As a manager of bnbs, I spend a lot of time looking at rental prices. Once you have a great place for your guests to rent, your prices are one of the main variables that decide whether or not it stays booked. Pricing is much like fishing, and there a several questions you need to know the answer to before you put a line in the water. Who is my ideal guest? What is important to them? How is a weekend guest different from a weekday guest? What’s my price floor? This last question is very important because there’s a point at which you begin attracting guests who may end up costing you more than it’s worth to book them.
Once you know the answer to these questions, it is important to understand that the most successful vacation rentals don’t “set it and forget it” with regard to prices. There’s always work to be done. One of the biggest mistakes I see owners make is setting a flat price for their rental.
I suggest an inverse bell curve model as the most successful pricing model. Weekends will always be your premium price. Thursday and Sunday nights should be your second tier and then Monday through Wednesday should be your lowest price available. The larger your space, the more variance you should have between these price points. During the week you aren’t generally going to be attracting large groups of guests. The weekdays are generally going to be business travelers and couples. Where are they looking to stay? Generally a one or two bedroom place, but if you have a larger space, you’ll want to compete with those one and two bedroom prices!
In structuring your prices over time, charge a premium for booking far in advance. Being booked 4 months out is not necessarily a sign that you’re doing things right, but more often a sign that your prices are too low. You want to be booked for the month ahead and 50-70% booked 2 months out. Set your highest price for the farthest date out on your calendar and your lowest price for the date closest to the present. You’d also be amazed at the bookings you’ll get if you keep adjusting prices as unbooked dates approach. Don’t tell yourself “it’s just not very busy this month.” Work at it. Lastly, make slight adjustments. Decreasing your price by even $20 can sometimes be the trick.