Minimum night stays and seasonal pricing are one of the easiest ways to grow your profits.
If next year you achieved the same number of nights booked, but you changed these two factors, then you’d have more money in your pocket.
And you can play it safe.
In the beginning, start out slowly. Make small changes, and only do them during the peak periods in your area’s calendar.
Then as your search rank listing improves over time, you lean into these options more and more.
Eventually you’ll have slashed your annual number of turnarounds, and made a huge improvement on your overall profit.
Let’s jump in and see how you can get that ball rolling.
Thousands of performing properties around New Zealand have proven that if you increase your minimum night stay, you don’t lose bookings.
It’s simple. They do it at the right time of year.
Example: A Spring & Summer High Season Property
So let’s say your property does well when the weather is warm.
If this is you, you’ll be well aware that within the “high season” there’s an approximately two month period that’s always fully booked.
For the sake of our our example, we’ll call this two month period the “peak season”.
For summer properties the peak season runs from around the 19th December to the weekend around the 9th of February. At a MINIMUM.
It’s this period where you can really take the gloves off and push out your minimum night stays.
So for our example, let’s say that from 19th December to the 9th February is 53 nights total.
53 nights ÷ 2 night minimum = 26 turnarounds max
53 nights ÷ 3 night minimum = 17 turnarounds max
53 nights ÷ 4 night minimum = 13 turnarounds max
53 nights ÷ 5 night minimum = 10 turnarounds max
This is your road-map. Start at 3 nights. If it goes well, push it out to 4, and so on.
What would the difference in cleaning bill, if you shaved 6 turnarounds off your total for a one and a half month period. How much time, money and stress would you save.
And what about reducing your turnarounds by up to 16 during a 53 day period?
This wouldn’t only affect your bottom line through a reduced cleaning bill.
Leveraging minimum night stays makes your business easier to manage. Think about the reduction in emailing as you handle enquiries… Of how much this would reduce the handling of guests, their expectations, and their problems.
But for minimum night stays to be effective to need to use them consistently across all your booking platforms.
But what minimum night stays are realistic for you?
During the peak period, if you have a family rental, your goal is to eventually push your minimum night stays out to at least 5 nights.
If you cater to couples, a 4 night minimum is an attainable goal.
How much you can push the envelope this season depends on how successful you are already.
The best way to determine your success is to look at your place on search rankings. Also if you’re not taking strong bookings for your high season, 6-8 months out, then you need to up your game as soon as possible.
All public holidays should be set to a three night minimum. In some cases four night minimum.
This ensures you don’t take a booking for two nights, only to later receive a request for a longer booking.
If you don’t change the minimum night stay for a public holiday, that two night booking is going to be all you take for that long weekend. You just left money on the table.
What other dates? Well, that’s up to you. You can try this out on any periods where demand is high.
Just like minimum night stays, you may have two or three different price policies for the low, high and peak seasons.
Pricing like this isn’t entirely necessary, with many properties using just two price points.
To decide how much you can change your pricing, take a look at what other properties like yours are doing in the area. If you think you can lift your prices, try it out in a conservative manner.
Note that if your property is under-performing, it makes a lot of sense to price just below the market rate on both Airbnb and Bookabach. This undercutting is a short-term strategy that will boost your search ranking on these platforms.
As we talk about in this blog on Bookabach, the act of taking bookings creates a virtuous cycle or snowball effect which leads to your property rising up the search ranks and your property becoming more busy.
And congratulations. If you read this blog through, you now know more about pricing than 99% of the other properties in the market.
If you want to learn exactly what is required to dominate the search results and grow your business, download our holiday house growth guide.