Having an on-point pricing strategy is the key element of your vacation homes’ success.
You have to set a price that is fair for your potential guests and profitable for you.
A correct pricing strategy will help you in maximizing profits and attracting guests.
Let’s look at three common pitfalls that can ruin your pricing strategy and tips on how to avoid them.
- Neglecting to assess market demand
Not tracking the popularity of your rental in your market, means you’re putting yourself in a loss.
Having a set price that never changes all year round means losing potential revenue so get rid of your static pricing model – it can make your listing less attractive to potential guests who are looking for a competitive price.
Use a dynamic pricing solution that adjusts your rates automatically based on market trends, demand data, and on real-time consumer search data.
- Focusing only on the competition
It is tempting to always keep lower prices than competitors, but this approach lowers prices below what is profitable and reduces baseline expectations.
It creates a dangerous cycle of needing to lower prices further to remain competitive. Know what your competitors are charging but don’t solely base your prices on their rates. Unique features, location, operating costs etc. of your vacation home are different from others, so your pricing should reflect that.
Focus on your rental’s unique selling points and use them to justify your pricing.
- Ignoring seasonality
Not taking seasonality into account can have a significant impact on your ROI.
Learn to charge more during peak season when demand is high and guests are willing to pay a premium and lower your prices during the low season to attract guests and stay competitive.
A proactive pricing strategy is essential in running a successful vacation home business, eventually maximizing your revenue and occupancy rates.
Let’s discuss more….give us a call today!
