How long has it been since you reviewed your listing prices? If it’s been more than a week or a month out, then we can most definitely tell you that you might be missing out on opportunities to be earning more from your property!
With increasingly stronger competition in the vacation rental market, you can avoid getting your drowned by getting some key foundations right. Here are some of the common mistakes hosts make when pricing their listings.
1) Setting the price too high early in the game:
Of course we know everyone will want higher returns from the get-go, but what many still do not realize is the fact that travelers still rely heavily on word-of-mouth and reviews for them to make a final decision. This means that if you are still new or have not received a booking, your listing still lacks the credibility that travelers seek.
If you are facing this issue, try pricing your property below the standard market rate for a chance to build up booking requests, leading to more reviews for your listing. Once you have gained more traction, it is still important to remain relevant and competitive, so you will still need to raise your prices accordingly.
2) Setting the same price for too long
It’s great that you are fully booked for the next few months, but are you missing out on greater profit in the longer term?
Popularity does not necessarily mean you are maximizing your listing’s earning potential. It could be a red flag that your property is being listed for too low and you may need to gradually start pricing it more competitively.
You may also want to consider setting different rates for weekdays and weekends…there’s a reason why hotels raise their rates on weekends, the demand is higher then!
3) Not staking out competitor pricing
In every business, it is critical to understand the market and your competitors. Research similar listings around your area and how much THEY are pricing their properties for. With this information, you will get a better sense on where your potential guests might be veering to and how to attract these guests back to your listing.
It’s not all about the pricing as well – learning from other successful hosts is the best way to improve your own listing. Take into consideration other factors like the amenities they offer, and how they have written their listing details.
4) Not taking advantage of Last Minute Deals or Special Discounts:
Did you know that HomeAway offers flexible pricing tools that enable you to customize your listing rates? Creating weekly or monthly packages may encourage longer stays among guests and a higher overall return for you.
Taking advantage of the Last Minute Deals or Special Discount tools, especially, is a great way to leverage your performance amongst the competition. It will boost your ranking up on the search result pages and gain you more exposure at the same time.
5) Ignoring the importance of travel trends, events and seasonality:
There will usually always be trends to travel demands in your area, so you might seriously be missing out on profits if you are keeping your rack rate!
It is important to adjust your pricing based on high and low seasons, special events happening in your city or town, as well as competition around your area. Special events like music festivals and sports tournaments can create a spike in demand and can even fetch up to 3x the usual demand.
However, it is also important to note that it’s not always about raising your prices – it’s how to price effectively to attract more bookings!
- Using a combination of nightly, weekly, and monthly rates allows you to create rate breaks for guests who stay for longer periods of time.
- Block out any dates you don’t want to rent on your calendar to ensure guests don’t inquire for those days. You can learn more about your calendar here.
Explore your pricing tools now!