The Secrets to Securing Long-Term Bookings

Pricing strategy is a debated topic in the world of short-term rentals, and is especially controversial during the months of January and February, when bookings are sparse. Today, we are going to explore a strategy I’ve personally used to stay profitable during the slow season.

In this week’s edition of The Rental Digest:

• Winter Is Approaching: Are Long-Term Bookings viable, and how do we secure them?

• Host Hack: $10 Coffee Sorcery.

• Around the Web: Hurricane Milton Showdown, The Danville Airbnb Boom, Co-Host Power Move, and Rentals on the Rise.

Let’s get into it…

Winter Is Approaching:

Are Long-Term Bookings Viable?

It’s worked incredibly well for me in the past, but, to be honest, it depends on the property. If you’re considering changing your pricing model to focus on long-term bookings, here’s what you need to know:

The nightly rate is critical, as it’s the main lever you can pull as a host that directly impacts your bookings, and overall occupancy rate. If your price is too high, you risk lowering occupancy and, therefore, revenue. If your price is too low, you may miss out on potential revenue, even if your occupancy is high.

Understanding this is a key responsibility for hosts when it comes to pricing strategy.

Let’s say you manage a 2-bedroom, 2-bath property, and your typical monthly revenue goal is $5,000. There are a few ways to achieve this:

• $238 Nightly Rate, 70% Occupancy (21 days/30)

• $208 Nightly Rate, 80% Occupancy (24 days/30)

• $185 Nightly Rate, 90% Occupancy (27 days/30)

• $166 Nightly Rate, 100% Occupancy (30 days/30)

Here are the key takeaways:

 1) Work backward when adjusting your prices. Knowing your revenue goal is essential.

2) By charging a lower nightly rate, so long as you entice a long booking, you can still reach your monthly goal.

But How Do We Actually Secure Long-Term Bookings?

In 2021 I was managing a large portfolio of properties for a Real-estate Developer here in San Diego. My boss at the time made it clear that he couldn’t afford to have an unsuccessful slow season, and that I had to do everything in my power to avoid any lost revenue.

I was nervous, because I believed it was unavoidable. People travel less during the months of January and February, I thought, and that means less revenue.

However reluctant my thought process might have been, I decided to figure it out. And here are the 3 most important aspects of what I learned that you can implement today to secure long-term bookings:

1) Although it may seem counterintuitive, securing long-term bookings requires leaving your calendar completely open.

• To do this, you can use Airbnb rule sets. Set a specific rule that significantly increases your nightly rate, discouraging short-term bookings. This keeps your calendar open for longer stays—remember, a guest can’t book a two-week stay if there are gaps in your availability.

• For example, if your usual nightly rate is $200, apply a 100% increase, raising it to $400. Then, add a Long-Stay Discount that aligns with your monthly income goal. If your target is $5,000 a month, adjust the 30 night discount to achieve that.

• While this might seem like it will deter bookings, remember the goal is to secure just one long-term stay. The price hike also makes guests feel like they’re getting a deal. For instance, $166 per night feels like a bargain compared to the listed price of $400.

2) Update your description, images, and title to attract long-term guests.

• Use phrases like “Cozy Queen Suite, Perfect for Long Stays,” and help guests picture their stay with lines like “Live like a local by exploring nearby coffee shops” or “Enjoy a night in with a fully equipped kitchen.”

• Grab their attention right away with pictures of coffee makers, kitchenware, and other items that appeal most to long-term guests.

3) It’s much harder to get last-minute bookings during the slow season, so plan ahead as much as possible.

• This means adjusting your property accordingly months in advance.

Host-Hack of the Week

The Service Recovery Paradox suggests that resolving an issue well can leave guests even more satisfied than if no problem had occurred.

To prevent a coffee maker issue from ruining a guest's morning, keep a spare $10 coffee maker in a sealed bag in the back of a closet, or on a high self with a friendly note.

Instead of a guest’s morning being ruined, you’ll save yourself time and make their trip that much better.

You can thank me later.

Across the Web

I hope this helps!

Until Next Week,

Tony