It’s an inevitable fact of the vacation rentals industry that booking rates vary with the seasons. Sometimes you’re so busy you have to turn guests away, others you’re considering standing outside your property with a big net to grab passersby! The key to capitalising on these trends is to make sure you set seasonal rates. By being smart with your pricing you can optimise both your occupancy and your revenue.
Something that is especially needed now, when reservations are increasing significantly and hosts need to adapt to booking surges.
Travellers are asking for more flexibility when they make a vacation rental booking. Adding seasonal prices will allow you to adapt to the flexibility of travellers, who are increasingly willing to travel anytime, anywhere.
This article will explain exactly what seasonal pricing is, why it’s important to set your prices seasonally and how to do it effectively.
What are seasonal rates?
In simple terms, seasonal rates are those that deviate from your standard basic price during certain times of the year or during particular events. For example, you might charge more for your beachfront property during the peak of summer due to high demand, but drop your prices in winter to encourage more guests. You might also have particular local events that cause demand to go up, for example if there’s a popular concert or sporting event nearby. These might not be regular events, but it’s a good idea to add a short season during this time to capitalise on the increased demand and maximise your revenue.
Why should I set seasonal rates?
It might sound obvious, but charging the correct price for your property is a vital part of running a vacation rental business. Keeping the same prices all year round might make your life easier, but you’ll quickly find that your occupancy or revenue is unlikely to be performing as well as you like. There’s no point charging full price for a ski chalet when there’s no snow after all! Similarly, if your local area is seeing a lot of demand then low prices might increase your booking rate, but you’ll be missing out on the extra revenue that competition for places creates.
Many rentals websites don’t like it when properties don’t have seasonal rates. This is because when seasonal rates haven’t been updated properly properties can get booked at the wrong price. This means that property managers end up cancelling bookings, which isn’t good for anybody! Because of this, some rentals websites will refuse to host listings without regularly updated seasonal rates. That’s why Your.Rentals strongly encourages property managers to make sure they have seasonal rates for at least the next twelve months to make sure they only receive the bookings they actually want.
How do I know what seasonal rates to charge?
Knowing how much to charge can be tricky. Getting greedy during high season can backfire and reduce your occupancy, as guests seek out more reasonable prices from your competitors.
Your competitors should actually be your first point of reference to determine what prices you should be charging. Do a quick search of similar properties in your area for different dates, and see what the typical pricing structure is. If you think your property is better than theirs, you can justify higher prices (provided you make your superiority clear in your listing!), if not you might need to consider dropping things down a little.
Many property managers set their pricing by calculating their intended revenue – how much they want to make from their property over a given period of time – and working backwards. Once you know how much you want to earn, you can figure out what your prices need to be by taking into account fees & commissions, and the likely demand from guests. Thus you might feel a bit more comfortable dropping your prices in quiet periods because you know that the next season will more than make up for it.
At this moment, besides the factors that we have mentioned above, it is very important to be aware of the current changes in the market. Being informed about the latest trends in the demand will put you ahead of your competition. The desire to travel is more present than ever and the bookings are growing fast as the summer approaches. You can find more information about the current trends in the market and how to set your prices to beat your competitors in our Webinar on-demand from Spring 2021.
How do I set my seasonal rates?
Because we believe seasonal rates are really important, Your.Rentals has made it super easy to set and adjust your pricing to suit your own personal preferences. If you’re already using Your.Rentals, just go to your listings page to add or remove seasonal rates.
We strongly recommend making sure you’ve got seasonal rates set for at least the next year, and preferably longer. Some rentals websites allow guests to book up to two years in advance, so the more accurate your pricing is the less likely it is that you’ll have to cancel a booking.
Nevertheless, as we have mentioned before, the vacation rental market demand is changing constantly. Therefore, there is another option that will assure the maximum profit for rental professionals. This is to review the situation regarding Coronavirus restrictions, booking demand, and competitor’s prices and adjust your rates accordingly every once in a while. Some property managers adjust their prices every single day. We’d recommend checking your rates at least once every two weeks.
At Your.Rentals we care about our property managers generating the maximum profit, and in addition to introducing a tab to easily add your seasonal prices, we have also included Guest Booking Options. This new upgrade allows hosts to adapt to the flexibility that guests are looking for.
Offering Mutiple Guest Booking Options means more adaptability, and more opportunities to generate profit. It basically consists of adjusting your rates according to the cancellation policy that the guest wishes to book. Andrew Martin, founder and CEO of Your.Rentals explains everything you need to know about the new feature here.