December 9, 2019
Are you maximizing your booking opportunities during the holiday season?
For many properties, this “shoulder season” offers the opportunity to bring in much-needed revenue between peak seasons. Setting prices during this time is a nuanced process. You want to be competitive and understand the demand in your location, however, if you price too low, you’ll lose rental income. Conversely, if your price too high, travelers will look elsewhere.
If you hit the sweet spot, you’ll be rewarded with bookings, at higher than average rates that will translate directly to your bottom line for the year. The tricky part is finding the sweet spot!
Here are some tips that can help you to set the perfect holiday rates for your properties to maximize income and minimize missed opportunities.
During the Holiday Season, Pricing Changes Based on Location
Every year, prices climb as the holiday season begins. As millions of travelers work to secure train and plane tickets and accommodations for their annual pilgrimage, car rental rates increase, gas prices rise, and hotel room prices climb. Vacation rentals are no different. Here are the average vacation rental rate increases for the season:
• 35% increase for the Thanksgiving Holiday Weekend
• 56% higher rates for the winter holidays – Christmas and New Years
• 20% higher for Presidents Day weekend.
The degree in which your rental rates may increase will change depending on how strong the demand is for your location. These rates can vary widely with prime holiday vacation destinations like the Colorado Ski areas seeing increases as high as 250% during this prime time. The bottom line, when it comes to adjusting your holiday rental prices, there is no “one-size-fits-all” solution.
Let’s compare two popular holiday destinations so you can see the range and variation in holiday rental rates.
Colorado Ski Areas:
• 50% higher for Thanksgiving
• 250% increase for the winter holidays
• 200% higher for Presidents Day weekend
• 25% higher for Thanksgiving
• 45% increase for the winter holidays
• 15% higher for Presidents Day weekend
As you can see, ski area rates can experience strong surges as demand increases during the winter months, especially around the holidays. Florida, and other popular warm-weather holiday getaway destinations, also experience an increase in demand over the holidays, but the increase is much less than ski areas.
Location is a major factor when it comes to holiday pricing.
Consider Property Type & Size When Setting Holiday Pricing
Property type and size are two additional factors that can have a huge impact on your nightly rates during the holiday season. For example, ski-in, ski-out homes that can accommodate large groups book faster than one-bedroom condos in the resort town.
In coastal areas, a two-bedroom beachfront condo might attract more attention and command a higher rate than a 5-bedroom home inland. So, if you’re an owner or property manager who prefers to book sooner, rather than later, you may want to look at your local market and price range, and price your property more towards the middle of the market to secure a booking earlier in the season.
Timing is Everything
This brings us to another important factor to consider, “timing is everything” when it comes to holiday pricing strategies. For example, 75% of Thanksgiving bookings are made within the two months prior to the holiday, whereas 56% of Christmas/NYE bookings are made over two months in advance.
The bottom line is you need to closely examine your local market trends, your properties, and use your prior rental experience, to establish the best pricing strategy for your properties and location.