Setting minimum stay periods can be a challenge. Do it right and you could fill out your reservations. Get it wrong and you lose potential business. What’s an independent vacation rental owner to do?
First off, you need to take note of what your visitors want. If they are leaning towards short breaks or short stays, you need to be geared to that market with your minimum stay requirements unless you want a sparsely populated reservations calendar.
We heard of one owner with a property on a group of islands where many visitors wanted to spend only part of the week on her island before moving to explore another.
She had a 3-day minimum stay restriction to accommodate her short stay guests, which proved unprofitable owing to the fixed set-up and cleaning costs required for each new round of guests. Instead of cleaning and setting up the property once a week, this was necessary twice a week with no extra income to cover her increased costs. Even worse, owing to short stay bookings, sometimes the property would remain empty for days, leading to further losses.
Some owners rule out short stay bookings
For this reason, some owners set minimum stay requirements that rule out short stay bookings of less than 6 days.
If you’re a new owner setting your rates consider this. Choose a low day rate combined with a short minimum stay and you will face high set-up and cleaning costs. You will have to absorb these unless you make an extra charge to short stay customers.
One answer might be to set your day rate at a relatively high level to cover your increased costs. This will deter most people from making a short booking and will also make your weekly and monthly rates look good. Especially if you present it as a discount on the weekly stay!
When guests do make a short booking, at least they’ll be paying you a fair return.
Pick up extra revenue at quieter times
No one wants to turn away potential bookings, but it’s a good idea to limit short stays to annual periods of low and medium demand – never in the high season. That way you can pick up extra revenue in the slacker periods with shorter minimum stay restrictions and you will not lose out at peak times.
If you don’t want to appear as an inflexible owner who will never allow short stay bookings, how about trying this? Apply a cleaning fee of, say, $100 (£64) for trips less than your posted minimum stay. Say your minimum stay was 6 days, this sends out the message to potential guests that you will consider short stays. Naturally, you would need to post any additional charges clearly at the time of booking, preferably before.
You may well lose those who were looking for 2 or 3 days, but you may pick up a proportion of those seeking 4 or 5 day stays.
Flexible and fair solutions
So, if you can be flexible, there are solutions that will mean that not only do you have a fuller reservations calendar but also that you make a fair return on your rental. The guests are still being offered opportunities for short stays at your property and many of them will understand that the increased rate can be justified.
This could (perhaps even ‘should’) be explained on your website.
Setting different rates for different periods then adding in new rates to cover different scenarios can be a bit of a headache. Particularly if rates are updated and posted on more than one channel – i.e. if you are registered with more than one listing site or online travel agent (OTA).
Service providers can help with rate flexibility
Having been through this same scenario myself with my Florida property, I found the necessary tools to help me do it more easily and remove room for error. Now powerful, cloud-based software programs are available to help independent vacation rental owners with this problem and manage their rates and minimum stay information.
Some SaaS (software as a service) providers offer this feature as part of their packages to subscribers. It’s well worth investigating if you want to maximize your reservations and revenues and minimize the wear and tear on yourself.