After 4 and a half years with virtually no price increases at all I have put my rates up by an average of 18% ... from this October.
I looked at local prices - especially a National Trust property which is a similar size. Outside the winter period I am worked out new rates which are around 70% of their rates.
Although it is a huge rate increase I need to try to generate more income from my bookings. My profits are really tiny given the amount of time and energy I put into running my cottage.
In the last financial year I had 42 weeks booked. More & more people are booking earlier. I hope to generate more income with fewer weeks booked - or at least as much income with less work.
Very recent (stressful) urgent repairs & future maintenance issues that I have to address, have very much influenced me in upping my rates ..
Increasing My Rates
Rosebud, this year I put my prices up by 22%. Admittedly, the previous summer was the first trading year for our new cottage and we didn't start advertising until end of July. For the first year, I priced low because I had no idea what the demand would be, but I'm still fully booked this year and plan to increase them a bit more for next year (probably by about 7%). If enquiries dry up next January I will just decrease them again. But of course, if you have a lot of competition (which I don't) this approach could be considered fool hardy!
42 weeks booked definitely means you're too cheap! (imho!)
I'm putting my prices up by 10-12 % every year, roughly, with the odd special price for repeats.
After all, less occupancy can also be advantageous to guests, a property in better condition, more options for flexible check in/out when there's space between bookings. - Everyone's happy
I'm putting my prices up by 10-12 % every year, roughly, with the odd special price for repeats.
After all, less occupancy can also be advantageous to guests, a property in better condition, more options for flexible check in/out when there's space between bookings. - Everyone's happy
I've put mine up for next year by about 3-4% (as I did the year before) and already I have 7 weeks booked for 2016 between end of April and end of July so perhaps I should be asking more. I thought I was pretty expensive already and inflation is not that, is it, but I suppose when people keep telling you what 'good value' you are then it means you should be charging more.
I would be booked solid from March 1st to November 4th (then we are taking time out to regroup) if I hadn't had a two week cancellation for September and that last week of August that proves so hard to shift.
I would be booked solid from March 1st to November 4th (then we are taking time out to regroup) if I hadn't had a two week cancellation for September and that last week of August that proves so hard to shift.
Hi
I have started to look at pricing for next year and after nearly 3 years of no increase will have to move my prices up too. I think as many bookings that we have attracted because we are very good value may also put some off thinking there may be something wrong. We will target 10% in the busier periods and 5% in the off peak periods, for past guests we can offer a special rate.
Only when I sat down and took a real look at the competition did I understand fully that many are charging 20% more than us AND have more bookings too!
We are be doing some upgrading by installing Air Con and solar heating for the pool which should help to fill some of the shoulder periods and attract the American guests. Plus looking at more frequent housekeeping.
I have started to look at pricing for next year and after nearly 3 years of no increase will have to move my prices up too. I think as many bookings that we have attracted because we are very good value may also put some off thinking there may be something wrong. We will target 10% in the busier periods and 5% in the off peak periods, for past guests we can offer a special rate.
Only when I sat down and took a real look at the competition did I understand fully that many are charging 20% more than us AND have more bookings too!
We are be doing some upgrading by installing Air Con and solar heating for the pool which should help to fill some of the shoulder periods and attract the American guests. Plus looking at more frequent housekeeping.
Ianthy
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Rosebud - just a thought but do you have a lot of repeat guests?
When it comes down to it they're the only people who will notice an increase in your rates, as they're the only ones with an existing baseline. As you say, you're looking at a big increase - maybe enough to put them off (?). Had you considered contacting your previous guests and telling them that you're increasing prices (and maybe why) but offering them a more favourable rate (say a 10% uplift rather than a 20%) if they book for next year before end 2015 for example?
Repeat guests are generally good news and worth hanging on to, but obviously you need to make the business pay as well. It's all a balancing act!
When it comes down to it they're the only people who will notice an increase in your rates, as they're the only ones with an existing baseline. As you say, you're looking at a big increase - maybe enough to put them off (?). Had you considered contacting your previous guests and telling them that you're increasing prices (and maybe why) but offering them a more favourable rate (say a 10% uplift rather than a 20%) if they book for next year before end 2015 for example?
Repeat guests are generally good news and worth hanging on to, but obviously you need to make the business pay as well. It's all a balancing act!
Many thanks everyone & Greenbarn thanks for suggesting the discount.
I have been getting more repeat customers so had been planning to offer a discount to them. I was also considering an offer to those who expressed an intention to return ....
My increase outside the winter months is actually between 13% & 39%! - with a average of 18%
Perhaps an offer of a discount to those who said they want to come back if they book before the end of this year - but an ongoing offer to those who have already stayed more than once??
I have been getting more repeat customers so had been planning to offer a discount to them. I was also considering an offer to those who expressed an intention to return ....
My increase outside the winter months is actually between 13% & 39%! - with a average of 18%
Perhaps an offer of a discount to those who said they want to come back if they book before the end of this year - but an ongoing offer to those who have already stayed more than once??
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Gettingthere
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I was thinking the same as greenbarn. If you rely on repeat business, that sort of rise (up to 39%!) would almost certainly be enough to scare them off. The new customers less so if it's still at or below market rate.
As a general rule (with the exception of a second year market price correction) I think it is much better to always increase prices gently every year (say 5%) rather than an occasional sudden big price hike. Repeat customers won't get a shock and new ones won't know any different.
As a general rule (with the exception of a second year market price correction) I think it is much better to always increase prices gently every year (say 5%) rather than an occasional sudden big price hike. Repeat customers won't get a shock and new ones won't know any different.
The key is to keep your repeat or past guests in the loop. If they simply look at your newly revised rates, they may never enquire again. I'd email them all with whatever loyalty offer you decide upon so that they know in advance what's on offer. Do make sure they know it's a one off email though, that they haven't been put on a mailing list and give them an unsubscribe option; otherwise you're falling foul of data protection.
I always go with the gentle increase to avoid the need to target a different market each time you do a huge increase. You want to cultivate your guest market and then keep them with you if you can.
I always go with the gentle increase to avoid the need to target a different market each time you do a huge increase. You want to cultivate your guest market and then keep them with you if you can.
Many thanks Newtoit and Nemo.
I will have a bit of a rethink - I realise a gradual increase would be better .. I will certainly contact past guests with an offer of a reduction.
The reason I didn't increase my prices before was because I was with an agency who recommended no increase. However success with my own advertising & some complicated expensive maintenance work that I have to tackle - possibly involving applying for planning permission - has really made me want to make more profit with fewer weeks occupancy!
Year 1 with agency: 19 weeks booked
Year 2 with agency: 29 weeks
Year 3 me & the agency: 40 weeks
Year 4 my advertising - no agency: 42 weeks
I will have a bit of a rethink - I realise a gradual increase would be better .. I will certainly contact past guests with an offer of a reduction.
The reason I didn't increase my prices before was because I was with an agency who recommended no increase. However success with my own advertising & some complicated expensive maintenance work that I have to tackle - possibly involving applying for planning permission - has really made me want to make more profit with fewer weeks occupancy!
Year 1 with agency: 19 weeks booked
Year 2 with agency: 29 weeks
Year 3 me & the agency: 40 weeks
Year 4 my advertising - no agency: 42 weeks
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Gettingthere
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- Joined: Mon Nov 17, 2008 11:33 am
- Location: Devon
- Contact:
You highlight a very important point about commission based agents. They do not always have our best interests as heart when they give advice about pricing! They of course want you to keep your prices as low as possible as (for them) any commission is better than no commission! But they don't have to pay your maintenance costs or organise the cleaning do they?rosebud wrote: The reason I didn't increase my prices before was because I was with an agency who recommended no increase. However success with my own advertising & some complicated expensive maintenance work that I have to tackle - possibly involving applying for planning permission - has really made me want to make more profit with fewer weeks occupancy!
Well done for filling 40wks on your own. Just shows me that your previous agent were not really having to try very hard with prices held so far below market rate. I'm all for agents if they can add value, but if all they do is take, then we're better off without them.
I'm with you all the way - I would much rather have lower occupancy at higher rental and with less hassles and maintenance costs. And that's the joy of self marketing!