If you want to set prices that ensure the maximum possible bookings, you will need to carefully consider factors such as running costs, location, exclusive outlets and focus on your market. Here are some general tips to help you set vacation rental rates:
- Market Research: Research the rental prices of similar properties in your area. Browse vacation rental listings on popular platforms to get an idea of the average prices in your location. Check average prices for vacation rentals, hotels, hostels, even campgrounds. If you want to be exhaustive, complement your local monitoring by comparing the rates in your area, with other similar destinations.
- Consider costs: Calculate your operating expenses, such as taxes, utility fees, maintenance, cleaning, and possible marketing costs. Make sure you cover these expenses and have an adequate profit margin.
I recommend creating your own financial template (I’m not saying a spreadsheet, because I don’t like them), in which you can keep track of all your vacation rental expenses. This would include:
- Electricity and water bills (you will have to set a higher rate in the summer months for expenses such as the use of the air conditioning or the pool pump that are used on a daily basis)
- Cleaning and laundry service
- You should also add a contingency budget for repairing damaged items.
- Season and Demand: Consider seasonal fluctuations and demand in your area. During peak seasons, such as holidays or local festivals, you may be able to charge higher rates. On the other hand, in off seasons, you could offer more competitive rates to attract guests. The high season for tourist beach destinations will differ from the high season for ski resorts, or city breaks, for example. However, even for beach destinations, Christmas is considered high season, just like school holidays.
- Features and Amenities: Evaluate the unique features and amenities your property offers compared to others in the area. If your property has extra amenities like a pool, a panoramic view, or is close to popular tourist attractions, you might justify higher rates. The more equipped your property is, the more attractive it will be to the public: WiFi, satellite TV, a well-equipped kitchen, and other extras that add comfort mattress toppers, extra towels, good quality toiletries, etc. They will offer an extra to your vacation home.
- Comments and feedback: Take into account the opinions and comments of previous guests. If you have positive reviews and high ratings, you could justify charging higher rates due to the quality and reputation of your property.
- Flexibility: Consider offering different rates for shorter or longer stays. Some guests may be willing to pay a higher rate for short stays, while others prefer lower rates for longer stays.
Remember that these are only general advice and you should adapt them to your particular situation. It is also advisable to consult with industry professionals or real estate agents specializing in vacation rentals for additional guidance specific to your location.