Yield Management Around the Holidays
One of the things that I love about yield management is all of the nuanced ways that it can be applied to vacation rentals. We’ve discussed before how yield management can be leveraged for time of year, time prior to arrival, and occupancy rate, but there are other ways that you can leverage it on top of those things to capture even more revenue.
When Do Guests Book Holiday Rentals?
For example, the majority of guests, regardless of market, book their holiday vacations (Thanksgiving, 4th of July, New Year’s Eve, etc.) about a year in advance. They make a family trip out of it and there is quite a bit to coordinate. Very few people in comparison decide at the last minute to take a family Christmas vacation, particularly with a large group. What this means is that you can charge higher rates 8-12 months out, and gradually lower your rates as the holiday draws closer. People who book farther out also tend to stay longer. A booking made several months out or more will have an average stay length of a week or longer, whereas reservations made closer to arrival tend to average only a couple of nights.
Pricing Vacation Rentals for the Holidays
Something else to consider when developing pricing is the size of your unit. How many bedrooms does it have? How many people will it sleep? As with holidays, large groups don’t often put together last minute trips. But 2-3 people do.
If you have a 5 bedroom unit, chances are not too many folks are going to book it for a last minute weekend getaway. But if you have a 2 or 3 bedroom unit, you are exactly what a last-minute, couple/small group getaway is looking for. Increase your weekend rates a bit to capture more revenue from those last minute shoppers.
Pleasing Guests Around the Holidays
Regardless of when or why they booked, try to lock in your guest’s reservation for next year before they leave. If they put down a deposit for that trip before check out, offer them 10%-15% off, or a night free. Offer more discounts or reductions if they refer friends who book with you. Reward your most loyal guests with your biggest value, and they will become your best ambassadors.
This article was written by James C. Sells, the Founder & Principal Consultant at VR Biz Consulting, a company that works with vacation rental businesses to maximize revenue and take their software from a cost center to a profit center.
Hero image credit: Dakota Roos