Trip Preferences; Some Best Practices
Don't Set It & Forget It
Everything in this business is dynamic.
Last evening I had our weekly group Zoom call with new and aspiring Turo hosts and the topic of the evening was managing your pricing for maximum profitability and utilization.
Everything we do is related to those two outcomes. Utilization and profitability. And whether we’re talking about your daily rates, or your trip preference settings, everything in this business is dynamic, meaning, it changes from day to day, month to month, season to season. There’s nothing I can think of as a Turo host that should be managed with a “set it and forget it” approach. Doing so will cause you to miss the mark on utilization and/or profitability at various times of the year.
We closed out the evening talking about dynamic management of trip preferences. This was also a major focus of one of my 1-on-1 coaching calls with a client this week. So I thought it would be helpful to write this article for you.
Here’s how I dynamically manage some of my settings.
Before I get into the settings, it’s important to understand that nearly every market has three different kinds of “seasons” throughout the year. High season. Low Season. and Shoulder Season. High season is your busiest season. Low season is your slowest season. And shoulder seasons are those times in-between high and low season that can be bumpy and unpredictable.
During my low season (January through early March) I keep instant booking turned on. I want my calendar filled as much as possible so I remove every possible barrier to booking.
During my high season (late May through early August) I keep instant booking turned off. This is the time of year when trip requests will stack up and I can choose the trip with the best guest and earnings, and discard the rest.
This is another setting that I manage differently depending upon season. In my low season, I allow one-day trips. Again, I just want to remove all barriers to filling my calendar, and in my market, a high percentage of one-day trips convert into multi-day trips through extensions.
In the high season is when I’m more likely to set two-day minimums, always on the weekends, and on some vehicles during the week.
During the shoulder seasons you may have the best success with utilization by allowing one-day trips during the week, and requiring longer weekend trips.
And if you’re in a market with heavy business travel, and a significant percentage of your trips during the week are booked by visiting businesspeople, leaving the option for one-day bookings may be best, particularly during low and shoulder seasons, as a lot of businesspeople fly in for a day, are great guests, and will pay more because they’re just going to charge it to the business anyway.
End of Trip Discount
At the end of every trip you have the opportunity to send your guest a discount on their next trip when you’re rating and reviewing them. This discount can only be used with you, and expires in 90 days. This is another practice that I use differently depending on season.
During low season, I want my vehicles booked, and booked by the very best guests. This is when I will give an outstanding guest a discount when I rate them, because I want them back within 90 days.
During high season, I never give these discounts. My vehicles stay booked at the highest rates of the year, and there’s no reason to leave money on the table.
During shoulder seasons, I’ll use it with discretion, depending on how utilization is trending, which is often bumpy and unpredictable from week to week during this time of year.
This discount works best in markets that serve mostly locals, who are more likely to be repeat guests within the 90-day window. It’s less effective in heavy tourist destinations because your tourist guests are not likely to return within 90 days. For business travelers, there’s a better chance of them being back within 90 days because they likely have a corporate office, or clients, in your city, that they need to visit more often. I would consider always giving business travelers the end-of-trip discount, if they were a great guest.
Last Minute Price Boost
If you aren’t familiar with this, you have the opportunity to charge a guest an additional surcharge when they book a trip to begin within the same calendar day as submitting the booking. You can choose either 5% or 10%.
During low season, I have mine turned off as price can be a barrier to booking during a time when I’m really hungry for bookings.
During high season I keep it maxed out at 10% because my vehicles stay booked, with stacked trip requests, and people will pay the 10%.
And during shoulder seasons I drop it to 5% because guests are more price sensitive, there are more competing vehicles available, and traditional rental car rates are lower during this time of the year.
This is not a passive business.
Yesterday I saw another Turo “coach” pitching their services as a way to learn how to build a “passive income” business by being a Turo host. What we’ve talked about here is just another example of how this is a very hands-on business, semi-passive at best.
Not only are you hands-on with every trip, but to maximize utilization and profitability, and even risk, you have to be hands on with things like managing your trip preferences and making adjustments throughout the year. The only way for this to be a truly passive business is to own the vehicles, but let someone else do all the work, including managing the trip settings for your vehicle to fit the seasonal demand patterns in the market where the vehicle is hosted.