Keep property busy everyday or keep for high price days only

[Shuja5]

Hi Everyone.. 

So, maybe a million dollar question, rent property for few nights in a month at very high rate or keep it busy every night at a low rate for same return, overall in a month. Maybe it's individual choices, wanted to hear everyone's views, pros and cons of each. 

I give my background, when I set Smart Pricing, the pricing goes extremely lower than market, and I get a lot of guest request. If I turn off and set the price as per market, there's almost silence or one or two nights. 

Or less guest in the number of days and more money is always better, as you get more chances of reviews ? 

thanks

Shuja

[Mike-And-Jane0]

@Shuja5 In your scenario then it is definitely best to go for a few nights at a high price. But the returns are unlikely to match in both scenarios.

You really need to understand your fixed and variable costs per night and then decide. If you have high fixed costs you need lots of bookings even if the profit margin is low. With high variable costs the concept of low volume higher price will probably work better for you.

NOW smart pricing knows nothing about your costs (although I see you can now tell it you want occasional or high numbers of bookings) so we don't trust it to make pricing decisions for us.

We would if it was possible to vary the min/max price seasonally.

[Shuja5]

@Mike-And-Jane0 Thanks for your expert response. Actually, i calculated, even low price is quite a a money for a whole minth of booking. Instead of keeping vacant days.  Can I get idea of variable and fixed cost ? Costs like wifi if or bank loan and  monthly maintenance fees are fixed and electricity, laundry etc are variable ? 

[Pat271]

@Shuja5 This is a question all we hosts ask ourselves on our hosting journey. I think there is a happy medium, individual to every host and every property. Over the years, my sweet spot is a 3-day minimum, 2 days for gaps, and a price competitive (sometimes higher, sometimes lower) with comparable listings in my area. That seems to have gotten me almost fully-booked with 3 or 4 days a month free to do maintenance and to let the properties breathe a bit.

There will be a different sweet spot for every property and for every host, though. I know hosts that are hellbent on booking every single 1-day gap. I know other hosts that are quite satisfied booking only on the weekends and only during their high season. It all depends on the host and the property.

One thing I’ll mention, though, is what I feel is the false motto of “If you are booked out too far, you aren’t priced high enough”. I don’t think this is necessarily true. The average guest for one of my properties tends to book 6-months to 1-year in advance. Another example: We are going to see the eclipse in the Texas Hill Country next year. We tried to book 4 years in advance, but they didn’t accept reservations. We finally got reservations the moment reservations opened up, 1 year in advance, and they were sold out within the first 2 hours. The price was about 3 times the usual price, and a 5 day minimum at an “Inn” that usually has 1-day minimums. Does that mean the price of the property is too low for the eclipse? I don’t think so - I think the Inn has just found their “sweet spot” over the years.

[Shuja5]

@Pat271 Thabks for a valuable tips. Because of silence, i let smart pricing go again. But didn't choose its suggested low, but 20% higher. Still silence, but later suddenly got month long booking. Again no booking, but at the end 3 weeks later, got another long term booking. I guess because my price is 30-40% lower than market price. 

[Marwa52 · Accepted solution]

Hi dear @Shuja5 , 

Don't let the smart price determine your lowest price, the smart pricing is always suggesting to me to but my unit at $60 in comparison to my area, I always discard this notification, because I have my unit at $90 to $100 and it's almost fully booked. Hence, use the smart pricing smartly, set a higher minimum for the smart pricing with a very high maximum, this way the smart pricing will never go to very low rates and will only increase if the demand is higher. 

My second advice is to enter your account as a traveler, and compare your unit to the units in your area, open the units' calendars and see the level of demand on them in comparison to their set price, you will eventually find a fair price that insures profitability and keeps your demand. 

My last advise is if your unit has a low number of reviews, don't set your rate too high until you get at least 25 positive reviews, after which you may ask for a higher rate. 

Good luck

[Paula]

Hey @Shuja5  I just came across your post and wanted to ask if you've had the opportunity to read the suggestions from @Pat271 , @Mike-And-Jane0 and @Marwa52's suggestions? (Thanks so much everyone 😊)

Looking forward to hearing from you.