Countess richard - earlier you wrote 'They are your guests, after all. Unless you are viewing them as the hired hands'

Depends on what you mean by 'hired hands' (usually a derogatory term) but if they are working for pay then they are not guests but employees. Yes, treat them well, courteously etc. as you would a guest but you cannot have it both ways.

Also in this equation must be included the audience (you did forget them did you not?) I will attend a club and sing (free) to support it. If the paid guest is someone who's style, songs etc. are not to my taste I will still attend the club to support it. If the door fee is double (?) then I will stay away on those nights. Most other audience members, singers and organisers of other clubs act the same way. I know this because when a particular club does as you suggest, I find later that none of us attended. Thus, the club loses audience figures but not revenue. Unfortunately, without an audience the club will fold. Maybe you will attend and entertain yourself.
Also, the fact that someone practiced for years, gave up their day job to play music does NOT give them the right to tell me I MUST like them and pay for the privilege. I have been in constant employment in heavy engineering for 42yrs and still have to earn my pay, not expect it because I have tenure.
I have sat in 'fun' sessions & singarounds with various 'names' (Vin Garbutt, John Connelly, John Wilson, Pete Betts etc) because they enjoy the music. Most artistes I have met / booked / sang with in sessions etc are reasonable, nice people who understand how our 'world' operates. Do you?