15 tips to creating your holiday rental pricing structure. Wake up to booking.yeah
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1 15 tips to creating your holiday rental pricing structure Wake up to booking.yeah
2 When your goal is to achieve maximum revenue from your holiday rentals, there is a variety of variables to consider. For example, 100% occupancy at discounted rates may only generate the same revenue as 80% occupancy at full price. 01 So, the objective is to set your rates at a level which is attractive to guests but also close to full price. To help you with your pricing strategy, we ve put together the following tips
3 Locations 02 Holiday rental rates are typically affected by their convenience - and this convenience is determined by their proximity to local amenities and attractions. For example, is the property close to local shops, restaurants, or tourist spots? If it is, then the rates will be higher than competitors which are not. However, if your property requires travel or the use of public transport to visit local amenities, then this will have to be reflected in the rates too. Remember though, your marketing can play a big part. So, if the property is on the outskirts of a town or city, it can be referred to as quiet, relaxing, and great for those looking to escape the hustle and bustle of a city-centre stay. Tip 1: Review your property s proximity to local amenities and attractions (this may simply be local beauty spots). Tip 2: If your location requires guests to travel, be honest so they don t get a nasty shock (and leave a bad review). Tip 3: Use your location to your advantage, and market it accordingly.
4 03 Ratings and reviews Obviously, a property with a pool will be more expensive than a studio apartment, however when it comes to properties with similar offerings, it s all about services and reviews. For example, do you provide free Wi-Fi? What about laundry equipment? Is there free tea and coffee in the kitchen? This level of service will help you achieve superior reviews from guests. These reviews (such as an average of 4 out of 5 stars) can then be used to justify charging higher rates than your competitors with similar properties. Tip 4: Look to offer amenities and services that your competitors don t. Tip 5: Ensure your service levels are second-to-none and ask guests to provide reviews on their stay. Tip 6: Use reviews and ratings to set rates in relation to your direct competitors.
5 The Competitors way to anyone s heart... Save tired and hungry guests from having to head out to the local If the direct competitors in your location are charging 100 per night, supermarket for food and drink the minute they arrive by leaving them you can t charge 500 per night (well, not if you expect to get bookings). a few staple items. The fact is, creating a pricing structure is Whether it s a carton of milk in the fridge, sachets hugely dependent on your competitors and the of coffee, tea and hot chocolate by the kettle, or a market conditions. Is your competition running loaf of fresh bread in the tin, these are the kind of promotions and deals to achieve more bookings? gestures that will really help to show that you have Are they seeing high occupancy rates while charging gone the extra mile. full price? Ultimately, their pricing behaviour and occupancy levels will play a huge role in your own rate calculations. Staying abreast of their activity may be a Or if you want to go all out, you won t go far wrong by time-consuming process, but failure to do so leaving a chocolate on someone s pillow or a bottle of could result in you missing out on bookings chilled prosecco in the fridge. and revenue. Tip 7: Identify the top 5 direct competitors in your local area. Tip 8: Review their rates and monitor their discounts/ special offers. Tip 9: Devote time to Tip regularly 7: Ask review ahead rates about in food the allergies marketplace, and preferences and price your to really properties bring accordingly. a personal touch to the mix Tip 8: Remember not everyone is a caffeine-fiend so offer herbal tea as a thoughtful alternative. Tip 9: Save your guests from having to root through cupboards and lay out some side plates, spoons and mugs before they arrive.
6 Demand and local activities 05 The rates you set during the depths of winter will be lower than those set for the summertime. Similarly, your mid-week rates will be cheaper than your weekend prices. This is, of course, due to customer demand. The fundamentals of business tell us that the more customers want/need your product, the more you can charge. Now, what if there was an activity or event taking place in your town? Surely, this would be a great opportunity to increase your bookings, and your revenue. So, make sure you are fully informed about all concerts, gatherings, festivals, and any other event in your town over the upcoming 3-6 months. Tip 10: Be sure to amend your rates based on the season and day of the week. Tip 11: Locate a comprehensive list of events taking place in your town (e.g. speak to local venues about bookings). Tip 12: Set your rates according to local activities if an event is taking place, rates can be higher.
7 Overheads and flexibility 06 There can be a desire to drop rates in order to compete with other holiday rentals in your local area. However, in order to be flexible with discounts and promotions, you first need to know what your minimum rate can be. So, before doing anything related to rates and pricing, first calculate your overheads and costs. For example, insurance policies, electricity bills, water costs, Wi-Fi, the cost of cleaners etc. Only once you have this can you effectively add your profit margin and determine the ideal room rate. From here, you can become flexible with rates while still ensuring you are generating some level of profit. Failure to carry out this step could result in holiday rentals achieving high occupancy rates, but barely generating enough revenue to cover costs. Tip 13: Clarify all costs associated with the property and determine the minimum rate. Tip 14: Be flexible with pricing to attract more bookings but never lose sight of profit margins. Tip 15: Remember, being booked all year round at discount prices could generate less revenue than being booked 80% of the time at full price.
8 The easy way Believe it or not, there is a very simple way to avoid a lot of the time and effort mentioned throughout this guide. At Booking.com, we care about the success of our partners holiday rentals just as much as they do, which is why we created our RateIntelligence service. This easy-to-use tool provides property owners just like you with information on competitor pricing and an insight into the market. It will help you make quick decisions on which rates to offer and optimise your pricing strategy. You ll have access to Daily insight into the market in your area for up to 90 days in advance Calendar alerts for upcoming local events A display of your top five competitors rates A simple calendar showing how popular your market is with Booking.com customers And, once you ve decided on your rates, receiving payment couldn t be easier. For example, if you choose, we can take receipt of payments directly from your guests and simply transfer your revenue to you (minus any commission) simple. So, if you re looking to review your pricing and payment strategy to take your holiday rental business to the next level, let us help you get there. We ll market your properties to millions of global travellers, translate your property details into more than 40 languages and provide you with a variety of tools to help you boost your bookings. Open your holiday rental to the world today and register your property with Booking.com now. Join.booking.com Sign up here
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