YOUR RATES ARE YOUR RATES!
Discounting rates is a good business decision for some owners.
Many property owners discount their rates when asked. The most obvious reason for a discounted rate is to keep you occupancy rate up, which , of course means more money. It is a great way to fill up your unit in the off season. Another reason owners may discount is for an extended stay. Maybe… stay for 2 weeks and get a day or two free. There are lots of ways to structure this. Some owners may reduce the rate when it is just a couple staying in a property that would accommodate many more. All of these are good reasons to discount the rental rate and it works well for some people.
I am vehemently opposed to discounting my rate.
I don’t follow this line of thought. In fact I am vehemently opposed to discounting my rate. I know it goes against what many consider the conventional wisdom of vacation rentals and you can call me a snob or what you will but sticking to my rates has paid off for me. I do not ever reduce my seasonal rate.
I do have different rates for each season. My off season is the winter so I decrease my regular rate for the entire winter season. I also have a separate rate for the holidays. This is different than offering someone a discount off of the regular rate for a particular season. When someone inquires about a “discounted” rate from the one that is posted, the answer is always ‘No, I do not discount my rates.’
I’m not just being stubborn. I actually have reasons why I don’t give a discount on my rates. First, I think it comes across as unprofessional to ‘willy nilly’ change your rates. I want the people who are inquiring about renting my property to know that I take my rental seriously and I expect my guests to do the same. I do not haggle. Haggling is something I might do in Mexico when I’m buying jewelry from a street vendor; its not something I am willing to do with my most expensive asset.
I get a lot of calls or the emails asking if I am willing to discount my rate because they are going to book so far in advance, or they are staying so long, or because the dates are only a week away, or there are only two of them, or the million other reasons that people think a discount is appropriate. My answer is always the same. I am polite but firm that I am not going to discount my rate.
I have defined who my perfect guests are and they are not people who ask for a discount. I have a higher end property and staying there is not cheap. If I were to offer discounts I would feel as though I am cheapening my product and that my guests would not appreciate it the same way. I know that I have done my research and I continue to the research on the appropriate rate for my rental. I am reasonably priced and there is no reason for me to accept less that my posted rate. I know its worth it and I want my guests to see that as well.
I am sure that I lose some rentals because I am not willing to discount. I don’t care. I know that I am getting the right guests by sticking to my policy. When I first started this was a hard decision because I was just so anxious to have guests…and pay my bills. Now, I feel more secure with that decision…and I don’t get so bent out of shape when someone asks me if I am willing to “reduce my rate” or “cut a deal.” Well, if I’m being honest I have to say that I still feel a little offended, which I realize is ridiculous but I just do.
Every rental owner has different goals and needs to make policies that work for them.
I am not telling you that you should adopt my strict ‘no discount’ policy. I am suggesting that you really think about why you would offer a discount and come up with your own policy and stick to it. Maybe your property isn’t as personal to you and it is strictly a vehicle to make money, which is fine. In that case, your only concern may be filling your rental up. If so, in some cases, it may make a lot of sense to negotiate a lower rental rate. Every vacation rental owner is going to have slightly different goals and priorities. You just need to figure out what you want, why you want it and make a policy that works for you and your business.
I’m sure alot of you may disagree with my stance on this issue so let me know what you think.I’d love to hear what works for you and your rental business. Leave me a comment.