One of the trickiest parts about running a short term rental or vacation rental business is figuring out unique ways to entice guests to book with you. Guests are saturated with countless places to book, and with the power in their hands, determining how to make your property standout becomes increasingly difficult. One unique way that hosts have been tackling this issue is by offering discounts to guests. These can range from referral discounts, longer term stay discounts and even direct booking discounts. The question is, should you be giving discounts to your guests, and if so, what type of discount is best suited for your business?
Referral discounts
One of the best ways to get new guests staying at your rental is by offering referral discounts. Simply put, the money you technically are giving away is negated by the new bookings you wouldn’t have gotten otherwise. As well, these referral bookings ensure that guests who have already enjoyed your rental have already passed on good words. In order to minimize the referral costs, try and give the previously booked guest a credit to book with you again instead of cash. This discount strategy is for those looking to get new guests in their rental without doing much work.
Long-term stay discounts
With the pandemic shifting the way businesses operate, longer-term stays have become more normalized in the short term rental industry. Like referral discounts, this method also ensures that the money you’re technically ‘losing’ is near minimal as you’re able to secure a higher occupancy rate. By giving guests a reduced rate for booking for an extended term, you guarantee that your property will stay booked. This discount method requires no extra work besides calculating how much of a discount you’re willing to give out. If you’re trying to determine the rate, figure out your previous occupancy rate before the pandemic and the amount of money you made. As you’re increasing the occupancy rate give a reduction but ensure that you’re not dipping below the pre-pandemic rate.
Direct booking
Probably the most common discount is the direct booking strategy. Online travel agencies such as Airbnb and VRBO offer great visibility when advertising your property. However, with that visibility comes fees that these OTAs take when guests book with you. If you have a website, by offering a direct booking discount, guests may be more inclined to book with you as they’ll be paying less. The best part? You’ll also be making more as you won’t be sacrificing as much to the OTAs.
