To help you master pricing skills we gathered the main five mistakes owners should avoid, creating their prices for rental business.
- Short-term wins priority
The short-term pricing strategy is quite a tricky tool. While it's in action, owners often don't think much about the long-term losses. High prices look profitable, but bring fewer bookings overall.
The short-term price increase can be used occasionally according to circumstances and competitive basis, but using this strategy owners should always be ready for flexible changes, if necessary.
- The competition based pricing
The competition strategy itself isn't a bad choice. But basing on it, it's essential to be sure that the owner looks at homes that are actually equivalent to his. Without having a clear understanding of whether that competition is really on a level playing field, better not to use competitive pricing methods.
- Pricing based on personal value
Every owner adores his property, because much effort and money are invested in it, during choosing, buying and furnishing processes. And then, often the property is overpriced, while the local market offers lower stay rates.
In this case an owner can evince the host's flexibility and diminish the stay price according to the competitive market or agree with the fewer bookings, accepting lower income in future.
- Ignoring market value
The problem here is that you may pay your price, but your average guest can't, even if the property is full of unique amenities. To avoid this situation owners should always reckon with market value, checking local rates.
To create an adequate price, you can compare an average price for properties similar to yours that don’t have special amenities with the average nightly rate for properties that have unique amenities. After that, you can set the right average value.
- No dynamic pricing strategy
If you don't have different prices for high and low seasons, you can miss a chance to earn more.
Be flexible and adjust prices according to different seasons and other calendar features. Make prices higher for the high season, when guests are ready to pay more and lower them for off-season.
Use these simple recommendations to prevent mistakes and to make pricing strategy more profitable, competitive and balancing. For more info you can visit our professional blog.
If you need any help with property management, please, contact us! We're always ready to help you with all rental business questions.