their friend decided to stay with the neighbor. Thanks. That's a lost room with no deposit because we were being helpful neighbors. Lesson (#65) learned.
To the original question, we give a 10% discount to friends and some return guests and we often give rooms for free to family and close friends. And I don't see how the i r s could care. We are obviously a business. If I run a candy store and give away candy to the neighbor kids, does that mean I'm not running a business?
.

If you live in your property and use the property for income and file taxes, According to the B & B regs, you cannot let friends or relatives stay free. Guest rooms are 100% for business use. That is the IRS ruling. If you do, then you can't claim 100% of the room use as business.

 

[gillumhouse]

Be cautious, neighbors can be very difficult. There are really 2 things working against a good experience: 1) the guest who stays and pays is not the one picking you – they are being told to stay with you by your neighbor and 2) because of the neighbor connection, people feel entitled to special treatment.
#1 is really the biggest problem. Whether it's a family get-together or couples on an outing or neighbors, whenever party A says let's stay here, party B will almost always think it's too expensive or find some other fault. They can be grumpy guests.
#2 is partly about money but usually about how the rules don't apply. When dealing with neighbors it is important to stress how you must apply your policies for check-in time, departure, and most of all: cancellation. Tell your neighbor that you are happy to welcome her friends, but they will need to go through your booking system, give you a credit card, and abide by all of your policies. Tell your neighbor directly, start off by saying "I'm sure you'll understand that we are a small business ... " and repeat that when speaking with the prospective guest.
As for discounts, I have never felt it made much difference. If you are their kind of place they're happy to pay; if you're not their kind of place, 10 or 20% off won't make it work.
What I have done successfully, is to invite the neighbor to join the guest at the B&B for breakfast without charge. Gives them a sense of being a co-host with me..

Twice last winter, we closed off a room on request of a neighbor, only to be told when we called to check on arrival time, that their friend decided to stay with the neighbor. Thanks. That's a lost room with no deposit because we were being helpful neighbors. Lesson (#65) learned.
To the original question, we give a 10% discount to friends and some return guests and we often give rooms for free to family and close friends. And I don't see how the i r s could care. We are obviously a business. If I run a candy store and give away candy to the neighbor kids, does that mean I'm not running a business?
.

As long as there is a charge (no rules on what to charge or who pays that charge), it is OK. Only hotels are allowed to comp rooms.

 

[TheBeachHouse]

Be cautious, neighbors can be very difficult. There are really 2 things working against a good experience: 1) the guest who stays and pays is not the one picking you – they are being told to stay with you by your neighbor and 2) because of the neighbor connection, people feel entitled to special treatment.
#1 is really the biggest problem. Whether it's a family get-together or couples on an outing or neighbors, whenever party A says let's stay here, party B will almost always think it's too expensive or find some other fault. They can be grumpy guests.
#2 is partly about money but usually about how the rules don't apply. When dealing with neighbors it is important to stress how you must apply your policies for check-in time, departure, and most of all: cancellation. Tell your neighbor that you are happy to welcome her friends, but they will need to go through your booking system, give you a credit card, and abide by all of your policies. Tell your neighbor directly, start off by saying "I'm sure you'll understand that we are a small business ... " and repeat that when speaking with the prospective guest.
As for discounts, I have never felt it made much difference. If you are their kind of place they're happy to pay; if you're not their kind of place, 10 or 20% off won't make it work.
What I have done successfully, is to invite the neighbor to join the guest at the B&B for breakfast without charge. Gives them a sense of being a co-host with me..

Twice last winter, we closed off a room on request of a neighbor, only to be told when we called to check on arrival time, that their friend decided to stay with the neighbor. Thanks. That's a lost room with no deposit because we were being helpful neighbors. Lesson (#65) learned.
To the original question, we give a 10% discount to friends and some return guests and we often give rooms for free to family and close friends. And I don't see how the i r s could care. We are obviously a business. If I run a candy store and give away candy to the neighbor kids, does that mean I'm not running a business?
.

If you live in your property and use the property for income and file taxes, According to the B & B regs, you cannot let friends or relatives stay free. Guest rooms are 100% for business use. That is the IRS ruling. If you do, then you can't claim 100% of the room use as business.
.

Makes sense. Business deductions are often fudged for independent contractors. So I can see how that is applied.