When setting your pricing you must always:
offer value for money
know your ideal guests
then market your value for money property to them
1. Value for Money
Take this example of two holiday apartments. Apartment 1 is a one-bed basic apartment priced at £300 a week. It’s basic, no extras; what you see is what you get and it doesn’t look particularly appealing to the eye, although it is clean.
Apartment 2 is in the same block, also one-bed, has the same views, is just as clean and is the same size but is priced at £500 a week.
Apartment 2 offers more than “basic” amenities. Their attention to detail shines through. Thought and care has gone into how it is presented; the furniture is modern and matching whereas Apartment 1 is furnished with mis-matched items that have seen better days. The owner of Apartment 2 makes it clear to guests that she’s there to help them with their holiday recommendations (places to eat, where to visit, what’s on in the area). And she also provides extras such as a welcome hamper and guest toiletries.
Apartment 2 in real terms is more expensive than Apartment 1, but both apartments are offering value for money. Value for money for their guests and that’s key.
As both apartments achieve the same number of bookings, then owner 2 is earning a lot more than owner 1. Charging more doesn’t result in fewer bookings because of their different target markets.
2. Ideal Guest
The ideal guest or target market that each apartment is appealing to is very different. Those wanting a basic place to lay their head (Apartment 1), are maybe backpackers and will perceive Apartment 2 as too expensive and won’t be prepared to pay for what they see as expensive extras.
But this is of no concern to the owner of Apartment 2 as she not looking to attract the budget-end of the market. She wants to attract people who appreciate her quality and extra touches, who want to stay in a beautifully presented holiday rental, who want an owner who offers excellent customer service and goes out of her way to ensure her guests have the best possible holiday experience they can. This is exactly what her busy professionals will be looking for when choosing a holiday rental.
These guests will not perceive Apartment 2 as expensive. They value all the extras and for them these are worth playing for.
When setting your prices it’s so important to consider what your holiday rental is worth to your ideal guests and that means that you must know your ideal guest inside out. What are they looking for in a holiday rental? What’s important to them? Why are they coming on holiday? How can you help deliver that relaxing break that they so need?
Once you’ve identified your ideal guest you then have to market all your holiday rental has to offer, to them, and only to them. Talk directly too them, draw them in. For example your website needs to explain about the holiday experience you can provide in their language in a way that will solve their problems and offer the holiday that they are searching for. Your images need to reflect the fact that you are offering a “quality” product. They will now that what you are offering is right for them and will book with you as a result.
Increasing your prices isn’t about being greedy, it’s about charging what your property is worth to the right people.
Of course do your local research into the prices of holiday rentals in your area. But as an owner you are unique and therefore so is your holiday rental, so how can you compare directly to another holiday rental? You can’t price yourself totally out of the market but when increasing your prices don’t be afraid to be the most expensive in your area, if that’s what your holiday rental is worth.
So if you know that your prices are too low and you deserve to charge more per booking. Then do it. Be clear on why you’re increasing your prices and stand proud behind your pricing. No apologising.
You know that you offer value for money and yes guests could find a cheaper place to stay but you know that the guests that are right for you aren’t simply looking for the cheapest option. They will value you and pay your increased prices.
As Jennifer Aniston says “You’re Worth It!”