Defining holiday rental pricing – making it easy for owners
Pricing models can become quite complex, so we here outline some simple way to implement the pricing in the way you want.
Simple weekly pricing
If you only rent out weekly, then just define a price period and set the weekly rate. Define the minimum nights as 7.
Short breaks with percentages
If you allow short breaks, there are two possible approaches using percentages.
When you define the percentages in the main screen, these percentages are then applied to any weekly price defined in a price period. The percentages are fixed for all price periods, but you can adjust individual break prices in the price period detailed screen if you wish. The percentages are just used as an initial default.
The first method uses a cleaning fee and a fixed price per day.
Set the percentages for short breaks to 14.3%, 28.6%, 42.9%, 57.1%, 71.4%, 85.7% for 1, 2, 3, 4, 5 and 6 day breaks respectively.
Then set a cleaning fee.
Each short break will then have equal day rates, plus a cleaning fee.
For example, if the weekly rate is £1400, and the cleaning fee is £100, the price for short breaks will be £200, £400, £600, £800 , £1000, £1200 plus £100.
The second method is often more realistic for most holiday home owners. Set the percentages balancing the likelihood of filling gaps and offering good value to the guest. For example, if a guest wants only 6 nights, then it will be almost impossible to fill the extra night, so the price for 6 nights should be the same as 7 nights.
For example, if the minimum break is 3 days, then set 50%, 60%, 75%, 100% for breaks of 3, 4, 5 and 6 days.
Using the above weekly price of £1400, this then gives short break prices of £700, £840, £1050, £1400 for 3, 4, 5 and 6 day breaks.
Many holiday home owners have special weekend prices. The first step is to define which days are considered to be a weekend – it may, for example, be Saturday and Sunday, or may include Friday, or include Sunday, or may reflect different religious traditions.
Next, define the minimum nights. These can be defined differently for mid-week and weekend breaks. For example, it may be a minimum of 2 nights for weekends, but 3 nights for mid-week.
When calculating a price for a booking, a pro-rata method is used. For example, if there is a 4 night break covering Wednesday – Saturday nights, and only Saturday night is defined as a weekend night, then 3 days will be charged at the mid-week 4 night break price, and 1 night will be charged at the weekend 4 night break price. For any 4 night break, it uses a pro rata calculation using midweek 4 night break prices and weekend 4 night break prices.
For example, Saturday night and Sunday night are defined as weekend nights. The nightly price for 4 nights mid-week is £60 (based on a break price of £240), and the weekend price for 4 nights is £100 (based on a break price of £400). Then the nightly price for Wednesday – Saturday nights is £60, £60 , £60 and £100.
The short break prices may be set up using percentages. So we can set 40%, 50%, 60%, 75%, 100% for mid-week breaks of 2, 3, 4, 5 and 6 days, and 40%, 50%, 60%, 70% for weekend breaks of 1, 2, 3 or 4 nights. These are then used to generate the nightly pricing.
A Saturday and Sunday night break then costs 50% of £1400 = £700.
A Saturday night alone costs £560.
A Friday, Saturday and Sunday night break is a 3 night break, and the weekend 3 night break price is 60% of £1400 = £840, and the mid-week 3 night break price is 50% of £1400 = £700.
The total cost is then £280 (1/3 of £840) + £280 (1/3 of £840) + £233 (1/3 of £700) = £793
Although it is possible to set individual break prices for each short break for each price period, by using percentages it can be much easier to setup, with maybe a few subsequent minor adjustments.