Know Your Guest is a risk management platform purposely designed and built by hosts for hosts to understand the bigger picture, and create safer bookings for all parties involved through the use of automated technology.
Many will have heard of the phrase Know Your Customer. This is a global set of financial guidelines designed to protect against illegal funds, transactions and losses caused as a result of fraud.
As a business, you want to verify that your customer is a genuine buyer before you complete a financial transaction with them. Why? Because this helps analyse the risks involved ahead of time and reduces potential fraudulent transactions and a whole lot of hassle.
How is this relevant to short-term rental hosting?
Did you know, as a host, you’re entering into a financial transaction every time you accept a booking? You’re providing your home for a short period of time in return for an upfront fee from the guest.
Therefore, not only could you be at risk of hosting problematic guests, but fraudulent and criminal activity too.
So, how do you manage these short-term rental risks? How do you host safer? How do you Know Your Guest
What is Know Your Guest (KYG)?
Superhog continuously looks to create innovative technology to allow the short-term rental industry to conduct safer and more trusted bookings that benefit hosts and guests.
We wanted to ensure the short-term rental hospitality industry followed a similar standard of risk management as the Know Your Customer fundamentals, so we coined the term Know Your Guest (KYG) for our product solutions.
Know Your Guest is a risk management platform that allows you to verify your guests through intelligent guest screening, identifying risks and mitigating the risks involved and provides a damage protection plan for further booking assurances.
What does it mean to Know Your Guest?
An effective risk management process involves:
- Knowing your guest’s true identity
- Analysing their financial activities for fraud
- Understanding the levels of risk they pose
With the right risk management strategy you can streamline your business, automate your processes and even develop your own direct booking strategy, so you can become an independent host and reap the rewards you sew.
When you have the full picture, you can trust your guests with your most valuable asset, your home.
Understanding risk management as a short-term rental host
In our latest survey in partnership with For The Host a Property Management and Acquisition company and Short-Term Rental Advisor, 71% of 165 hosts asked, had never heard of short-term rental risk management.
That shows many hosts are unaware of the benefits risk mitigation can bring to their short-term rental bookings. They either:
- Heavily rely on the assurances of larger OTAs (Airbnb and Vrbo);
- Leave themselves vulnerable to risk including hosting problematic guests;
- Leave themselves susceptible to fraud, damage or even a loss of revenue
Managing a short-term vacation rental can come with a long directory of Dos and Don’ts. We’re here to show you how implementing Know Your Guest is an effective process of risk management and will keep your business safe, secure and successful.
How? When you truly know your guests, you will understand more than what will drive conversions and keep your rental fully booked. You will know exactly what risks are involved with your property and each potential guest, and you will manage those risks effectively.
Not only will you fuel your business’s funnel and provide a seamless digital experience, but you will also be able to:
- Say goodbye to unauthorised guests entering your property
- Prevent illegal parties
- Reduce the risk of criminal activity within your property
- Protect your properties and minimise the risk of damage
- Prevent fraudulent activity
How many short-term rental bookings result in damage?
As every booking is different and not all guests pose the same risk, the resulting accidental damage caused during a booking varies. There is no surprise that some hosts, therefore, experience more damage than others.
However, when a risk management strategy is implemented, the occurrence of costly damage in short-term rental bookings is reduced, along with the headaches that coincide with damage, including administrative tasks, compliance and even cancellations.
When using third-party booking sites, do you feel put first as a host when something goes wrong with a booking?
68% of the hosts surveyed – with a typical range of 1-4 properties and looking to scale their business – mentioned they have felt ignored by large OTAs and that these platforms do not care when damage has occurred.
This is because these vacation-rental giant platforms are built and designed in favour of guests.
So, how do you protect your listings and reduce your reliance on OTAs? You need to build a risk mitigation strategy that prevents the wrong guests from entering your property but also provides a damage protection plan in case something goes wrong.
What is a damage protection plan?
Small damages are to be expected. Rental properties see more footfall and heavy-duty activities than standard home living properties. When damages do occur, the communication and protection process from third-party booking sites is typically sub-par.
So, you need a plan.
Many hosts believe specialist short-term rental insurance is the only answer.
However, a damage protection plan can provide an additional layer of assurance as part of a comprehensive risk management strategy. You can safeguard yourself against the cost of damage and added premium fees that come with insurance claims by implementing resolutions and mediation facilitated by Know Your Guest.
Our Damage Protection Plan is not insurance but offers the ultimate backup plan for your vacation rental bookings.
How it works
- You add the Know Your Guest Damage Protection Plan up to $5,000,000 onto your verified short-term rental bookings. See our guest verification solutions here.
- You inform us of any guest-related damage within 7 days of check-out
- We will pursue guests for the costs associated with any damage they have caused, and we will mediate with them to ensure they honour their liability
This plan will enable you to host confidently, knowing you’re protected up to $5,000,000, so you no longer need to rely on third-party booking sites or leave yourself vulnerable to property damage.
When you build your risk management strategy with Know Your Guest, you build your own assurances. Open your door to guests, not risks.
Damage Waivers in the vacation rental industry
Not all property damage is preventable. Not all guests can afford a large upfront deposit or hold on their card.
The solution; damage waivers.
Do you know what a damage waiver is?
When asked about damage waivers, only 18% of hosts have implemented them into their booking journey and 25% of hosts know what a damage waiver is, but they do not utilise them within their strategy.
A staggering 57% of hosts are unaware of what a damage waiver is.
Unfortunately, this means 82% of these hosts are missing out on simplifying their processes of managing short-term rental damages and even missing out on creating an additional revenue stream.
How it works
- The guest will pay a small non-refundable fee (eg. $35) to waive their liability of damage during their stay as part of their rental agreement, rather than pay a large refundable fee of $500 that could be collected upon in the instance of damage occurring.
- We use 3D Secure to prevent fraudulent chargebacks.
- If no damage has occurred, then no payout is needed. You keep the waiver payment as extra revenue.
Not only does a damage waiver build the means to cover small guest damages quickly, you in fact create a greater guest experience and encourage guests to be more responsible during their stay.
Collecting a damage deposit with Know Your Guest
As a rule of thumb across multiple industries, a damage deposit is a sum of money paid ahead of time in relation to a rented item or property, to ensure it is returned or handed over in good condition/the same condition as it was loaned.
Hosts in the short-term rental industry have the right to endorse the collection of damage deposits from guests as part of their rental agreement.
Damage deposits (also known as security deposits) are traditional risk management processes for short-term lets; however, only 23% of hosts surveyed by For The Host collect a damage deposit from their guests.
77% of hosts admitted they do not collect damage deposits, leaving themselves vulnerable to the costs of guest-related damages.
Not all third-party booking sites collect damage deposits from guests, and ultimately, this leaves you out-of-pocket when damages occur and the platform does not maintain a neutral position between both parties.
By introducing a damage deposit process into your booking journey, you are creating a risk mitigation strategy. This will form a layer of protection around your revenue, so when an accident does occur – because they do – you won’t have to dip into your own pocket.
If you’re committed to providing a seamless digital experience for your vacation rental guests, and you want to build confidence in your bookings, then you need to build a risk management strategy with Know Your Guest.
Damage deposits are a part of that strategy.
There doesn’t need to be back-and-forth communication with the guest. The process can be automated into your booking journey, protected by 3D Secure and fully facilitated by Know Your Guest.
Know Your Guest by Superhog provides you with the tools you need to verify your guests, build confidence in your bookings and assess the risk level of each reservation, no matter what booking channel is used.
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