Formulating the right price
how to establish the right price of your holiday home
A key gear in a business marketing mix, especially as far as holiday home business in Sicily is concerned, is the price.
Here are some important tips on how to establish the right price of your holiday home:
- Make a small market survey on holiday homes already on the market, which broadly reflect the qualitative parameters of your property. When formulating the price, keep in mind that a key role is played by the location, therefore we encourage you to examine your own area of interest.
- High season periods can not only vary according to the location in which your holiday home is situated; other aspects to be considered are: tourist flows according to different seasons, wine and food-related events as well as cultural and folk events.
- During low season periods, we highly recommend you to mull over the hypothesis of reducing the sojourn price; discounts and special deals will allow you to maximize your revenue on an annual basis.
- For groups with specific requests, e.g. with pets coming along, you can always consider the option of including additional fees. Other extras might be, for instance, the need for a cot and / or high chair for children, the arrangement of a specific event during their stay (a dinner, a birthday), and the will to take advantage of a range of services not included in the sojourn price.
- If you are a beginner, and this is the first holiday home advertisement you do, work out your property value according to standard use and start by testing the market with prices lower than 10-20%. In case your ad enjoyed a moderate immediate success, you could always consider the option of gradually increase the price, season by season, until it reaches the standard use. When doing so, always be full minded that inflation rates may plausibly vary from year to year.
- Study the market attentively; estimate the value of your property objectively. A price aligned with your “competitor” ones is definitely the most sensible choice, yet it is extremely important not to underestimate your property drastically, this may cause a boomerang effect, letting the customer perceive a scarce quality product.
- Create a simple and transparent rate book, trying to avoid too many additional costs. You might want to increase the sojourn total price, still, including additional costs such as electricity, water, gas, and final cleaning.
- In case you are considering the possibility of renting out your holiday home for periods shorter than a week, use the function dedicated to this task when filling the rate book. It is rightful that the cost per night is higher than the “cost per week / 7” option. Managing your home for short periods of time will turn out to have more fixed costs such as cleaning and maintenance.
- Calculate the base cost of your holiday home weekly management so as to negotiate the price if necessary. Offering a discount, makes sense as long as it doesn’t affect your wallet.
- Constantly monitor the possible rate changes in the market, yet remaining on the same wavelength of your "competitors".