Guests especially looked forward to our corner gas fireplace. It has never had a problem until now. Won’t work. Had a contractor try but no luck. Repair co can’t come until Monday. Do I offer any compensation, and if so what and how do you do that? We are new at this and nothing has gone wrong til now, lol. Offer money back? A free night for next time? A discount on this stay? Or just apologize and hope they are nice about it? Advice requested!!!
Was the repair attempted by the contractor before or after the guest checked-in?
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Good communication with the guest is essential, of course. At a minimum, some “extra perk” would be recommended to help avoid the guest pushing for 50% off due to an “unavailable listed amenity”.
I had the dining table break (ugh!) during a stay where they were especially planning large nightly dinners. They moved it to the garage themselves (so embarrassing) and used a long folding table a nearby relative had (else I would have provided but they told me after the fact). They didn’t ask for anything. I gave them a $50 refund and dropped off a $25 dollar loaf of awesome quick bread from a famous local bakery.
Let me add, I may have done more depending upon their disposition. They were quite jovial and so happy with the compensation. They even extended their stay, 5 stars.
Sometimes you have to feel it out but it is best to be proactive in my opinion. The fact that you tried to fix it means something but a “I’m sorry” token/refund helps, especially if it’s an essential amenity for your listing.
I’ve sent warm cookies when I messed up the timer on the water heater, for example. I’ve had to do something “extra” 3 times in all but all guests ended up happy. That $50 was the only refund but I felt the dumb table was extra egregious and would have done more if they weren’t so cool about it all.
I don’t give any money back unless a guest has been seriously affected by the problem - the worst ever being the AC breaking completely in a South Florida summer. I refunded that night. Oh, I remember that I gave a one night refund because of a neighbour doing noisy construction.
In situations like yours, I give guests a gift card for a restaurant, saying ‘please have dinner on me - thank you for your patience’.
When you’re considering ‘to refund or not to refund’ remember that just about every hospitality provider has this to face this problem every so often. My dad was once in a London hotel when there was a bomb scare or a fire or something and the guests had to spend the early hours on the street in their pajamas. No refund was offered - and it was a posh hotel too. 
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Why not comp any extra night? So if they have a three day stay now they’re have the 4th night for free. Even if they don’t stay the night, it will be nice to have a really late check out.
I offered an extra night to make up for an issue and they were very appreaciative because it gave them another day and they checked out at 5PM and didn’t sleep over. It worked out great.
I wouldn’t refund. The bed didn’t break. The plumbing works. The light are on. It’s all good.
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I think you should refund a night and even let them cancel if they’d rather. Everyone has different priorities (the A/C for jaquo, the bed, plumbing and lights for Ken), but it’s very possible that your guests booked your place for the fireplace, if they mentioned disappointment to you.
A/Cs, beds, plumbing and lights are surely available at all of the other listings so the fact that those basic-needs things work seem irrelevant to me.
We have a couple of places booked in the next couple of months. I booked one place for the pool and the fireplaces and booked the other for their fireplaces, one of which is in the master bedroom. I will want a refund if the amenities that I chose the bookings for are not available.
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We found out it didn’t work when the guest called to ask how to get it to turn on. I sent a contractor friend over right away.
It worked fine last weekend and when we prepped so not sure what happened. Oh well!
Anyway THANKS ALL for your helpful responses! I offered them a free night which they appreciated. Grateful to have your advice and support!
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You are very nice. I probably would have refunded 25 $ or something like that. In one of my listings I have the wood fireplace listed as an amenity and 90 percent don’t use it. In my other listing I have 2 gas fireplaces but it’s warmer and I don’t mention them in the listing so I’m not sure if they get used.