Marketing - setting the rental price
Setting the rental price for you holiday cottage is of course a very important factor in determining the success of your holiday cottage venture, and if you are at the stage where you are trying to decide whether to run a holiday cottage, you will need to determine prices in order to work out whether the books will balance.
There are many factors that can affect the price you can charge, and we have tried to list as many as possible below.
Location
This is probably the most important factor in determining what you can charge. As they say when it comes to buying a property, ‘location, location, location’, and this is as true for holiday homes as it is for you own home.
The better the location, the more you can reasonably expect people to pay, and people will generally pay more if the cottage:
- is located in a tourist area
- is located a tourist city, town or village
- is near a beach (especially within safe walking distance for children)
- is conveniently located for tourist attractions
- is conveniently located for local amenities such as restaurants, pubs, swimming pools
- has attractive views.
Condition of the property
Our experience has shown that the condition of a property both internally and externally is a crucial factor in getting guests to return to a holiday cottage. Other factors may have encouraged them to book, but if they are disappointed with the condition of a property (especially if the rental is high) then they are unlikely to return.
However, if when they are arrive they find the property in excellent condition, then this will have a very positive first impression.
Remember also that guests are more likely to treat your cottage well if the cottage is in good condition.
Facilities
It is reasonable to charge more for properties that have better facilities, including things like:
- swimming pool
- indoor or outdoor Jacuzzi
- drying areas (e.g. for hill walker’s kit)
- sports equipment, e.g. mountain bikes, canoes
- children’s equipment, e.g. climbing frame
- Wi-Fi
- Sky
- luxury fixtures and fittings.
Of course, there is a limit to how much you can increase your price for these facilities, but a property with more facilities can certainly expect to charge more.
Size of the property
Guests will expect to pay more for a larger property, especially if there are more beds, bedrooms and bathooms.
Your costs
The price you charge of course has to be sufficient to cover your costs, and hopefully quite a bit more!
Here are some of the costs you need to take into account:
- mortgage – probably the biggest monthly outlay
- agency fees, if applicable - possibly the second biggest cost
- cleaning and laundry
- gardening
- council tax (don't forget to apply for any reductions in council tax)
- telephone, broadband/Wi-Fi
- Sky
- heating and lighting
- insurance
- marketing
- ongoing repairs and maintenance.
See the section on starting up which addresses how to estimate costs of running your holiday home in more detail.
Your competitor's prices
In order for guests to choose your holiday home over others in your area, your prices need to be competitive. Checking the rental costs of similar holiday homes in your area is an excellent way to work out what you can expect to charge for you holiday home.
Get on the Internet and start looking for holiday homes local to you, remembering to take a note of the differing prices throughout the year (see below).
The season, and holidays
It’s stating the obvious, but you can expect to charge more for your cottage in the middle of the summer than you can in November or February. Have a look at how the prices vary for holiday homes in your area.
Whatever the time of year, you can also expect to ask more during the school holidays. School holiday dates vary a lot throughout the country, and hopefully you will be getting guests from all over the place, so a good way to get an idea of holiday dates is to look at the variations in pricing that other holiday homes charge in your area.
Pets
If your holiday home accepts pets, then you may want to charge a little extra to cover the additional cleaning costs. Many of the people who book weekends in winter are dog walkers (who are never put off by the weather!).
Don’t underestimate the value of focusing some of your marketing on dog walkers. If your cottage and local area is dog friendly then make that known!
