Heating, how much to charge and other costs

[tansy]

Firstly how do you work out how much you charge per week for your property? Is it the value of the house, how many it sleeps, where it is or is it if so & so is getting such & such I should get x

We made a radical decision and slashed the off season prices to attract business. So New Year we get a family in....delightful family - left the house spotless with even the bed linen washing away in the machine....the perfect guests that is until the Electricity bill arrived yeaterday 457 Euros for the WEEK!!!

We had left loads of logs for them as the woodburner heats the whole house and is the cheapest form of heating - but they didn't get on with it!...so all the radiators were turned up to no 9 24/7

I have just booked a boating holiday for us in South of France...the terms are quite strong...firstly I love the booking form online which I hope can be incorporated on the new web site. But then you can only pay by credit card and the 1.6% is passed on to to you, then on top of the boat hire we will be charged for diesel at 8.6 per litre, the trip is one way (we didn't request that but that is the length of the cruise) so they will deliver our car to the other end at a charge of 100 Euros...so the holiday that started off as 1,300 Euros has ended up in excess of 2,450 Euros with security deposit etc.

So it got me thinking....maybe I should be taking credit cards and passing on the costs and charge for electricity - what does everyone else think and how do you work it out. I am saying to off season folk that I think 300 Euros is tops for the weeks heating...they all agree on the phone but in real life will they turn the radiators down? Also should we be offering a cancellation policy and earn a bit of commission? Then perhaps have the clause if they are having a wild time we have the rights to throw them overboard as the boating company has in reposessing the house....what's are your thoughts? In fact we could have quite a bit of fun with 'developing' these boating terms of business!!

[vrooje]

We charge E1000 for the house in the on-season, E750 in the off-season. I got to that price mainly by shopping around as though I was a vacationer and pricing houses similar to ours, even though I actually didn't find any just like ours in our area (in a real town rather than a teeny village, right on the water with great views etc.), so I had to wing it a bit.

As it turns out we have to rent 13 weeks of the year to break even with costs of utilities, cleaning, mortgage, etc. That doesn't include stuff like new furniture or major repairs. I don't know whether that's a standard thing or not... but it hasn't been a problem for us so far. My parents are mainly in this as a long-term investment, so they're happy to be in the black at all -- profit is great, but it's an extra for them.

We include heating in all our prices, except for long-term rentals. There isn't any maximum included amount in our contract, though (I'd have to check this to be sure) there is a clause that states that we can evict the client immediately if they do serious damage to the property. Our cancellation policy is very simple -- the initial payment is non-refundable, and the whole payment is due and non-refundable 4 weeks before the start of the holiday. We're very up-front about this and even advise people to get travel insurance in case there's an emergency and they have to cancel their vacation. (We did have someone cancel because the husband was diagnosed with lung cancer, and we refunded everything -- we're all bark and no bite!)

We do accept credit cards through PayPal and we just eat the 4% cost (we use a French PayPal account that's linked with our French bank account -- much simpler accounting). Next year we'll probably just increase our prices to cover this, since most of our clients use PayPal anyway.

I'd love to compare these little tidbits... I've read some details on other threads, but the question of how to work out how much to charge is really interesting.

[alexia s.]

Tansy,
I don't know the answer but I can tell you the question (you should ask your credit card company): "Is it legal for the vendor to pass on the credit card charges to the client?" I'm aImost sure it's illegal (it used to be illegal, in the UK at any rate, but the law might have changed). If you do have the time to find out, please let us know.

[helene]

Hi Tansy - ouch that heating bill must have been a nasty shock. We probably have similar weather to you here in Brittany (luckily we are in dry area) and have gas central heating as well as an open fire in the open plan downstairs. We charge £5 per day for the heating and then also charge for any wood which works out about £3.50 per night. They have control over their boiler although it is situated in the laundry area which is a seperate building - therefore we tend to tell them how to alter the timer and they can alter the thermostat but we can always see that as well. I have made a policy decision not to include any elctric fires/heaters etc for precisily the reason you have identified. However when we holidayed in the UK once we had a meter for the storage radiators and that was a real pain having to make sure you had change, etc. I would be interested in what other people experience with heating.
regards
helene
PS Alexia is right about the credit card idea in the UK but I am not sure what it is in France

[Hanorah]

We include this on our website and go a bit more in depth in the welcome book.

What does the price include?
The accommodation and all utilities such as , gas, electric* and water. We also supply cotton bed linen, bath towels, hand towels flannels and dressing gowns. A basic welcome hamper will be supplied containing some essentials such as drinking water, bread, butter, milk and some seasonal extras. Free travel planning is included in the price and a free excursion to the Kozak mountain region.

* Electric is included in the price unless excessive use is noted at the end of your stay. On your arrival you will see in the welcome book the average amount of units used per week by guests (based on the hottest periods) with a generous 20% added on top. If the number of units is over this amount then we reserve the right to charge for them. We have never had to do this so far but have included this condition mainly to ensure that the air- conditioning unit is used responsibly, for example switched off when you are out of the villa.

So far so good and electric is very cheap in Turkey our last bill covering our whole season was only £60 for May-October. We have solar power for the hot water so our only other utility expense is Gas for the oven but this is supplied via a canister not the mains and one has lasted the season and still going.

[paolo]

Tansy,

When I entered the holiday rental market I looked at what comparable properties in the area were charging, and undercut them slightly to give myself a good start. After the first year it was obvious from demand that I should nudge the prices up. Four years on I am still raising the prices about 10% a year and I don’t think I have found my ceiling yet.

So basically I got the pricing wrong at the beginning and I still don’t know the maximum I could charge.

I could make more of an effort and get into ‘yield management’ like the airlines. They vary prices according to demand and so could we. Peak summer prices could be finessed upwards as the weeks get booked up. I do drop prices in the winter according to market conditions – for instance with the dollar in the doldrums I dropped the dollar rate.

Does anybody raise their prices as peak weeks get booked up?

[tansy]

Thanks everyone for feedback...one thing I have done for off season is to bring the price down to 500 Euros for the house for 2 persons then a supplement of 100 Euros per person for the week....I have suddenly had a load of Americans book...5 families in the last 2 weeks - normally get 5 the whole year! All via holiday-rentals (still so far only 1 booking from vrbo - another story!). So I must be coming up more on different searches including the price one now.

I am now wondering if the per person route is the one to go down - with a top price in peak times - like the holiday brochures...500 pounds based on 10 sharing. What do others think?

Electricity....keep you thoughts coming please....I'm now saying upto 200 Euros worth per week is reasonable.

[helene]

Hello Tansy - forgot to mention that the charge for gas/heating and firwood is only a winter charge and in the spring and autumn we do not charge unless it is really cold. Like Hanorah we have included it in our terms and conditions after an unfortunate incident when a guest insisted that he had not known it was extra in spite of us saying it at the start of the holiday. We do not charge extra for electricity as we do not have the Gites on a seperate meter and as mentioned before they do not have many electrical appliances. For your situation I think that the idea of including a set amount of units and then charging for extra used is a good one - if I were the client I would also like to be able to see what I was using so that I could 'manage' it so if it could be made transparent on the booking form terms and conditions and welcome pack about how to read the meter I would really appreciate that.

To Paulo - one company (French Country Cottages) has a very fine tuned pricing system which has a different tariff for every week of the year and reflects the half terms, bank holidays etc. Obviously this is based on the UK market as this is where their main client base comes from. So one of our properties is listed as £566 for w/c 20th My and then rises to £786 for the week after (half term this year) and then falls to £676 the week after that in June. They base this on quite good research so if you were thinking of varying the price their model might be worth having a look at via their brochure or on-line website. However I appreciate what you were saying was not quite the same as this but was a pricing structure based on demand which raised prices as they sold out - certainly that is a pricing model used in limited editions (artwork) and Brittany Ferries where the price varies to how booked up the boat is/how many of the edition is sold. As to your pricing policy to start with although you now consider it a mistake to start so low it may have been just enough to get you noticed and tempt people to book the first time and now you have become more experienced and get more repeats then you can afford to raise the prices as people know it is worth it. Product launches often have temporary price promotions to tempt first purchase which then reverty to full price so as not to undermine the perceievd value.

I have not copied Country Cottages approach - why? for a start it was about simplicity and at the time I was not that involved in the Gite part of our lives - however now I am and I think it may be worth considering in more detail. I have also been taken by suggestions by DivinemrsM and Tansy about pricing per person in all but peak season - anyway it is a useful and interesting debate and certainly stimulating the thinking.

Thanks to all for their contributions - it really is a great site with lots to learn
Helene

[francoise]

We provide coal for the stove and gas for the cooker within the rental price.
However from October to May we charge for the electric radiators at cost i.e. per unit of electricity based on the meter reading.
We do this because
1; We feel this is the fairest way as different people use different amounts.
We have had more than one party put all the radiators on high and go out for the day leaving all the windows open.

2. In France we are on the microbic taxation system ( for small buisinesses) whereby we are charged a lower rate of tax but as a condition are unable to claim any expenses.
I have heard you are not allowed to sell electricity in this way but all the french own Gites de France we have stayed in have charged us in this way.

We are hoping to have central heating soon and so will then feel more able to include heating in the rental price.

Francoise