How To Price Your Short-Term Rental
You’ve decided to get into the short-term rental business and have a property set up and ready to go. But now you have to figure out how much you will charge your guests per night. You know you have some fantastic amenities, but you don’t want to overcharge your guests and scare them away.
So, how do you figure out how to price your short-term rental? There is actually a process to doing it, and various types of pricing models you can choose from. But there’s no need to worry because we’re here to help you decide on the best one to use for your property. Continue reading to find out everything about pricing a short-term rental.
What to do first
You need to take a few steps before you consider using a pricing model to figure out the cost per night of your short-term rental.
Identify your expenses
One of the first things you want to do before you price your short-term rental is figuring out how much it will cost you. This includes everything from electric and water bills to paying people to maintain and clean the property when the guests aren’t there. The best way to do this is by putting it all on a spreadsheet and finding your overall monthly cost.
Once you know how much you have to spend each month to run your short-term rental, you’ll then have to figure out the minimum price you have to charge per night to make a profit. This most likely won’t be the final price you add to your listing, but it gives you a good idea, so you don’t lose any money.
Look at your competition
A great way to get an idea of what to charge the guests who stay at your short-term rental is by looking at similar properties and their pricing. It will show you what you can roughly get when you price your rental and use it as a framework for pricing your own property. This will include rentals of a similar size and amenities.
Remember not to compare yourself to your competitors, but instead, use this step to figure out the average amount you can get when pricing your property. Look at a wide range of different listing channels for the best results.
Find what sets you apart
Once you know what your competitors are charging, it’s good to figure out what you have that they don’t. Write down a list of your unique selling points, including amenities that are harder for guests to find. This can include a hot tub, trampoline for the kids, or indoor fireplace. It must be things that are not common on other listings.
These are things that will be able to increase your value, so if your property doesn’t have anything special at the moment, it could be something to look into. The best way to get ahead of the competition is to offer something out of the ordinary that gives the guests a unique experience.
Setting your price
Once all the preparations are in place, it’s time to figure out how much you will charge for your short-term rental. However, there are a few different pricing methods you can choose from:
Dynamic pricing is a relatively new way of pricing short-term rentals, but it is very effective in turning a good profit. It basically focuses on changing the prices of your property based on the season, any special events in the area, or any other surging reasons. It may even coincide with your bills and ensure you bring in more revenue.
The basis of this method is to have a solid pricing plan for the majority of the year when your guests can stay with you for an affordable price. However, when it is peak season, you will raise the costs significantly while also keeping the competition in mind. It helps you keep bookings high at all times while bringing in some good money.
If you don’t have a unique selling point for your short-term rental and there are a lot of properties similar to yours in the area, you may want to consider competitive pricing. This means you’ll have to put further research into the other properties around you and either match their nightly cost or offer it at a lower price.
When you opt for this method, you’ll need to always keep an eye on the competition and make sure you’re adjusting the prices as they are. The only thing you shouldn’t do is set your price so low that your expenses are higher than your annual profit. Instead, ensure you are charging a reasonable amount while still making money.
This pricing method isn’t used as much as the other two, but it is a great way to make more money. However, it can only work if you have a property that offers more than any others on the listing websites. In this case, you can afford to set your prices much higher than any others.
You will most likely get fewer guests, but the amount you’re charging can sometimes balance out with the times your property is empty. It also means you can spend more time on maintenance and looking after your guests when they are there rather than juggling multiple bookings after each other.
If mathematics isn’t your strong suit, and you need an extra helping hand in determining the pricing for your short-term rental, then Hospiria can help. We offer bespoke software to take care of all your management needs, including figuring out how much to charge for your property.
Our standard and premium tools offer a revenue management solution that uses the dynamic pricing model, helping you set prices throughout the year. It takes all the guesswork out and means you don’t have to update the pricing yourself when bookings start to surge.
Pricing your short-term rental can seem daunting, but it doesn’t have to be difficult with the right methods and tools. You just need to keep your expenses and competition in mind to ensure you stand out while making a profit. And with the help of Hospiria’s software, all the hard work is taken out of your hands anyway.
|Distribution via 40+ platforms including major, affiliate, select access* and niche platforms|
|Single property page - Manage all your listings from within the platform|
|Booking management - Fully synced Bookings list|
|Single & Multi-calendars - flexibly update your availability and see your properties all in one place|
|Performance reporting in one dashboard - see your key metrics by Company or Apartment|
|Dynamic pricing - Managed in-platform and powered by Pricelabs, to increase revenue through rate optimisation.|
|Enquiry management - Track, action and convert direct bookings in one place|
|Smart Availability Search - Match enquiries with available properties through smarter searches.|
|Automated customer communications - Customisable email templates for all your communication needs|
|Automated Scheduler - Aut-schedule your field activity inc. check ins, cleaning and maintenance|
|Deep third-party integrations - Connect your automated schedule to Breezeway, Keynest and more|
|Customisable pre-check in process - Check-in and out times, special welcome packages & upgrades|
|Deposit management - Track, amend and action deposits from Hospiria|
Our Service Support
Most companies just offer a technology. We offer a support service as well, taking care of everything from onboarding to reservation management.
Platform & listing management
Access to exclusive channels
Account management with all platforms
Host insurance through our specialist partners
Professional listing and expert optimisation
Pricing management from our experts
All payments handled
24/7 reservation desk
Customised pre-check-in services
Not ready for a demo yet?
If you want to see Hospiria in action why not