Pricing strategy for short-term rentals.
The right price isn't a fixed number — it shifts with the season, the day of the week, how far out the date is and what's happening around you. Here's a practical guide to stop guessing and start deciding with method.
Key takeaways
- Treat price as a dynamic decision: it changes with the season, the day of the week, lead time and local events.
- Split the year into high, shoulder and low season, and set a base rate for each phase by looking at direct competition.
- Use minimum stays as a lever: tighten them on sought-after dates, loosen them when you need to fill the calendar.
- Early-bird locks in bookings early; last-minute fills nights at risk of staying empty — apply each where it solves a real problem.
- There are no magic percentages: industry references are starting points, not guarantees; refine with your own calendar data.
- A direct channel with a booking engine avoids 10-25% OTA commission, giving you more margin and full pricing freedom.
First: price is a daily decision, not an annual one
The most common mistake in short-term rentals is to set a "high-season" rate and a "low-season" rate and leave them untouched the rest of the year. The ideal price for a night depends on how far away that date is, how full your area is that weekend, the day of the week and local events. All of this changes — so your price should too.
You don't need to review everything every day to start. You need a well-thought-out base and simple rules that nudge that base up or down depending on the situation. That's what the sections below are about.
A note of honesty before we go on: there are no magic percentages. The references we give below are typical industry starting points, not guarantees. The right numbers for your property come from your experience, your calendar data and watching the direct competition in your area.
Pricing by season: high, low and shoulder
Seasonality is the main axis. Instead of thinking only "summer expensive, winter cheap", split the year into three:
- High season — when demand in your area peaks (on the coast, typically July and August; inland and in cities, it can be spring, the grape harvest or Christmas). Here the price goes up and occupancy takes care of itself; the risk is undercharging.
- Shoulder season — the transition weeks (May, June, September, October in many areas). Reasonable, price-sensitive demand. This is where a good strategy makes the biggest difference.
- Low season — when demand drops. The goal stops being to maximise the rate and becomes filling nights that would otherwise sit empty, without destroying the property's value.
Set a base rate for each of these three phases by looking at what properties similar to yours (same type, same area, same quality) are asking for those dates. Your direct competition is the best thermometer you have — better than any national average.
Local events: the multiplier many forget
A weekend with an event that fills your area is worth more than a normal high-season weekend — and many hosts leave money on the table by not noticing. Festivals, fairs, music events, sporting fixtures, conferences, pilgrimages and dates when nearby hotels sell out push demand up in a concentrated way.
Get into the habit of checking your region's council, parish and event-venue calendars ahead of time and marking those dates. On those days it makes sense to raise the rate and, often, require a longer minimum stay (see the next section). The reverse is also true: when your area empties out completely on a specific date, don't force a high price just because it's "the weekend".
Don't invent demand that isn't there — always confirm the event actually brings people to your area and not to the other side of the district. Local common sense beats any rule.
Minimum stays: the least obvious lever
The minimum stay isn't just a convenience rule — it's a revenue tool. Used well, it protects valuable weekends and avoids hard-to-fill gaps in the calendar.
- In high season and at events — longer minimum stays (say, a 3-night minimum or more, or a full week in peak summer) ensure highly sought-after dates aren't "broken up" by one-night bookings that leave gaps around them.
- In low and shoulder season — lower the minimum stay. Accepting 1 or 2 nights captures weekend micro-trips and fills nights that would otherwise stay empty. A rigid minimum stay in the wrong season is one of the most common causes of half-empty calendars.
- Orphan nights — when a 1 or 2-night gap is left between two bookings, drop the minimum stay just for that gap (or lower the price) so you can fill it.
The general rule: tighten the minimum stay when demand is high and on your side, loosen it when demand is low and you need it.
Discounts: last-minute and early-bird
Two discounts with opposite logic, both useful when applied at the right moment.
- Early-bird (advance booking) — a discount for those who book well ahead. It locks in a base of bookings early and brings predictability, especially in shoulder or low season. In high season, dates that are sure to sell out rarely need it.
- Last-minute — a discount for upcoming dates still unsold. An empty night earns zero; it's worth more to lower the price close to the date and win a booking than to keep the full rate and sleep with the house empty. Industry studies indicate typical savings of 15% to 30% on these last-minute bookings, but the right discount is the one that still pays you.
The trick is not to fall into blind automation: don't give last-minute on dates that will fill anyway, nor early-bird in guaranteed high season. The discount should solve a concrete problem — a night at risk of staying empty — and not erode margin where there's no risk.
Day-of-week pricing
Not every night is worth the same. In most leisure destinations, Friday and Saturday have clearly higher demand than Sunday to Thursday — and the price should reflect that. Charging the same rate for a Tuesday in November and a Saturday in June leaves money on the table on one side and scares off bookings on the other.
The usual practice is to set a higher weekend rate and a lower weekday rate, adjusted by season. In city or business destinations the pattern can flip (more midweek demand). Know your destination: watch when your area fills and build the grid around that.
Also use the weaker weekdays to pair with longer stays: a small discount from 5 or 7 nights makes your place attractive to those staying through the middle of the week and fills nights that would be hard to sell on their own.
Dynamic pricing vs fixed pricing
Fixed pricing is simple: one rate per season and little more. It's easy to manage, but it almost always leaves money on the table — undercharging when demand surges and overcharging when demand vanishes, losing bookings on both sides.
Dynamic pricing is the approach of adjusting the rate according to forecast demand, lead time, day of the week, events and competition. It doesn't have to be done with expensive software: you can start manually, with a base rate per season and simple rules (weekend +X, event +Y, last-minute −Z). What matters is the principle — price follows demand — not the tool.
Industry studies indicate meaningful revenue gains from dynamic over fixed pricing, precisely because it captures the peaks and fills the troughs. Start simple, watch the results in your calendar and refine. The best strategy is the one you can keep up consistently.
Why the direct channel allows better margins
All this price-tuning has an invisible ceiling while you depend on the OTAs: commission. Every booking through Booking or Airbnb hands the platform a slice typically between 10% and 25%. No matter how well you set the rate, that percentage always comes off the top.
On a direct channel — your own website with a booking engine — there's no OTA commission per booking. That gives you two real advantages. First: the same rate earns you more, because you keep all of it. Second: you have full pricing freedom — you can offer a direct discount to the guest that still earns you more than the OTA booking would, or apply early-bird and last-minute without sharing part of the discount with a platform.
OTAs remain useful for visibility and capturing new demand. The smart strategy isn't to abandon them — it's to use them as a shop window while having a direct channel that converts guests who already know you, with the margin on your side. That's what an own site with a booking engine is for.
Frequently asked questions
- How often should I review my prices?
- You don't need to do it every day to start. Set a base rate per season and per day of the week, and mark local events ahead of time. Then review upcoming dates that are still unsold once or twice a week to decide on last-minute discounts.
- What's the difference between early-bird and last-minute discounts?
- Early-bird rewards those who book well ahead and is used to lock in bookings early, especially in low or shoulder season. Last-minute lowers the price of upcoming, still-unsold dates, because an empty night earns zero. Use each where it solves a real problem, not by default.
- Should I charge more on weekends?
- In most leisure destinations, yes: Friday and Saturday have higher demand and the price should reflect that. In city or business destinations the pattern can flip. Know when your area fills and build the pricing grid around that.
- Do I need dynamic pricing software?
- Not to start. The principle — price follows demand — can be applied manually with a base rate per season and simple rules (weekend, events, last-minute). Software helps you scale and saves time, but the strategy comes first.
- How does the direct channel improve my margins?
- On your own site with a booking engine there's no OTA commission per booking, which typically runs 10% to 25%. The same rate earns you more and you have full freedom to offer direct discounts that still pay you, without sharing part with the platform.
Want to keep all the margin from your bookings?
We build you your own website with a booking engine, payments and a synced calendar — where every direct booking comes in with no OTA commission and you fully control prices, discounts and minimum stays. One-time payment, no mandatory monthly fee, and the site is yours. Talk to us.
