Setting Rental Rates

There are thousands of holiday properties advertised online, both on HomeAway.co.uk and other sites, so you want be competitive. If travellers are in a rush to book something, they most likely won’t have time to “call for rates”. Travellers researching holidays online want an immediate view of what the price will be.


Keep it quick and simple by following 6 easy steps:


   

1. Keep rental rates clear, simple, and realistic. With thousands of properties throughout the world advertised on HomeAway.co.uk, you can quickly view a number of properties that are similar to yours and determine a competitive rate. Don’t forget to look at hotels too; after other rental homes, these are your next biggest competitor.

2. Keep rate bands simple: six or seven should adequately cover different seasons.

3. Be sure to include weekly AND nightly rates where appropriate, as most travellers are used to dealing with hotels, which price by the night, and will use this as a comparison. If the nightly rate you are considering for your home is higher than the cost of accommodating the same group size in a similar standard hotel, you need to consider if your amenities, location etc… will justify this, in the eyes of travellers.

4. The less expensive property of two apparently similar properties will most likely be booked first. If filling your bookings early is important, quote slightly lower rates.

5. If your rate is higher than other properties in your area, be sure that your photos and copy communicate the value of a higher price, for example: better location, more comprehensive facilities, extraordinary quality of furnishings, or other special features.

6. You can also start the season with higher prices and then reduce them later in the season, or run special offers at any time. Refer to the HomeAway.co.uk Guide to Special Offers for more details and pricing ideas.
 
 
   
 

Determining your rental seasons


Most holiday markets have at least three seasons (peak season, shoulder or mid season, and off-season); however, some can have up to six or seven distinct seasons and others have just one year-round rate. If you're new to renting, your best bet for determining the right seasons for your home is to research the rates of other holiday properties and hotels in your area. When researching rental rates, note what other owners in your area are charging for specific dates, paying particular attention to minimum stay requirements and rates for special holidays, such as Christmas.

Setting specific rates for each of your market's rental seasons, as well as for major holiday weeks, will likely increase your overall occupancy and rental revenue. While there are no hard-and-fast rules for choosing rental seasons since every market is unique, here's a general overview of the three most common seasons and holiday pricing:

Peak season
Most holiday markets have a peak season of around 10 to 12 weeks. Since this period is generally in such high demand, you can usually charge your top rate for these weeks and set the requirement for a minimum stay of 1 week.

Shoulder season
The shoulder season tends to run right before and after the peak season. These weeks can be a bit harder to book than peak season, but easier than the off-season. Therefore, you may need to lower your rates to around 60 to 75% of your peak season rate (look at what sort or reduction others in your area implement, as a guide), and also consider reducing your minimum stay requirement to two to three nights in order to provide more flexibility for travellers.

Off season
The off season will be the time of year when the weather is less-than-ideal for your market’s main outdoor attractions (be this beach, or ski), although there may still be alternative activities or benefits to holidaying there at that time that you can market. The key here is flexibility and big discounts. Your typical rent at this time may be 25 to 30% of your peak season rate and now is also the best time to experiment with special offers and reach out to past guest. You also need to remain flexible with your minimum stay, keeping this at two to three days.

Holidays & Events
Many travellers plan their trips around major events or holiday periods; for example a festival, sporting event, the school summer holidays, or Christmas and New Year, so since these are in such high demand, you can sometimes charge a bit more for them. In the case of the school summer holidays or Christmas though, this will also depend on if the weather and facilities of your destination are appropriate and appealing at that time of year.

Before setting your rates, sketch out a rough calendar for the year that includes:

   

Major holiday weeks, such as Easter, Christmas and New Year
Bank holidays, many travellers now take off some extra days and plan trips around these  dates
Religious holidays
Other holidays, such as Valentine's Day, Mother's Day and Father's Day
School breaks; these are easy to research online
Annual events in your market, such as festivals, sporting events, Christmas or other special markets, consumer or trade exhibitions etc...
 
   
 

If the conditions in your market (i.e. weather and facilities) are suitable during these special holiday periods, you may be able to charge up to 200% of your peak rates. The key, again, is to check what others in your area are doing too.

The Bottom Line
…literally! – Don’t make the mistake of either under- OR over-pricing your home and losing out on potential income by getting your seasons and prices wrong.



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