The vacation rental market is pretty hot in Florida, where it isn’t really a low season. People come to the Sunshine State all year long, looking for beach fun, golf, nature, and all the good food and shopping they expect from a well-deserved vacation.
We know that the surge is due to more travelers seeking personalized and spacious accommodations, where they can cook, spread out, and really enjoy having a home away from home. The growth in demand has led to an increased supply of vacation homes on Anna Maria Island and throughout the surrounding beach communities.
That means you have to be strategic and competitive with pricing.
It’s about ensuring your vacation rental stands out in a crowded market and remains occupied as much as possible so you can enjoy high rental rates and avoid vacancies.
Setting competitive prices is crucial not just to attract guests but also to maximize your income. Here are our best tips as vacation rental property managers who spend a lot of time pricing vacation homes like yours.
Understanding the Local Vacation Rental Market
Before setting prices, it’s essential to have a good understanding on how the market is performing and where your competition lands. Research local vacation rental listings to gauge the average nightly rates. Talk to a local property manager and access the volumes of data we have around pricing based on nightly, weekly, and monthly stays.
Take note of the seasonal patterns which can dramatically impact demand and pricing. In Florida, we attract tourists year-round. But, things definitely get busier in the winter months when people from the north are escaping cold and snow. Spring break is usually a particularly hot time for vacation rentals. And, throughout the summer, you’ll have families visiting while the kids are on their school break.
Don’t forget to consider local events and holidays that could affect availability and price as well.
Establishing a Base Per-Night Rental Price
Setting your base price comes down to understanding your costs and desired profit margin.
Renting out a vacation home will require some initial upfront costs, such as furniture purchases, and ongoing costs, such as maintenance, landscaping, marketing, and cleaning. Calculate those operational costs. Factor in the taxes and fees you’re liable for. From there, determine how much profit you need to make the investment worthwhile. You won’t necessarily be able to earn what you think the property is worth; that’s going to depend on a lot of things that are out of your control, such as demand and competition. But, if you have a base starting point from which you’d like to begin pricing your property, it can help you decide how to price based on season, demand, and what your property offers versus what the competition might provide.
Lean Into Dynamic Pricing Strategies
It no longer makes sense to set a single price and leave your vacation home priced there. For a long-term rental, this makes sense; you’re operating on a lease period of a year or more. But, with a vacation rental, the market is changing daily. Even hourly.
There’s been an industry-wide shift to dynamic pricing when it comes to vacation rentals. This is similar to the way airlines price their flights and hotels establish their nightly rates. You’ll adjust your prices based on the ebb and flow of market demand. Dynamic pricing tools can automatically adjust your rates based on algorithms that take into account your competitors’ pricing, local events, and historical data. Leveraging these can help you stay competitive and optimally priced year-round.
Market Your Unique Value Propositions
Your vacation property’s rental price should reflect the value you offer to the people who are coming into town. Most of the visitors in Anna Maria Island and the surrounding Florida beach towns are here for rest, relaxation, and vacation. So, if your property provides proximity to the beach, or a particularly gorgeous view, you should be charging more than a property that is further from the fun activities. Consider any luxury amenities or unique offerings. Push your pricing higher when you have a private pool or large outdoor space where guests can grill and children can play. Conversely, you’ll have to drop your price in order to stay competitive when your rental is similar to others in the area.
Optimize Guest Reviews and Ratings
Positive guest reviews and high ratings can justify higher pricing. Most guests will read reviews before they decide on a place to stay. That’s because these reviews are clear indicators of your willingness to provide a stellar guest experience, which potential visitors might be willing to pay more for.
Encourage satisfied guests to leave reviews, and use their feedback to further improve your rental and justify competitive rates.
Offer Discounts and Incentives
Looking at a long vacancy period and you’re not sure how to fill it? Be more competitive with your pricing. Offer discounts for stays of at least five nights, for example. Or, offer a discount to returning guests who have stayed with you before.
You also need to be willing to test the market and adjust your price as necessary. Finding the sweet spot for your vacation rental pricing isn’t ever going to feel like an exact science. It requires testing the market, monitoring the results of your current pricing strategy, and adjusting that price when necessary. Over time, you’ll learn which prices maximize both your booking rate and your overall income. You can always experiment with different pricing strategies at various times of the year to find what works best.
Setting the right price for your vacation rental property is a balance of profitability and competition. By understanding the market, calculating your value proposition, and adopting dynamic pricing strategies, you can compete effectively in the busy and fast-moving vacation rental market.
Remember to be flexible, adapt to trends, and always seek feedback to keep your pricing strategy sharp.
Working with a local property management company is an excellent way to ensure you’re pricing your vacation property competitively, accurately, and profitably. Contact us at Anchor Down Vacation Rentals, and we can help.