3 Pricing strategies to maximize your occupancy
This summer has undoubtedly been better than 2020, there is more confidence in travel and a lot of desire to vacation and although we did not reach the 2019 figures, we are getting closer and closer to it and to the much-cherished normality. This summer has been busy, many of the hosts may not have expected it, facing a great demand for their vacation rentals, and being immersed in a difficult management and reservation management, even managing to occupy the days that have remained in the calendar voids between weeks.
To overcome this, it is indisputable that every host must have smart pricing and revenue management strategies. It’s all about setting optimal rates and choosing the right minimum stay restrictions to maximize income. In this vein, the Rental United company has recently published what it considers to be the 3 main strategies that every Host must follow for better management and greater optimization of prices, to consequently achieve an increase in occupancy.
The three main strategies to follow to optimize prices and improve your occupancy are:
1. Adjust the settings for the minimum length of stay based on the reservation period
Rather than reducing the minimum length of stay for all of your properties at all times, we recommend that you try a more nuanced strategy. The most efficient way is to set different length of stay restrictions for different reservation windows. For instance:
Last minute bookings: minimum stay of 2 nights
Reservations of less than 30 days: minimum stay of 3 nights
Reservations of more than 30 days: minimum stay of 4 days
For example, when you see a 3-day gap between bookings that are older than 30 days, you might consider repealing the 4-day minimum stay rule you have to fill that 3-day gap. This will help you maximize your occupancy and make sure your rental doesn’t run empty on days when you could be making money.
2. Apply a premium or discounted rate to your days off
Strategically adjusting minimum stay restrictions is one thing. To fill your days off, you should also consider adjusting your rates. You can choose between one of two strategies: apply a premium rate or offer a discount. Which one you choose will depend on factors like the demographics of your guests.
For example, if you manage a pool villa and have a 3-day gap in the middle of the high summer season, you must apply a premium rate. In this case, your rental is likely to be booked because there are probably not many other options available.
In addition, this type of accommodation has a higher response cost and takes more time to prepare for the next guest. To ensure that you still make a profit on a 2-night stay, you should try to sell your days off at a higher price.
It’s also a good idea to offer a promotion when you decide to reduce your minimum stay at the last minute. Adjusting the price can help make the rental more attractive to guests and ensure that the days off are sold out.
3. Stay on top of your cancellations
During the times of COVID-19, last minute cancellations are a big concern for property managers. If a guest cancels their reservation, you may end up with a space on your calendar that you need to fill quickly.
If you don’t have much time left until your canceled reservation date, consider lowering your prices for those dates. You may have already received some money from the cancellation fee. Consider subtracting the cancellation fee from the price of your property rather than trying to sell it at the same price.
Guests who want to book less than 30 days in advance are probably looking for a good deal. By lowering your price, you are incentivizing people to book. And you are earning the same amount of money that you would earn if the reservation had not been canceled in last minute. It is a mutual benefit for you and the guest.
It’s also important to know which sales channels the cancellations are coming from and to work hard to get those dates rebooked. Usually this can be difficult to understand. But Rentals United Data Studio gives you the information you need.
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