Five Strategies to Minimze Discounting Vacation Rentals

Five Strategies for Minimizing Discounts and Maximizing Rental Rates Dr. G. Krishnan [email_address] Karen du Four des Champs [email_address] so many bookings, you’ll need more homes

Why do owners undersell themselves?
Owners discount to close a deal when there are few renters and many options.
This typically happens in the off-season.
Owners can’t afford to let them sit vacant.
Owners may compare themselves with lower quality properties.

Do you need to discount?
There are times you need to discount to close a deal.

Strategy #1
Don’t discount, but give something else to close the deal.
Coupons to attractions/restaurants
Keep the value of your rental high

Strategy #2 - Build a brand
Why do people pay more for:
Lexus, Cadillac, Mercedes?
Pay more at Nordstrom

A custom website helps build a brand
Instead of:
http://vrbo.com/12345
[email_address]
You want
http://MiKosGuestHouse.com
[email_address]

Most Listings look like this

Instead of like this!

These features build a brand
A name for your property
Slideshow of your photos
Virtual Tour of your property
Videos
Maps and Attractions
Blogs
Pricing Calendar that automatically calculates your prices
Automatic Customized Emails to your renters

How does building a custom website help?
Takes the renter from a listing site directly to your custom website.
Keep him on your site so he can’t comparison shop.
Renters will pay more for a property that looks professional online.

Why do renters prefer a custom website?
Annie & Dan from Hawaii
“ One of the main reasons we booked MiKo’s Guest House was because it had a custom website with its own domain, custom email address, lots of photos and a video. We felt comfortable that this was a legitimate business.”

What if I already have a website?
Vacation Rental Websites should have:
Integrated Calendar
Maps & Local Attractions
Videos & Virtual Tours
Slideshows
Online Payments
Blogs

Strategy # 3 Rock your way into blogosphere!

Strategy #4 - Experiment during peak seasons
Test higher pricing
You don’t need to be on par with everyone else to rent your property
Dr. David Fischbach, Beachfront Only Vacation Rentals successfully raised his price three times over 2 years during peak times

Strategy #5 - Yield Management
Different prices for different customers at different times, with a perishable resource
Hotels
Airlines
Car rentals
Robert Crandall, former Chairman and CEO of American Airlines, has called yield management "the single most important technical development in transportation management since we entered deregulation

You can do the same for your vacation rental
Why did Dr. Fischbach start using Yield Management?
He felt he was leaving money on the table.
His peak season was fully booked. His off-season was not.
By increasing the price during his peak season, and changing prices dynamically, he increased bookings and profits significantly.

Finally …
Make it easy for the renter to do business with you.
Give them all the information they need so they don’t have to dig it out of you.
Create an attractive and powerful online presence so you are pre-selling the renter.
Be professional and prompt in responding.
Blog about yourself and your property
Get started now!

Five Strategies to Minimze Discounting Vacation Rentals

by ganapathykrishnan on May 12, 2009

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