A guest network is a dedicated network that operates separately to your main network both wired and wireless.
While many devices can provide a “Guest Mode” it's not always fully featured, correctly implemented and secure.
This means that when wrong a guest network will allow other people to access either other users or your computers and devices so understanding the risks involved and having suitable hardware is vital to your security and reputation.
In many ways they start as a convenience, but if your a business or have people visit you regularly they quickly become essential for two main reasons:
You don't let people turn and and wonder around your home or premises, equally when letting people use your WIFI you don't want them having access to any devices, computers or servers you happen to have on the same network.
Equally just because someone had access once, does not mean they should keep that access forever and get free internet by sitting outside.
Your guests need privacy as well, not just from you but from each other. A common failing is when network guests can happily see other network guests.
Broadband isn't cheap, and you may have data caps, fair usage limits or pay per use type billing. Providing guest WiFi is a great thing to have but the reality is what your guests are doing over that WiFi directly relates to your costs.
Not only can a guest increase your costs by doing things such as streaming video, but they can also reduce the bandwidth available to other guests so while some might be able to watch the latest Film, other's might struggle to read their email.