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Ask Christine #13: Common Vacation Rental Pricing Mistakes
If your bookings are slow, your rates could be too high, too low, too vague, too confusing, or too restrictive
Note: This is an edited transcript of Christine Karpinski's How To Rent Vacation Properties by Owner podcast.
Christine Karpinski: Today's question comes from a homeowner. She asks:
 Q: "I seem to be getting a lot of inquiries, but not many subsequent bookings. What am I doing wrong?" A: If you go through your ad and you find that you've got great photos, you've got a very well‑written description, you're keeping your headline up to date, one of the most common things that homeowners do wrong is that their pricing isn't right. If you're not getting responses from your ad, your prices might be too high, too low, too vague, too confusing, or too restrictive. Let me explain.
Too high: If you have a condo in a complex where there's a hundred other condos that are exactly the same, and you have nicer furnishings or maybe marble floors and a Sub‑Zero refrigerator, that might warrant a little bit extra. However, it doesn't mean that you can charge twice as much extra. That would be an example of a price that's too high.
Too low: This happens to be the most common mistake that vacation homeowners make. There seems to be some sort of implied value with regards to pricing of the property. If somebody has an intended amount of money that they want to spend, let's say $1500 for the week, they're not going to look at properties that are $1000, because they think that those $1000 properties are going to be somehow inferior.
If the majority of your properties in your complex or in your neighborhood or in your market are in that $1500 range, and your property is similar to that property, there should be no reason for you to charge significantly less. Now, I understand that there are a lot of people who like to have lower prices just to get an edge on the market. A little bit lower would be maybe $10 to $25, but not significantly lower.
Too vague: This might seem a little odd, but too vague is if you have "low season" priced at $150 a night, "mid‑season" at $300 a night, and "shoulder season" at $195 a night. Now, what's wrong with that? The traveler may not know when your low season is or when your high season is. They would want to know the exact dates around that. So, that would be an example of too vague.
Too confusing: Oh, my word! I've seen a lot of people market their properties in a way that it is so confusing to try and figure out how much the property is per night, or how much it is per day. Having different rates for each week is a little obsessive. I think that along with just having a set rate for each season, throwing in a festival or spring break that might bring in a lot of travelers to your market where you can charge a little bit more would be certainly all right, but not having 20 different rate structures.
Too restrictive would be if you are requiring, say a full‑week rental during your off season. A lot of people during the off season can't travel for a full week, or maybe the weather just isn't good enough during that time. There are people who would likely rent your property, but perhaps they don't want to take a full week, maybe they just want to take a long weekend. Having a three‑night minimum might be the best way to handle restrictions during an off‑season.
Just to recap all: If you're not getting bookings, your pricing might not be right on the money. Your rates might be too high, too low, too vague, too confusing, or too restrictive. Now, go check your rates!
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Have you had to deal with any sticky situations regarding rates? What was the situation and how did you cope?
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