Balancing fees and discounts in your holiday rental pricing

Dreaming about, shopping for, selecting and booking a holiday home are all critical points in the traveller journey that begin far in advance of their stay. To start the journey off in the best way possible, it’s critical that your pricing and fees are clear and compelling. While travellers understand that some fees are a part of the holiday rental booking process, fees that are perceived as unnecessary or higher than they expect could push travellers towards a different listing.

On the other hand, discounts can entice travellers, making your property more appealing as they search for their perfect accommodation. With the right transparent pricing strategy, you can increase your holiday rental bookings and maximise revenue.

Holiday rental fees are any extra charges beyond your nightly base rate and are often used to compensate hosts and property managers for additional services or amenities. On our platform, you can choose between two types of fees:

• Standard fees: commonly used to cover things like extra guests, cleaning and pets;
• Custom fees: any additional fees beyond standard fees that are unique to your property.

Travellers are generally aware of and comfortable with standard fees. However, fees for things like basic utilities or internet are viewed as superfluous and can deter travellers from booking. In these cases, we recommend baking these costs into your base rate.

For most travellers, well-explained, necessary fees aren’t going to prevent them from booking. Here are some general tips to ensure that you are communicating clear and transparent pricing that will appeal to travellers:

• Do provide adequate detail and transparency around the fees you’re charging, such as a cleaning, pet or extra guest fee;
• Don’t include vague fee labels, such as ‘administrative’;
• Don’t impose excessive fees that are not proportionate to the services you’re providing, such as charging for basics like bath linens. 

Since we know that travellers value price, incorporating discounts into your pricing strategy can be an effective way to incentivise them to book. Discounts could include:

• New listing discount: you get a badge to show travellers that you recently joined Vrbo and appear under a special new listing filter, enticing travellers to book with you for a discount.
• Weekly or monthly discounts: provide booking incentives for longer stays, which help reduce the hassle of managing turnover for shorter stays and guarantees your revenue for a longer period. Balance pricing strategy with discounts.

To begin offering or update your discounts, follow these steps:

• From the owner dashboard, select Calendar in the main navigation;
• Select Settings and Base rates and discounts;
• Fill out or update the relevant fields for the type of discount you’re offering (weekly or monthly) and then Save.

We know a lot goes into determining the fees you choose to charge for your property. But if you think your fees may be affecting your bookings, it’s a great idea to try other techniques like lowering or removing fees or offering an appealing discount as a booking incentive.