Pricing - some advice please

[kasperdoggie]

Hi everyone,

This queston prompted me to delurk (I read this and Yahoo group forums regularly, but rarely post) as we are pondering the same question: to raise or not to raise rates. As it is, we are on the high end for the area/property size but every year I am getting high season booked well before end of winter. I keep on thinking that no one in the right mind would pay the prices we charge and yet they do, and apparently willingly

Anyway, here's what I have done last year in June after we filled up for the high season - I raised the price to what I thought 2007 rates could bear and briefly turned off availability calendars, to see if the properties at the new price level would generate any interest. I felt pretty bad doing this as it creates inconveniences for guests looking to book (although one saving grace was 2 friends put their similar sized homes on the market around the same time, so I was able to refer a number of people to them). Since we were already full up for the current year, I did not incur any risk of turning guests away based on new pricing - it was sort of a marketing/pricing test for the next season.

To my surprise, I got a sizeable number of inquiries at the new rates. This made me feel less worried about raising the prices for next season and sitting empty as a result. I left the higher prices in place, and 2007 season was booked up at those rates.

I've just set up a similar test for this year - turned off the calendar, raised the high and shoulder season rates and will see what happens for a week. So far, I have received a number of inquiries - leads me to believe we have not reached the top of the market prices yet.

Julia.
http://www.vacation-cape-cod.com

[guest 4]

Just out of interest Julia,

Are many of your guests from Uk? If so, the current interest rate makes the prices attractive.

Your properties look fantastic, I can understand why people would like to visit.

Ruth

[kasperdoggie]

Ruth,

We get quite a bit of overseas guests, especially last 2 years. This year, two out of 3 homes have up 70% of bookings from European guests, with UK guests accounting for about 50% of total reservations (rest are from US, Ireland and a handful of German and Dutch guests). The 3rd home draws mostly US guests - possibly because it is dog friendly in the summer and gets booked up early by those wanting to drive to the destination with their pet.

And many thanks for your kind words about our homes. Everyone on LMH has such gorgeous properties, I have been drooling over them for the last hour - it's making me wish I was planning my next getaway NOW!

Julia.
http://www.vacation-cape-cod.com

[guest 4]

I often while away my time looking at everyones links on the site. (I'm very nosey)

I particularly like the French Gites, never been to france on holiday. Will do it one day. If I can tear myself away from my own place. Trouble is we have to visit our own to maintain it But we do have a great time when we are there.

Ruth

[vrooje]

Trouble is we have to visit our own to maintain it But we do have a great time when we are there.

That's exactly where we are right now -- painting walls, installing new window screens, scrubbing the oven, and having a great time!

Meanwhile, back on topic...

I raised the price to what I thought 2007 rates could bear and briefly turned off availability calendars

What an interesting idea! (And, welcome to the forum!) Like a trial run, essentially risk-free. Nice one.

[Clexane]

Febi,

This is one of the toughest question of all - as you have well discovered. This is our third year and our prices are at least double if not more than when we started. Like you in the first season we found that we listed in April - and the whole season through October got booked in two weeks, our elation soon turned to intense curiousity as to why we where so successful - we had the highest price in the area as it was.

The reality with some research is the properties in our area where very low grade, and our area offered significant benefits on adjoining areas that had much more expensive properties like Luberon and Verdon - our advantage was we where in the middle of both areas offering choice (location, location) and our area was not overun by tourist and thus more authentic Provence. As such the combination of poor regional properties and unique advantage with Luxury offering seemed to draw people in (BTW this was not all part of a plan but something we tumbled into)

As things stand we are virtually booked out and as of this morning we just moved our last week in June (phew! that was close). Our demographioc did change from mainly French to mainly American/UK as I believed our marketing reached a wider audience than others in the area. We also offer a much more comprehensive level of service and treat guests with a five star level that is very refreshing to international guests that others are not used to.

All this adds up to guests being more than happy - our guest book says it all - staying at our Villa and paying our current pricing which they and we also believe is fantastic value. You need to believe in your offering and go with the value adds ... I dont believe you should follow the crowd with their offerings (both price and services) but be bold give people the five star service they expect in high standard hotels (absolute cleanliness, quality furnishing, nice touchs, additional services) with all the benefits of self-catering (privacy, space, a home away from home) and duly request a fair price for your offering rather than what the local 'gites' are putting up and pricing at their level.

[The Olive Grove]

got to figure out what to do with the others now !

If you have an animal sanctuary nearby I am sure they would appreciate them to use as bedding.