kendalcottages wrote:I know you know this LV but if the demand exceeds the supply, then the business-minded solution would be to raise the price... http://en.wikipedia.org/wiki/Supply_and_demand
I know, I know, KC, but I still don't think my properties are worth an increase (for the Brits in summer). Four years ago my prices for the big house were 2600€ per week which then equated to £1800, which was a fair price. Thanks to sterling then dropping like a stone I dropped my prices back to 2300€, which with the fx at around 1.10 still makes the properties £2100 which is the limit I feel I can ask for what I offer (not high spec, not private pool etc.)
Sorry Wally, for hijacking your thread
the reason I'm not putting up my prices (or by very little) in Peak is that my properties aren't worth it
LV I don't know what you're looking at! Just look at what you provide outside; a heated pool, large play area, expansive grounds amongst other things! Without mentioning the support you give as a host.
The way to do it is not a huge hike, just put it up by a small amount each year and that way you justify it on the increasing bills alone, without having to think about the decor (if that's your worry).
Don't be too self critical...and I do know all about that as I'm the same. I put our place on rental as the lowest 4 bed in Ibiza because I was paranoid our outside space was so small. But after 3 years I gathered up my courage and hiked the price by £300 and since then have inched it up each year so that I now chrage 51% more than at the start 7 yrs ago.
Peps...I too was worried about breaking a £3k barrier but for next year I took a risk and have done that - guess what? 7 weeks booked and 6 are at the new price.
But Mouse, I have competitors in the area who offer the same, and even superior accommodation for around the same price as I currently charge, or less. They presumably don't have a mortgage to pay like I do so do it more as a hobby. And a lot have "heated" pools which are heated by solar panels which are totally useless here in Brittany but a lot cheaper to run than my electric powered heat pump. But they can still call the pools 'heated'.
But you have to pay your bills in euros, LV, and you publish your rates in euros, plus you have even reduced your euro rates to help the UK guests. On top of that you have great reviews on TA. Am I right in thinking you have a lot of repeat business? If so, that means you have a lot of happy customers and you can probably get a good percentage of your rentals next year from them and from recommendations to their friends?
In that case, what about putting your official euro rates back to their peak, but write to all of them saying you are only too aware of the financial pressures that everyone is under, that the exchange rate is not great for them, but that this year you really have to increase your prices in order to cover your increased costs, as you did in fact reduce your rates to help with the exchange rates over the last couple of years. However, for them and anyone they recommend, any increases will be limited to these cost increases (quoting what you mean in financial terms) and they will not have to pay the new 2012 rates as advertised on your site. (a sort of loyalty reward).
For true domestic harmony it is essential that dogs know their place, which is below all cats
Pepsi, thanks for your answer, but I can't put them up that much, the house just isn't worth it for the equivalent sterling rate. I'm putting them up to 2400€ this year, with very slight increases in the two smaller gites and I'll see how it goes. It's just one of those things, being crucified by the exchange rate, I'm sure I'm not the only one. If the UK increases interest rates things may start to change, but I'm not holding my breath. I used to live OK and have plenty of money to re-invest, but this year I'm struggling, although bookings are as good as they've ever been.
Honestly my problem has been dealt with, I'm delighted that we get to give you advice!!! Wanted or not!
You would just get different clients surely. Most of my bookings seem to be from Germans in the big house - and they are spending euros.
Really LV - has your mortgage gone down, or your costs? The exchange rate should not be your concern, IMHO. Did you initially set your prices thinking this is worth X pounds or did you think it is worth X euros?
Perhaps you should look at it the otherway round. What are all your costs? What is a monetary value to the time you spend doing all this work? What is your turnover? What is a reasonable profit margin? Work backwards from there.
Or think about it like the fixed overhead cost is X - the sheets and everything are extra costs for me, so they are an extra charge. I know that you want to do an all inclusive price so you could propose that if anyone wants to bring their own linens they can and you'll reduce the price by that cost (15€/room for towels and sheets).
I think the fact that you do all your own washing and ironing is actually part of the problem. I know this costs me in the region of 15€/room at each changeover. But to you these are (probably) invisible costs because you (probably) don't give a cost value to the time you spend doing them.
Anyway I am completely unqualified to be giving someone as professional and experienced as you advice, but its been fun.
Hi Wally,
I tend to only have UK guests in Peak. Germans generally don't want to stay here as I'm not on the coast and that seems to be of overriding importance to them (judging by the enquiries I get which always contain the question "how far are you from the coast?". Plus I'm always booked by UK guests by the time they get around to enquiring.
I only do all inclusive for 4 nights + as I think that is what people want, even the French guests now. The only thing I pay for is help from a cleaner on changeover day. I do everything else (pool, garden, laundry) for the property management myself as I couldn't afford to pay someone else to do it. I can do the painting and Ikea furniture assembling plus basic DIY but any other refurbishment, plus plumbing and electricity I pay someone to do.
I have a pretty long season as it is and can't see how I could extend it any further, so I'll put up prices a little next year and see how it goes. My mortgage hasn't gone down, but as I took it out when interest rates were high, the payment term has considerably shortened, so that is good.
I just need to get better at holding on for bookings, rather than panicking and offering discounted prices which I do occasionally to secure a booking out of peak. I'm also terrible at asking people to pay for things when they are here. If I get shopping in advance for late arrival guest, or people use heating or logs in the summer when I state it is to be paid for, when they come to me to settle up I always tell them to forget it (if it is under around 20€). I suppose it all adds up! In short, I'm a very good host, but a very bad business person. I think it is largely because I run everything on my own - I really am a coward when it comes to taking money off people and I don't have an OH here as backup.
la vache! wrote:
In short, I'm a very good host, but a very bad business person.
Not necessarily a bad business person at all, LV. These are things which leave a nice warm feeling in the guests' memories. It brings people back, gets great reviews and recommendations. Now if you could just bring yourself to say 'that is why I can charge a bit more overall....'!!!!
I am quite hard with my basic B&B prices because I let things go like small Honesty Bar bills, do bits of laundry at no charge, give them a nice glass of wine and nibbles (or tea and cake depending on the time of day) on arrival etc. I prefer it that way - it may get me less bookings in the first place because some people are put off by the price, but in the long run it gets me more repeats and recommendations because once they have stayed people feel they have really had their money's worth.
For true domestic harmony it is essential that dogs know their place, which is below all cats
la vache! wrote: I'm a very good host, but a very bad business person. I think it is largely because I run everything on my own - I really am a coward when it comes to taking money off people and I don't have an OH here as backup.
If there was a sure-fire formula for running a small business successfully, then everybody would do it. I've always been a believer in following your instincts and your vision - when I've done that, things have usually come right in the end. LMH is a invaluable resource of collective knowledge but, equally, it may make you feel disadvantaged or inadequate when you see how others run their shows. Don't go there - sift out what is advantageous for your situation and disregard the rest. That way, you'll sleep sounder at night.
Absolutely! It is hard when you're doing these things on your own LV. I'm not that easy in a lot of situations as I hate playing 'host' and oddly enough I'm not good at taking money off people either!
I get round that by giving a small welcome note to them on arrival with the receipts of whatever has been bought and asking for the total amount to be left on departure, though some insist on giving it straightaway. For those departing, even easier...just shove a small 'thank you for staying' note under the door a day or two before they go, again with details of costs incurred.
And then TAKE the money!
That's a good method Mousie; subtle but does the trick.... and you don't have to stand in front of them feeling like scrooge for asking for YOUR money back...
After that if they still don't pay up... we have the choice of letting it go or not.... or taking it out of the security deposit...
Nightowl
Forever going one step forwards and two
backwards......
