Bookings are beginning to recover steadily. According to AirDNA, vacation rentals bookings skyrocketed by 127% after reaching the lowest point in late April.
While the restoration is on the way, it is hard to just use the same nightly rates you place for your vacation rentals before COVID19.
The way to price your vacation rentals at the right level and strike a balance between occupancy and revenue is harder than ever. In this article, we’ll discuss some crucial things to note and share our recommendations.
Why is it hard to price your vacation rentals after the coronavirus pandemic?
Pricing a vacation rental is always a blend of science and art. If you price your vacation rentals too high, you won’t be able to sell your room. If your rate is lower than average, you will miss out the profit or even suffer a loss.
The coronavirus pandemic has just added more complexity. We see a slip in bookings from March until April. Stepping into May, however, bookings start to recuperate.
But how to establish the ideal rate to take advantage of the recovery is still like an experiment for many vacation rental managers. After all, the uncertainty of whether there will be a second wave still exists. This makes it more difficult for property managers and hosts to set their pricing strategy.
What should be considered when setting the price?
Domestic travelers have different price acceptance levels. Resources say that booking are yo 65.8% for travel in the same nation, up from 25% in pre-COVID19 time. The demand for international travel will continue to change to domestic travel.
As such, property managers should take note that the acceptance of price levels for individuals from different countries are varied. For example, guests from the US are inclined to spend more than their Spanish counterparts.
If you are in charge of vacation homes in Spain, you may want to set a lower price this year to attract domestic holiday seekers.
Travelers are more prudent in spending
Because of job loss or a more uncertain economy, travelers are, in general, more prudent in spending even if they are eager to travel again. So you may price your short term rentals in a competitive way. It’s better to start at a lower price than last year.
That said, if you are not going to have a price cut in your pricing strategy, it’s good to highlight the free extras or amenities you provide.
Length of stay will be longer
According to booking data, people are booking for 4.6 nights average before COVID and now 5.6 nights. With a longer length of stay, you could think about adjusting your daily rate or offer a discount to attract guests.
New COVID cleaning logistics are required
Travelers’ expectations of cleaning and disinfection are much higher. All the extra cleaning work should not be forgotten in your own expenses. Price your holiday rentals in a way to reflect the cost or simply add it as a cleaning fee in your listing.
Assess your competitors’ rates
One thing that holds true no matter whether there is Coronavirus or not is to do your research and check how much your competitors charge for rentals similar to yours. Keep yourself competitive at all times.
Conclusion
With many nations gradually opening their borders, the bookings should come back steadily. Having the right pricing strategy will enable you to stay ahead of your competitors