Working out a pricing strategy for your holiday let is fundamental. If you under-price the property, you’ll appear to be successful and get a larger number of bookings, but you will not generate a good profit. On the other hand, if you over-price, you’ll make a few bookings at a much higher value, but at the end of the year when you tally up your profits, you’ll realise that you’ve not made much money at all.
Pricing your holiday let is a complex subject as it’s affected by many things, including seasonality and popular local events such as festivals. It’s also affected by time, in the sense that a holiday booking slot is like a perishable item – as the start date gets closer, the potential value decreases to the point where, if no one books the property for that date, the value of the slot becomes zero.
Discounting or ‘variable pricing’ is a common strategy, which ties in with the idea of the holiday let as a ‘perishable’ item. The idea is, if your property hasn’t sold by a certain date, it’s time to apply a small discount to entice someone to make a booking. You can then increase this discount with time, but this will be subject to a minimum price, as there comes a point when it’s not worth selling the booking slot.
Agents provide sophisticated pricing strategies, developed over many years of experience and with vast data sets, and so they’re the recommended advisors to go to first, in order to work out your pricing. The portals (such as Airbnb and TripAdvisor) can estimate what your pricing should be, but generally, such portals work on a nightly rate model that’s more suitable for hotels and B&Bs and does not translate very well for holiday lets.
Providing outstanding customer service
A lot of people think that efficient turnaround and housekeeping is all that’s required for a successful holiday let, but this is not true. What’s also paramount is the customer service aspect, which needs to be nothing short of excellent.
If you’ve gone with a holiday letting agency, some of them will take charge of customer service, while others do not – it depends on what services the agent offers. If you’re taking care of customer service yourself, then you need to be prepared. Expect to take phone calls, potentially at unsociable hours, which could be anything from small issues such as: ‘I don’t know how to turn on the television’, to more serious matters such as: ‘the boiler has broken’.
Regardless of how the situation has come about (many issues are not the owner’s fault, there could be a power cut, for example), you need to be ready to jump into action and solve the problem. When people are on their holidays, they expect any issue to be resolved quickly and efficiently, and it is the owner’s responsibility to do this. If owners are not set-up to be able to handle this part of their business, then it is recommended they ask their housekeeper to take over the role. This often costs more money, but from our experience, it is money well spent!
Looking beyond housekeeping and customer service, increasingly we are seeing more emphasis on going the extra mile to ensure that your guests not only have a nice house to stay in, but also have an exceptional experience whilst on holiday. This means, as well as a welcome gift, owners are offering additional perks and personalised experiences, for example, organised walks, bike rentals, providing home-cooked meals, and leaving useful information about nearby attractions and eateries.
Holiday Let Mortgages. Done.
Holiday Cottage Mortgages Limited is an Appointed Representative of Julian Harris Mortgages Limited, Julian Harris House, Musgrove, Ashford, Kent, TN23 7UN, which is authorised and regulated by the Financial Conduct Authority (FCA). Julian Harris Mortgages Limited’s FCA Register number is 304155. The Financial Ombudsman Service (FOS) is an agency for arbitrating on unresolved complaints between regulated firms and their clients. Full details of the FOS can be found on its website at www.financial-ombudsman.org.uk
Your home may be repossessed if you do not keep up repayments on your mortgage. Pure holiday let, buy to let and commercial mortgages are not regulated by the FCA.