Making an informed decision on how to set your property’s rental rates can make a significant difference in your ROI. By pricing a property too low, you’re fighting an uphill battle to profitability before the season even starts. On the other end of the spectrum, a rental priced too high may remain vacant and you risk not being able to cover out of pocket costs. Answering the 5 questions below will guide you on how to competitively price your property(s) – and fatten your wallet.
1. What annual expenses are required to maintain my home?
To make a profit, your property’s rental income needs to exceed operating costs. Figure out your business’ overhead by listing all associated rental costs using the list below as a guideline:
Fees and Permits
– Merchant account/credit card processing fees
– Management fees/commissions for rentals
– Mortgage costs
Once your list is complete, calculate how much you spend on each item per year. Add up each item’s annual cost to determine your operating expenses. When you divide your total operating costs by 12, you can get a monthly average of rental income required to match your property’s expenses, making it easier to set rental rates.
Since seasonality will likely affect your property’s earnings each month, understanding your regions tourism trends will give you an idea of when you can expect to become profitable. Once your rental income matches your operating costs, all other earnings are profit. To make sure that you’re making the monetary income deserved on each rental, ask yourself:
2. What are the seasonal tourism trends in my property’s region?
Seasonality in your region should be one of the most helpful determinants of setting rates. While high and low season may seem obvious in some destinations, it can be much more difficult to assess in others. Often times, contrary to common belief, seasonality is not always focused on calendar dates. For example, don’t just lower your rates Labor Day weekend because it is considered the end of summer if travelers are still inquiring about your beach property through September. Extending your high-season rates just a few weeks may mean doubling your profits. Special events, school holidays, and long weekends are also occasions to increase rates and maximize ROI.
Setting your rental rates properly and maximizing your income during holidays and high-season will help reduce the stress of obtaining renters during the off-season. Securing a booking during the low-season may require more creativity. Running a special offer, editing your advertisement (description, photos, and title), or offering your home for a ‘girls weekend’ or ‘yoga retreat’ will help boost inquiries and bookings.
While familiarization with tourism trends and seasonality will make it easier to set rental rates, awareness of competitive property’s rates will validate any reservations and help you confidently price your rental no matter what time of year.
3. How have other owners/managers priced competitive properties?
Each season, go onto the major listing sites (FlipKey, TripAdvisor, etc) and review the other homes listed in your property’s region. Observe how much other owners/managers are charging for nightly, weekly, and monthly stays. Check out properties with special discounted offers and perks posted.
It is important to compare apples to apples when examining competitor’s rental rates. Examine homes with the same sleep occupancy, number of bedrooms, similar location (ski-in/ski-out versus a drive from the mountain), and amenities as your own.
The minimum night stay is another key determinant for setting rental rates. Some tourist destinations are geared solely around weekend trips while others attract mostly weekly visitors. During the summer, owners with homes in Cape Cod, Massachusetts rent exclusively with a check-in and check-out on Saturdays. You don’t have to conform to the standard when setting your rates, but you should be aware of the renting habits in your region.
As you view competitive properties on major listing sites, check for uniformity in the rate’s table on each advertisement. While some homes have lots of detailed and specific rates, others may have just a high and low season rate listed.
4. What should be included in the standard rental rates?
The structure of a property’s rates is vastly unique depending on the type of rental. For example, Bed & Breakfasts and self-catering units within a resort typically offer separate rooms but shared accommodations. Other homes have multiple apartments and are geared for larger groups and may be rented per unit or as a whole.
Travelers not only need to know how much your property costs to lease, but also how your property typically rents. The tips below will help to create a comprehensible rate structure for even the most inexperienced renters.
– Determine your property type. Some owners/managers set a standard rate per booking while others charge per guest. A unit with multiple apartments/accommodations can often be rented individually or as a whole, depending on the season, group size, and availability. Your rates should easily convey those renting options.
– Create a clear and concise rate table. Give the exact dates of your high and low season and the corresponding rates. Make sure that you do not use ranges or averages but be careful not to make your rates too restrictive either. Include any specialty rates (such as per guest fees) or intermittent spikes in rates for holidays or unique events.
– Be cognizant of your renters and of their preferred payment methods. Knowing your typical renter and their preference for payment can make or break a booking. If your property is geared for families with children it may be easier to pay for their vacation in installments. Whereas a group of couples renting high-end property will very likely be able to reserve the home with a 50% deposit upfront.
– List any additional charges, costs, and fees upfront. If you charge for taxes, cleaning fees, or other costs in addition to your rental rates be sure to include them on your advertisement or guest’s will assume they are only paying the standard nightly, weekly, or monthly rate. Payment transaction fees can be upwards of 3% through online booking platforms such as PayPal so it’s important to be transparent.
If your property has a unique amenity or special selling point that sets your home apart from competitors (such as access to a boat or golf course), then it’s okay to create an up-sell or ‘add-on’ to your current rates. You may also want to consider posting your ‘add-on’ as part of a discounted offer, perk, or freebie when running a special.
5. How can advertising special offers and discounts successfully incentivize a renter?
Lowering rental rates is common mistake when bookings are lacking. Simply lowering your rates can compromise the value of your home, but advertising a special can easily help increase bookings without having to permanently restructure costs.
Running a discounted rate is most appropriate for securing last minute bookings, filling a previous cancellation, or renting during the off season. To create an irresistible offer, custom tailor the suggested discounts below:
– Create urgency with an expiration date. Don’t miss out offer ends soon! Setting your offer to expire a few weeks from its posting date creates urgency and prevents travelers from procrastinating on a booking.
– Free night with qualifying stay. Book 6 nights, get one free! Create an offer where if your guests book a certain number of nights, they get an additional one for free. You can set the minimum number of nights they are required to book depending on seasonality or your property’s availability.
– Discounted rates. Take 20%Off Stay! Incentivize potential guests by offering a percentage off the total rental cost. You can decide if you want to have a minimum night stay to qualify for the discount, or run it for any booking within a specific time frame.
– Perks and Freebies. Free Lift Tickets! Provide your guests with a gift or a give-away for booking your home. If your home is primarily rented with the expectation that your guests will likely be skiing, offer them a few free ski passes.
Accurately pricing your rental rates is the easiest way to increase your ROI. Remember, rental rates can be adjusted as the market varies or even as your availability changes.
Don’t forget, when you change your rates you, must update them on any posted listing (both online and print), but that’s a lesson for another day. Until next time, happy bookings.
Photos used with permission of VRMA. Copyright Tourism Bruges
Last year, more than 100 holiday rental professionals from 14 countries met in Barcelona to foster collaboration between rental agencies throughout Europe and beyond. This December, the Vacation Rental Managers Association (VRMA) will once again host a European Seminar with title sponsorship from CSA Travel Protection and Europ Assistance.
If you’re a professional rental agent looking to grow your business and would like to interact with some of the most influential minds in the holiday rental industry, book your flight to Bruges! Join FlipKey representatives and other industry professionals from Europe and beyond for this two-day event with more than a dozen new education sessions specifically for holiday rental professionals.
Do you want to share your knowledge with attendees? VRMA is still looking for presentations for this year’s Seminar. All industry professionals are encouraged to submit presentation proposals to speak at this event. Proposals selected must address an industry-related topic with specific educational content presented. Proposals should be submitted by 1 September.
Do you offer products and services to rental agents? Sponsorship opportunities are still available. Learn more.
Come join FlipKey! Online Registration will be available in September, along with a program of all sessions!
No time is better than the present to take a trip to these destinations that are slowly, but surely disappearing right before our eyes.
1. Glacier National Park, Montana Global warming may seem like a distant danger, but for an area names for the glaciers that carved it millions of years ago, it is a very pertinent issue. Human-stimulated global warming is one of the main causes of the destruction of Glacier National Park’s biggest draw. One hundred years ago there were over 150 glaciers in the park and today there are just 25 left. The glaciers are expected to fully disappear by 2020, which would disrupt the ecosystems around the park and change the environment of the park completely.
2. The Maldives The world’s lowest nation is also going to be the first nation swallowed up by the Indian Ocean. The Maldives is the smallest Asian county of about 1,190 islands and has over 600,000 tourists each year. Rising sea levels and global warming are the main reasons why the Maldives may be completely underwater in less than 100 years. In the past 100 years, the sea level has risen by about seven inches causing the President to start buying land in other countries, like India, Sri Lanka, and Australia, so that residents can relocate. According to the Daily Mail, in the world’s first underwater cabinet meeting, former President Mohamed Nasheed said,
“If the Maldives cannot be saved today we do not feel that there is much of a chance for the rest of the world.”
3. The Alps These mountains that were formed millions of years ago stretch across eight different countries today. The Alps have lost 20% of their size since the 1980s and it is likely that they could completely disappear in the next 40 years. The cause? Global warming. Temperatures have increased twice as much as the global average and will continue to increase by .72 degrees Fahrenheit every 10 years. This loss would not only alter the supply of water in the area, but would also severely cripple the European ski business.
4. Bangladesh If sea levels in Bangladesh rise by one meter, 50% of the country would be completely flooded and the country is experiencing some of the fastest recorded sea-level rises in the world. Kutubdia is one of the many Bangladesh islands that are sinking rapidly from erosion and climate change. Adding to the already disastrous situation, neighboring country, India, is using up all of the country’s water supply making the area become increasingly uninhabitable . The Guardian quoted devastated schoolteacher, Nural Hashem,
“We lost everything. We are not happy, because we must move again. Climate change is making thousands of people homeless.”
5. Great Barrier Reef, Australia One of the seven natural wonders of the world and the world’s largest coral reef, the Great Barrier Reef is the only thing on Earth that can be seen from space. Unfortunately, 60% of the world’s coral reefs will be lost by 2030 and we won’t have this beautiful phenomenon for much longer. Coral reefs get their color from tiny algae that live in their tissues, but when temperatures get too hot the algae eject themselves and the corals appear bleached. Starfish also contribute to 42% of the destruction, because they eat coral and survive on growing agricultural pollution.
6. Venice, Italy The Floating City, The City of Canals, The City of Bridges… Whatever you may call it; Venice is one of the world’s most beautiful cities, but it faces an inevitable destruction. Sea level around the city is rising by 4 – 6 millimeters (mm) per year and in the last 100 years, Venice has sunk by 9 inches. Scientists discovered that is also tilting at a rate of 1 – 2 mm per year right into the water. Each year thousands of tourists come on what may be their one and only visit to the sinking city since it is expected to be inhabitable for another 70 years.
7. The Dead Sea The Dead Sea, which is 8.6 times saltier than ocean water, is evaporating and being used as a main industry water source for fertilization companies in the area. In the last 40 years, the sea lost a third of its mass and is receding by an average of 13 inches per year. It is dangerous for the surrounding area because sinkholes are popping up and caving in villages as the water shrinks and destabilizes the ground. Business that were once on the shore of the sea are suffering because they are now set back a mile from the shoreline. The life expectancy of the sea is dwindling and is down to less than 50 years.
8. Galapagos Islands, Ecuador The ecosystem in the Galapagos Islands is being completely destroyed as tourism increases each year. People are carelessly annihilating the islands by running over animals, catching animals in fishing nets, and bringing over invasive species that wipe out animals already facing possible extinction. Seventy five percent of the species on the islands are found nowhere else in the world and they are being wiped out by rats, goats, ants, dogs, and cats that are brought over by cruise ships, boats, and planes. The Telegraph quoted Martin Wikelski, biologist at Princeton University,
“The government needs to be stricter on what is allowed there. It is one of the world’s most unique ecosystems… and continues to be one of the most important laboratories for evolution studies.”
9. Madagascar The world’s largest island is being demolished by forest logging, burning, and poaching of the animals on the island. As a result, desertification, degradation, and soil loss have affected 94% of the land. Over 80% of the flora and fauna on the island are found nowhere else on earth so destroying them would end their existence completely. Madagascar is home to over 20 species of lemurs that would also be wiped out if the island were to be completely destroyed. Out of the original 120,000 miles of forest, there are 20,000 left, expected to last about 35 years.
10. The Congo Basin The world’s second largest rainforest has over 10 million acres of forest that are being degraded each year from mining, logging, farming, and guerilla warfare. This is a problem for the plants, animals, people, and the world. There are over 10,000 species of tropical plants in the Congo Basin and about a third of them are only found there. The area is also home to over 75 million people whose livelihoods are threatened the destruction of the Congo. Tropical rainforests produce 40% of the world’s oxygen, so the destruction is a pandemic issue. By 2040, up to 66% of its forests, plants, and wildlife could be gone.
Traveling as a family, particularly with young children, might seem to be a stress-inducing experience, but not according to the experts. In a recent survey, FlipKey raised this topic among dozens of seasoned family travel writers — veterans of traveling with kids in tow — to find out what they find to be the most stressful factors of traveling with kids. Surprisingly, we found that over 60% believe that traveling with children is not a stressful experience. Here, they share their expert tips and tricks on how to avoid what they rank as the most common concerns about family travel.
1. The price tag of the trip For a lower-cost vacation, live like a local and stay in an apartment in a residential neighborhood for at least one week. You’ll have more space, your own affordable groceries, and fond memories of your “home” abroad. Often owners will throw in helpful extras like bicycles, boogie boards, or a crib, depending on your needs and where you’ll be. – Shelly Rivoli, Travels With Baby
2. Your child getting sick/hurt while on vacation We make sure to bring along our baby monitor and sound machine. Even though our kids are 7 & 6 it gives me piece of mind to have the monitor handset by my side whether lounging on the hotel balcony or in the vacation home. It eases any fears of the kids waking up disoriented and opening the wrong door or helps us hear them if they wake up from a bad dream. – Tésa Nicolanti, 2 Wired 2 Tired
3. Coordinating eating arrangements, catering to picky eaters, allergies, etc. Dining out can cause stress (either due to expense or entertaining kids during meals), so plan to dine in-room for breakfasts and lunches. This is easy to do with just a cooler: pack foods like bagels, cream cheese spreads, fruit, granola, and trail mix that can be eaten at either meal and on-the-go. – Amy Whitley, Pit Stops For Kids
4. Packing and transporting all of the gear Take the hassle out of schlepping baby gear by renting what you need at your destination. – Shelly Rivoli, Travels With Baby
5. Kids crying, screaming, or fighting in public Keep a positive attitude; if you’re calm, the kids will stay calm. Cut your itinerary in half so you don’t pressure the kids to do too much. – Kyle McCarthy, My Family Travels And after all is said and done, just roll with the punches. Be sure to be flexible with your vacation plans – don’t be afraid to stay longer or leave sooner based on what’s happening on the road. – Mara Gorman, Mother of All Trips
6. Airports and flying Buy a day pass to airline lounges, especially if you have a layover. There are snacks, TVs, WiFi, wine for mommy and some even have playrooms. – Elizabeth Thorp, Poshbrood Since we travel internationally a lot, we try to make sure that the kids have plenty to do on the long flights and that we are prepared with lots of games, iPads, and snacks. – Kaamna Bhojwani-Dhawan, Momaboard
7. Making sleeping arrangements By renting an apartment, everyone can have separate bedrooms and living like locals is infinitely less stressful, more enjoyable and more affordable. – Bethaney Davies, Flashpacker Family
8. The length of travel and the age-old question: “Are we there yet?” Prepare your kids in advance – let them know what to expect and what is expected of them. The same applies to letting them know what they can expect for length of travel. – Corinne McDermott, Have Baby Will Travel Don’t forget to pack books, crayons, paper and devices. iPads, iPods and Smartphones can allow bored kids to play games, watch movies or listen to music. – Elizabeth Thorp, Poshbrood
9. Finding kid-friendly activities and entertainment at your destination I don’t stress about what to do with kids – being in a new place and learning about the new culture is more important than them having something to do all day, every day. – Kaamna Bhojwani-Dhawan, Momaboard Involve the kids in the planning and choosing activities to ensure they are doing and seeing things that they find interesting. – Eileen Ogointz, Taking the Kids
10. Enjoying adults-only time We always make sure our hotel room has a balcony. This way after the kids go to sleep we can relax on the balcony and chat without disturbing them. – Tésa Nicolanti, 2 Wired 2 Tired
Some of the most magnificent pieces of architecture in the world have been submerged under water by earthquakes, floods, and other geological events. Some of the sites still remain a mystery of how they ended up on the ocean floor. Nowadays, these cities, monuments, palaces, and even some unexplained structures can all can be found with a simple dive to the bottom of the bodies of water in which they remain, and many can even be viewed from above, making these unusual locations intriguing tourist destinations. If you have a taste for history, then stray away from museums that are flooded with tourists and navigate your way to the depths of the ocean to visit these spectacular underwater treasures.
1. Cleopatra’s Palace and Pharos Lighthouse, Alexandria (Egypt)
Alexandria’s Eastern Harbor is home to ruins believed to be remnants from Cleopatra’s Palace and the Pharos Lighthouse. The underwater artifacts include a small statue of a Pharaoh from the 4th or 5th century B.C., a colossal stone head of what is believed to be Cleopatra’s son, Caesarion, a sphinx statue, coins, sections of temples inscribed with hieroglyphics, and-of-course massive pieces of both Pharos Lighthouse and Cleopatra’s Palace.
2. World’s Wickedest City, Port Royal (Jamaica)
Back in the 17th century, Port Royal was a pirate’s haven with almost every other building being either a bar or a brothel serving seafaring men. In 1692, a massive earthquake and tsunami sank most of the city and killed 2,000 people. Today, the underwater site features hundreds of ships, paved streets, buildings, and the most famous artifact, a 1686 pocket watch that stopped ticking at exactly 11:43.
3. Submerged temples of Mahabalipuram (India)
The temple of Mahabalipuram is believed to be the last in a group of seven temples, six of which are said to be completely submerged. Divers have recovered walls, scattered square and rectangular blocks, and other artifacts. In 2004, a tsunami caused the ocean to recede in the area, and tourists caught a glimpse of one of the submerged temples. Archaeologists excavated the remains proving that another temple existed and it was in fact, bigger than the one left standing today.
4. 8000-year-old Yonaguni-Jima, Okinawa (Japan)
A monument that is 600 feet wide and 90 feet high was discovered off the coast of Japan by a dive tour operator in 1985. It has been dated around 10,000 BC, more than 5,000 years before the oldest pyramid in Egypt. Some believe the structure is manmade, while others claim there is evidence like unknown hieroglyphics and too many right angles carved into the structure for it to be made by any known civilization. If this is true and the structure is manmade, then it opens up the possibility that there was life before even the earliest recorded civilization.
5. Pavlopetri (Greece)
Pavlopetri is a completely submerged, yet intact city that dates back to 1,000 BC. It appears to be a sophisticated city with two-storey homes and a complex water system comparable to those of modern cities. Under water, you can see streets, buildings, garden spaces, courtyards, and many storage vessels used to transport goods to and from the port. There is an excavation project underway to ensure the city’s preservation before it is lost forever.
6. Dwarka Port (India)
One of the seven most ancient cities in India, Dwarka has been completely submerged by water six times since it was built. The Dwarka that stands today is the seventh Dwarka created. The ocean floor is covered with remnants of the past six Dwarkas from massive stones to smaller circular structures and hundreds of anchors providing evidence that the city must have been an enormous port at one time.
7. Parco Archaeologico Sommerso di Baia, Pozzuoli (Italy)
As a result of many earthquakes, much of the ancient port of Baia can be found underwater. Below sea level lie enormous brick piers, remnants of multiple luxurious villas, roman statues, and the famous Misenum lighthouse. The area is also dubbed a marine protected area in order to preserve as much as possible.
8. Truk Lagoon (Micronesia)
In 1944, a US Navy attack on the Japanese resulted in almost 50 vessels and 250 aircraft destroyed and sunk to the sea floor. The fleet is now known as the Ghost Fleet of Truk Lagoon and is the world’s best shipwreck destination for divers. Many of the ships are filled with valuable equipment and are famous diving sites today. Truk Lagoon is the ultimate underwater time capsule.
9. Sea of Galilee’s Underwater Stone “Monument” (Israel)
The Sea of Galilee is home to a massive stone structure that has archaeologists confused as to where it came from. The structure is made out of boulders and is said to weigh about 60,000 tons. The rocks are piled on top of each other like they are protecting an enormous burial site and it is definitely manmade. There isn’t much else known about the monument other than the fact that it must have been grueling to put together.
10. Lake Jindabyne, Snowy Mountains, New South Wales (Australia)
Jindabayne was entirely covered by water after a dam was created to develop a lake in place of the town in the 1960s. Many people were able to pack up and move their houses to the new Jindabyne location, but most of the town slipped under water. In fact, most of the town still remains intact under the water and when the water level falls tourists may be able to see the old town from the shore.
FlipKey is a vacation rental marketplace with more than 240,000 rentals around the world. Find the perfect place to stay for your trip, and get great value along with the space, privacy and amenities of home.