What do you consider when setting prices for a stay at your holiday rental? Rowena, who owns and runs a holiday home in Cyprus, tells us about how she’s already setting her prices for the 2015 season.
When you factor in the mortgage, maintenance fees, management fees, cleaning and laundry charges, plus electricity and water bills, it can sometimes be difficult to break even and make money from your holiday home. So it’s crucial to set a price that will cover your costs.
It would be great to be able to offer our house at a bargain price, but in reality it’s not possible, and especially in a hot country like Cyprus. Our prices are higher in the summer and this is not because it’s a popular time of year to go, but because the price of running the air conditioning in the hot summer months is extremely expensive – we have to make sure the price we charge covers this additional costs.
Check the competition
We always check to see what prices other people are offering in our area and although we have to ensure we are covering our costs, we also want to be competitive and not price ourselves out of the market. At the same time we don’t want to undervalue our home and guests may question the quality of our property if our prices are too low.
It’s also not always possible, or viable, to match what other people are offering. We had an enquiry last year via Holiday Lettings from a guest. They enquired about our property and another in neighbouring resort in our village at the same time, and told me that (although they preferred the look of our property) the other homeowner had offered them a deal they couldn’t refuse. I weighed up all the factors and came to the conclusion that we just couldn’t match the price they had offered. It wouldn’t cover our costs and, as tempted as I was to reduce the price and secure the off-peak booking, I still believe I made the right decision.
The guest went to Cyprus and viewed our house while they were there. They’ve subsequently stayed with us twice since, as they are regular visitors to Cyprus and much preferred the look of our home. So although we didn’t get that particular reservation, we have as a result got further bookings from them and are still able to cover our costs when we quote.
When are the flights released?
Another point to consider is when to set your prices. Ideally you need to do this as soon as possible as many people like to book in advance.
Next year I have three potential bookings, who are all waiting for the EasyJet flights to be released for 2015. So for me it’s very important to ensure our property has up to date prices when those all-important flights are launched. Plus, at this time we will put some extra effort into advertising and promoting via our social media channels.
What about your prices?
I would be interested to hear how you set prices for your holiday rental and what your reasoning is behind them. 2015 seems a long way off, but in reality it’s just round the corner!