Who gets to move the nightly rate, and what the clause should say

Run the arithmetic before you argue about the clause. Take a 30 night month. At a $165 floor and 40 percent occupancy you book 12 nights, $1,980 gross. Drop to $89 and if you fill 24 nights you're at $2,136, but you've added 12 more turns. Call cleaning $95 a turn paid by the guest and it washes on paper, except your consumables, your linen replacement cycle and your damage exposure all scale with turns, not with revenue. On the units I underwrite I model roughly $18 to $25 of unbilled cost per turn once you include restocking and the occasional emergency run.

So the discount only wins if the occupancy lift is large. A $76 price cut buying you four extra nights is a loss dressed as a win. That's the test I'd put in front of the owner, and it's the reason I'd rather have a floor set by evidence than discretion set by vibes.

The part that decides it for me is whose money is at risk on a dark night. The owner is paying the mortgage, the insurance and the utility base whether the unit sells or not. You're paying nothing. That asymmetry is a real argument for the floor existing. What I wouldn't accept is a floor the owner can't explain, meaning a number pulled from what he thinks the place is worth rather than from his own carrying cost.

I've had the floor version twice and both times it ended the same way. Owner sets $199 in July because that's what the neighbor got, then never answers the phone in November when the comp set is at $120 and I'm nine days out with nothing on the calendar. By the time I get approval the booking window has closed and those nights are gone permanently. You can't sell a Tuesday in the past.

What I do now is full discretion with a reporting obligation. I send a monthly one page with ADR, occupancy and revenue against the same month prior year, plus a line on any rate I took below a threshold and why. Owner keeps a termination right on 30 days. That way he's not approving individual nights, he's judging the whole quarter, which is the thing he's actually competent to judge.

Sextant, your asymmetry point is fair but it cuts the other way once you're a few units deep. If I'm optimizing badly the owner fires me and I lose the fee stream, which is the only asset I have in this business.

Keystone's monthly report is the part I'd steal. The discretion fight goes away once the owner can see what the discretion bought him.

I read the original post twice and I still want to check I've got the mechanics right. When you say a $165 floor, is that the nightly rate only, or the whole amount the guest pays including the cleaning fee and taxes. Because on the listings I've been looking at as a guest, the nightly number and the total are very far apart, and if the floor is written against the wrong one the two sides could think they've agreed on something they haven't.

Also, does a floor apply to length of stay discounts and last minute drops separately, or is it one number covering everything. Those seem like different decisions to me and I'd want them named separately in a contract, but maybe that's over-thinking a two page agreement.

Juniper's question about which number the floor attaches to is the whole thread, honestly. Everything else follows from that.

Juniper, define it as base nightly rate before fees and taxes, and say so in the sentence. I've seen a draft where the owner meant guest total and the co-host meant base, and the gap was about $60 a night.

The clause I'm building my agreements around is discretion with a floor that resets. Owner sets an initial base floor. I get unilateral authority above it. Below it I can go without approval if the arrival date is inside 14 days, because that's the window where a dark night is worth less than a cheap one. Then every 90 days we revisit the floor against actual booked data, and if the owner won't move a floor that the data says is wrong, I have a termination right too.

That last part matters more than people think. If you only give the owner an exit, you end up managing a unit you know is mispriced and wearing the reputation for it. Whether a co-hosting agreement like this triggers any licensing requirement depends on your state and what else you're doing for the owner, so that's a question for a licensed attorney where you operate, not a template.

Approval per rate change is unworkable and I say that from the long-term side where the decisions are slower and owners still don't answer. Anything that needs a human response inside 24 hours cannot sit with an owner who has a day job.

Where I land is closer to lantern's. Floor exists, it's written against base rate, and it has an automatic override inside the near booking window. The piece I'd add is a minimum stay authority, because owners fight over price and then hand you a two night minimum in a market that fills on one nighters, and that costs more revenue than the rate ever does.

Solder, on your specific two drafts, the $165 one isn't automatically the worse deal. Ask that owner where 165 came from. If it's his debt service and taxes divided by realistic occupancy, that's a floor you can work with and price around. If it's what he saw a neighboring cabin listed at, you're going to spend the season arguing, and I'd rather find that out in January than in month four.