This is a concept that you have to understand. Doing all the right things can really lead to more bookings at better prices. But I would enter the market at or below the market, and then work my way up the next season. Being booked all year at reasonable prices is better than being half full at higher prices.
If you are new to this market or your vacation rental is just being listed for rent and you have no repeat business, we suggest you come into the market on the lower end. That does not mean you are giving your rental away. You have to do some research of your competition.
Let’s say you have a 4 bedroom cottage. There will be plenty of your neighbors’ listings to view. So finding a unit that is similar online should not be a problem. You find plenty of comps, they are priced at about $2700 to $3,500 during the peak season. They seem to be doing pretty well. You can view the online calendars to see how they are booked up. But do not rely on those 100%. Many owners do not keep them up to date.
So this is the first year for your unit. You have a few months till summer and you have no repeat business as this is a new purchase for you. I would price your unit at $2495 for the peak weeks. This will look like a deal to most prospects, you can start taking bookings now and build up a client list.
Pricing your vacation rental is one of the first steps you need to take to be successful. If you are too low, you will be full but lose out on some income. Too high and you could miss out on bookings and have a vacant unit. So what are you to do?
If you are doing the proper amount of advertising, you should have no trouble getting some business. Here are some other things you need to consider to get a competitive advantage on your competition. By using online reservations and online credit card processing you already have an advantage in the vacation rental by owner world. So you will be able to take bookings faster and easier than the other vacation rentals listed online.
This means you are the path of least resistance. More people will be attracted to book with you since it is easy, fast and convenient. Who wants to wait 7-30 days to mail documents back and forth? They want to book a vacation now!
Add this to a great slide show of your vacation rental, and a google map showing the exact location. So now you go into your next season with a list of past guest, you email them about the new season and they want to come back to stay with you since it was easy, they loved your rental and you stayed in touch. Now you can raise your prices to at or above the market. Now your rate would be at $2,795 per week in the prime time.
Using all the tools that you need can make a huge difference. If your competition does not put the time in that you do, you will win.