When listing Caribbean vacation rental property, setting a price can be one of the most difficult decisions that owners face.
You want to find the sweet spot to gain the most profit and so your property is consistently booked, too. This is easier said than done, which is why clients call on a vacation rental specialist, Shore Concierge, for help.
To help you set the best price possible for your property, we’ve listed five common mistakes owners to avoid when pricing your short-term rental.
1. Not knowing your market
It is easy to misjudge the value of your property because it is personal to you, but the secret of success is familiarizing yourself with the local market data. For instance, how strong is the tourism sector, and how well is the local economy performing? Combine that with in-depth research of your local market and other nearby vacation rental properties. It is vital to check out their pricing and occupancy levels around the year. This will help you determine your optimum fee structure.
2. Overpricing
Everybody wants to make as much money on their property rental as possible. However, this can work against you. If you price your property too high, your occupancy rates will fall, and you can end up with less profit simply because you weren’t able to rent out your property consistently. It can be a common problem for owners to have their vacation rentals fully booked at the weekends but vastly under-occupied during the week when demand is often 30% less. Whether it’s weekdays or off-season, it is important to make sure you aren’t overcharging for your home.
3. Underpricing
On the flip side, it is possible to underprice your property. If asking for too much on weekdays is a problem, charging too little at the weekends or peak times is also a problem! If you are finding yourself booked out every weekend, this could be a signal to test the waters and raise your fees. You can increase your prices in slight increments until you find the sweet spot. If the booking slows at a particular spot, drop your price slightly to see what response you get. Also, consider how much you should raise your rates for public holidays and during special events. An increase of $10 a night may not seem like much of a win, but over a year, it can add up to $1000s that you could be earning. Small margins can make all the difference.
4. Not having a weekly and monthly rate
There can be a world of difference between peak holiday rates and out-of-season returns, so you will need to examine your rates, week-by-week, and month-by-month. For longer stays, you should also offer weekly and monthly rates. Booking your home out for longer periods gives you consistent income and eases your workload for renter interactions and maintenance. This may also open you up to a different target audience and demographic. Many owners have looked at attracting longer-term rentals during the COVID pandemic to cover for times when tourism restrictions were in place.
5. Not using dynamic pricing
Dynamic pricing can help to increase your profits by being flexible and taking advantage of every opportunity to maximize your returns, but it does mean you need to understand your local market, be flexible and constantly adjust to demand. Fortunately, Shore Concierge provides expert analytics, advice, and assistance to help you analyze the market and adjust your rates. Between different seasons, local events, and holidays, there can be quite a difference in pricing structures and occupancy rates. You can raise your revenue by as much as 30% through dynamic pricing, so it is worth the time and effort! Get a feel for when your most popular periods are and be sure to set your prices at the most profitable yet competitive rate.
Shore Concierge can take care of all aspects of managing your vacation rental, including pricing your property. If you’d like to know more, go to https://www.shore-concierge.com/.
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