Pricing strategy for short-term rentals.

The most common pricing mistake in short-term rentals is to set a "high-season" rate and a "low-season" rate and leave them alone for the rest of the year. The best price for a given night depends on how far away the date is, how busy your area is that weekend, the day of the week and what's on locally. All of these change, and your price should change with them.

You don't need to review everything every day to get started. You need a well-considered base rate and a few simple rules that move it up or down depending on the situation. The sections below cover those rules.

One honest caveat before we go on: there are no magic percentages. The figures below are typical starting points used in the industry, not guarantees. The right numbers for your property come from your own experience, your calendar data and watching your direct competitors.

Seasonality is the main driver. Rather than thinking only "summer expensive, winter cheap", divide the year into three:

• High season: when demand in your area peaks. On the coast this is usually July and August; inland and in cities it may be spring, the grape harvest or Christmas. Prices go up and occupancy looks after itself, so the risk here is charging too little.
• Shoulder season: the weeks in between (May, June, September and October in many areas). Demand is reasonable but price-sensitive, and this is where a good strategy makes the biggest difference.
• Low season: when demand falls. The goal shifts from maximising the rate to filling nights that would otherwise stay empty, without undermining the value of your property.

Set a base rate for each of these three periods by looking at what similar properties (same type, same area, same standard) charge for those dates. Your direct competitors are the best guide you have, far more useful than any national average.

A weekend when an event fills your area is worth more than an ordinary high-season weekend, and many hosts miss out by not noticing it. Festivals, fairs, concerts, sports fixtures, conferences, pilgrimages and dates when nearby hotels sell out all create short, sharp peaks in demand.

Get into the habit of checking the event calendars of your municipal council, your parish and local venues well in advance, and mark those dates. On those days it makes sense to raise the rate and often to require a longer minimum stay (see the next section). The reverse also applies: if your area empties out on a particular date, don't hold a high price just because it's a weekend.

Don't count on demand that isn't there. Always check that the event actually brings people to your area and not to the other end of the district. Local common sense beats any rule.

A minimum stay is more than a house rule. Used well, it protects your most valuable weekends and prevents gaps in the calendar that are hard to fill.

• In high season and during events, set longer minimum stays (say 3 nights or more, or a full week at the height of summer). This stops one-night bookings from breaking up your most sought-after dates and leaving gaps either side.
• In low and shoulder season, lower the minimum stay. Accepting 1 or 2 nights captures short weekend breaks and fills nights that would otherwise stay empty. A rigid minimum stay in the wrong season is one of the most common reasons for half-empty calendars.
• For orphan nights, when a gap of 1 or 2 nights 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 works in your favour, and relax it when demand is low and you need the bookings.

These two discounts work in opposite ways, and both are useful at the right moment.

• Early-bird (advance booking): a discount for guests who book well ahead. It secures a base of bookings early and makes your income more predictable, especially in shoulder or low season. In high season, dates that will sell out anyway rarely need it.
• Last-minute: a discount on upcoming dates that haven't sold yet. An empty night earns nothing, so it's better to lower the price close to the date and win the booking than to hold the full rate and leave the property empty. The right discount is one that still pays you.

Avoid applying them blindly: don't offer last-minute discounts on dates that will fill anyway, or early-bird discounts in high season when demand is guaranteed. A discount should fix a specific problem, such as a night at risk of staying empty, and shouldn't cut into your margin where there's no risk.

Not every night is worth the same. In most leisure destinations, Friday and Saturday see much higher demand than Sunday to Thursday, and your price should reflect that. Charging the same rate for a Tuesday in November and a Saturday in June means losing money on one and putting off guests on the other.

The usual approach is a higher weekend rate and a lower weekday rate, adjusted for each season. In city or business destinations the pattern can be reversed, with more demand midweek. Get to know your destination: watch when your area fills up and build your rates around that.

You can also use quieter weekdays to attract longer stays. A small discount for stays of 5 or 7 nights makes your property appealing to guests staying through midweek and fills nights that would be hard to sell on their own.

Fixed pricing is simple: one rate per season and not much more. It's easy to manage, but it almost always costs you money, because you charge too little when demand jumps and too much when it disappears, and lose bookings either way.

Dynamic pricing means adjusting the rate to expected demand, lead time, day of the week, events and competition. You don't need expensive software for it. You can start by hand, with a base rate per season and simple rules (weekend +X, event +Y, last-minute −Z). The principle that price follows demand matters more than the tool you use.

Dynamic pricing is about capturing the peaks and filling the quiet periods, instead of charging the same all year round. Start simple, watch the results in your calendar and refine as you go. The best strategy is the one you can keep up.

However well you tune your prices, commission puts a ceiling on what you earn while you depend on the OTAs. Every booking through Booking or Airbnb gives the platform a share, typically between 10% and 25%, and that percentage comes off the top whatever rate you set.

On a direct channel, your own website where guests book with you, there's no OTA commission on each booking. That gives you two practical advantages. First, the same rate earns you more, because no OTA commission is deducted. Second, you have complete freedom over pricing: you can offer guests a direct discount that still earns you more than an OTA booking would, and run early-bird and last-minute offers without sharing part of the discount with a platform.

OTAs are still useful for visibility and for reaching new guests. The sensible approach is to use them as a shop window while running a direct channel for the guests who already know you, where you keep the margin. That's the job of your own website.