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What rental rates you use for your holiday let can make or break it.

You could have the most attractive cottage in a prime location. It could have all the mod cons, as well as tasteful fixtures and fittings, but this may not matter if the price isn’t right.

The subject of holiday let pricing can be a minefield. So to help, we have created a handy guide featuring a Q&A with one of our experts. Read on for help and advice, as well as some handy tips.


How to price your holiday home

What to Keep in Mind When Pricing your Holiday Let.

It is important to take into account a number of factors when deciding on the rental rates for your holiday let. Consider the where, what and when.

Where is Your Cottage Located?

  • If your property is located in a tourist hot spot, rental rates can often be higher than neighboring towns and villages.
  • Equally, if your property is near a beach, lake, mountain or other natural attraction this can increase demand and therefore price.
  • This also extends to man-made attractions. Cornwall’s Eden Project, North Wales’ Zip World and Blenheim Palace in the Cotswolds, are all prime examples.

What Features Does Your Cottage Have?

  • Does your cottage have any unique or quirky selling points?
  • Is your property dog-friendly, or offer high chairs and cots for families?
  • Does your property have views of the sea, a river, a lake or a local landmark?
  • Hot tubs, enclosed gardens, modern kitchens and bathrooms, are all features that can improve rental rates.

When Are You Focussing On?

  • Each season can command a different price dependent on your property location. For example, summer in Cornwall will see higher rental rates than the winter.
  • Is it a school or bank holiday? Don’t just focus on summer holidays, rental rates can be lifted over February and October half term too.
  • Local events can cause an uplift in demand. Check if there are any local festivals or celebrations occurring over the year near your property.

How to Price Your Holiday Home Q&A with expert

Andrea manages our Revenue Management Team. She has taken some time out to answer our questions on how to price a holiday cottage.

Why is it Important to Market your Holiday Let at the Right Price?

The price is always an important factor for a potential customer. Price the property too high and you risk losing a booking. However, the same can be said for pricing too low, as it may lead potential customers to question the standard of your property.

From our point of view, people are looking up to two years in advance for their ideal holiday cottage. This means we have to make sure we price a property at the right rate, to ensure we maximise the opportunity of selling as much of a property’s availability as the Owner wants us to.


What are Your Tips for Pricing Your Holiday Let?

I would say to make sure you think about the following:

  • What standard is your property and who are you looking to market it towards? i.e. Luxury, budget, family-orientated etc.
  • Think about your property’s selling points; is it dog-friendly for example, or could you class it as wheelchair-friendly? Does your property have any unique or desired features? Think hot tubs, enclosed gardens or sea views. What is the bathroom to bedroom ratio like?
  • Your property location is a very important factor too. Is it near the coast or in a National Park? Is it in a popular town or village? Is it in easy walking distance from a shop or pub?
  • Make sure to look at similar holiday properties in your area and take note of how much they are charging.

At Sykes we closely watch the holiday market and use a tool called “Income Maximisation” to manage our Property Owner’s Prices.


What is Income Maximisation?

It is an advanced Revenue Management system, designed by leading pricing and revenue management specialists. In basic terms, by opting into Income Maximisation our Property Owners give us the discretion to vary their agreed prices up to a certain percentage. We will increase or decrease prices dependent on how well similar properties in the area are selling.

It’s a great system that really benefits our Owners, and one that no other company in the market is currently using.


Why Have Sykes Created Income Maximisation?

The thought process behind Income Maximisation was twofold:

  • We believed our Owners could earn slightly more rent in busier periods and in such situations time is of the essence– we could spend a few days contacting an Owner only for that demand to have dropped again.
  • We also saw an opportunity for Owners to increase their occupancy rates. It is often better to have a week booked at a slightly lower price, than the property remain empty with no income for that period.

How Does Income Maximisation Work?

It essentially takes the hassle of constantly monitoring and updating pricing from our Owners, as we will do it for them instead.

If one of our Owners decides to opt in to Income Maximisation there are three options for them to choose from:

Super Income Maximisation

Super Income MaximisationThis is our most popular option and the one that we would generally recommend.

Owners opted into Super Income Maximisation would give myself and the Revenue Management team at Sykes the discretion to vary the agreed prices upwards (without limit) or downwards (limited to a 20% discount). We wouldn’t lower prices lower than 10% in low season.


Full Income Maximisation

Full Income MaximisationFull Income Maximisation means that our Owners would give us the discretion to vary the agreed prices upwards (without limit) or downwards (limited to a 10% discount).


Partial Income Maximisation

Partial Income MaximisationThis option allows us to increase a property’s current prices by 25% where demand allows. We wouldn’t lower prices, however we may contact the Property Owner with other pricing initiatives.


Why do You Recommend Super Income Maximisation over the Other Options?

The honest answer is because it makes our Owners more money. We are forecasting that over 2019, our Owners on the Super Income Maximisation option will earn 12% more revenue than those on Partial Income Maximisation.

It may be better to explain through an example. We will use the fictitious Rose Cottage as our case study here:

The Owner of Rose Cottage in the Peak District has decided to opt into Super Income Maximisation.

In May, there is a one-off event nearby and demand has increased for properties in the area. We will then move the agreed price for Rose Cottage upwards for that week and promote the price change.

In Mid-September, Rose Cottage has a week that has not been booked yet. Demand is low and there have been storms forecasted throughout September in the Peaks. We would then decrease the price for this week to attract potential guests.

 


Let your property with Sykes and earn up to £125,000 per year*

  • Join over 15,000 holiday properties already working with Sykes Cottages
  • We welcome over 26 million web visitors a year
  • Many of our owners achieve more than 45 bookings a year
  • We specialise in turning your holiday property into a profitable year-round income for you

*Based on a 7 bedroom property in the Lake District with bookings between October 2017 to September 2018.

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