Rental Pricing:- too "cheap?" or too much?

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Are your holiday rental charges too low?  Or too high?  Have you really factored all costs in with your private rental prices, or are you "winging" it?!  Read on....






Lots of new owners for the 2018 season are very naively setting their rental pricing very low in order to "grab that rental" and seem to think that "any rental is better than no rental"....  Sadly, they will learn the hard way!

The "oldies" to the rental world are taking a back-seat, getting the popcorn out and waiting for the end-of-season mass exodus from holiday-ownership as a result!

Every season, new owners enter into a "price-war" with other, usually more established, owners to "win the rental" and every year, it is the older, more experienced owners who survive and the "newbies" who find they cannot meet the bills they are faced with at end of season.....

2018 seems to be particularly swamped with "cheap deals" - which basically spells nothing but "trouble ahead!" for the owners concerned...





Adverts have been spotted offering a Fri-Mon break for as little as £75 (= £25 per night) for up to 8 people...  Great Bargain for the guest?  Yes.  Great rental for the owner?  Absolutely NOT!

There are times when it is actually "cheaper" for the owner to leave the property empty, after the costs involved for a rental are taken into consideration, which more established owners recognise and sadly: newer ones do not!

There are a mountain of costs involved to keep one Holiday Home afloat, which perhaps newer owners haven't been made fully aware of at point of sale, or have chosen to "sort out as it happens" - thinking the incentive to "earn" £75 for a weekend and "get a booking" will override it all...  which it just won't!

Here's just a few reasons why: 

  • If you price something too cheaply, there is always a sense of there being "something wrong" with it. It sends out a message that the owner is trying desperate measures to get bookings, because nobody wants it for some reason, or it is an indication that all is not what it seems. (See our Scammers article)
  • Low prices usually attract low quality guests. Which is more preferable? 30 weeks full of bargain hunters looking for a cheap deal, who might wreck the place, or 15 weeks of higher-spend guests paying more, but who are more likely to show respect to your property?
  • It is far easier to reduce rates and give special offers from a higher starting point, if you "start low" - you have nowhere to go!
  • It is a much better situation to have other owners in the rental business as "allies" rather than as "enemies" and by constantly under-cutting, or offering ridiculously low pricing, you will not make many owner-friends!  The holiday industry is a strange world to be in, but if you have owner-friends, you will find you are recommended on if they cannot help the guest concerned.  If you are offering ridiculous pricing, the opposite will occur!
  • Don't forget the "you get what you pay for" expression: which is usually fairly accurate where holidays are concerned!  If you pay for "cheap" ... you will get "cheap."  Not a great advert for your Holiday Home, is it?




YOU MUST FACTOR IN ALL YOUR COSTS when fixing rental prices!

Running one Holiday Home is not a "cheap" hobby and your invoices will be endless, especially if you rent!

  • Utilities: Your guests will use far more utilities than you do personally at your Holiday Home, simply because for them - it is "free!"  So expect larger electricity and gas bills than when you are using your property....
  • Maintenance bills will be higher, as the more the property is used = the more maintenance will be required.  Bear in mind that your guests are also viewing the property as a "Holiday Home" and they will not treat it in the same way that you do!
  • Rental Cleans: You CANNOT rent your property without having both an "arrival and "departure" clean carried out for EACH rental, (unless you want major complaints.)  This works fine if you have back-to-back rentals, as one departure clean becomes the next arrival clean, but if you have more than about a week maximum in-between rents, you will need BOTH.  Usual fees for ONE rental clean is around £25, so expect to pay £50 if you need both at either end of the rental.
  • Repairs and replacements: you might be OK to stay at your property all season with a slightly leaky kitchen tap, a bit of a lumpy mattress, or a wonky TV aerial, which means you can't get BBC2: but your guest is entitled to complain about it and expect it to be rectified.
  • Insurance: you MUST ensure you have a "malicious damage" clause on your insurance.  Most insurance companies will also have heavier excess penalties in place for a rental claim.
  • Damages: Any renting owner who claims to have never suffered damages hasn't rented very often!  Be prepared to have to "spend" at the drop of a hat due to rental damage, some may be a small cost, some aren't... 
  • Wear and Tear: often overlooked! But all of the above comes into play the more your Holiday Home is used....
  • Site Fees: (the biggy!) Site fees obviously vary from park to park, and property-to-property, but a £75 weekend rental after all the above has been taken into consideration is not going to help one jot towards paying those.

Using the same "£75 cheap weekend" as an example again, if you have had to cover an arrival and departure clean for that weekend at the total cost of £50:  how far does the remaining "profit" of £25 go towards your above costs before the guest has even set foot inside your property?




Check what other private owners are charging for similar properties at your park.

Check your park's rental pricing for a similar property to yours....  always go lower.  But remember your park will usually include "Entertainment and Facility" passes and linen as part of their rental costs, so factor that into your rental pricing if you are not including in yours, and will be an additional cost to your guest.  There is little point in setting a figure that will cost the same, or more, than your park once passes have been added.

Always set a "minimum rental figure" that jusitifies your costs and NEVER go beneath that.

Always take into account the holiday seasons (low, mid, high, peak), national and school holidays and any local events where accommodation is in demand.  If you charge the same all year round: you will 100% be fully booked over peak dates: but will be empty for the rest of the season, which will NOT cover your costs.

NEVER offer ridiculous low rental prices to get "bums-on-seats" ... you WILL regret it at the end of season when your bills are due to be paid and you will have made a fair amount of "owner-enemies" along the way, who will not recommend your rentals on....

(And don't forget:  ANY income you make from a rental MUST be declared to Mr Tax-man!)

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