8 Replies Latest reply: Sep 20, 2019 6:05 AM by irecat RSS

    Discount percentages on long stays?

    irecat Contributor

      What is an appropriate discount percentage for a one month long stay? I have had guests, this being their third season staying with me, ask the first time they stopped by my cottage seeing my rental sign about discounts. They ask for the last 4 weeks or so of my rental season, so the price is pretty low considering it is the low season. They never pay on time, always telling me this or that when I send payment reminders. They are not people who found me on VRBO/HA, but by a sign in my garden, so they don't pay with the credit card system that is timed. I am now figuring them to be pretty cheap, though they pull in with this fancy 2-seater with all the bells and whistles. They are good guests, just trying to eek out every dollar they don't have to pay.

       

      I would have to look back at their first two years, but this year (2019) when I did all the calculations, I found I gave them a 28.5% discount. Wow, I had no idea it was so high (my fault). So-o how do you all figure out discount percentages? In the past, I usually deduct what I pay myself for the weeks that I don't have to clean if people are renting more than one week. It isn't much, but again our season is short and not really a location to visit, though very beautiful, as most things close down and people just don't flock to the region off season. Since they are one month-ers, I gave them a better price than the usual amount during high season. I know I can fill those weeks and really it doesn't take me long to clean, mow etc., etc., but I believe this 28.5% is a wee bit too much for future if they want to come back.

       

      Any opinions on this matter? Thank you!

        • Re: Discount percentages on long stays?
          wildiris Active Contributor

          I don't give discounts for long stays.  There is no advantage to me in having one guest stay for four weeks as opposed to four different guests who each stay for one week.  In fact, I prefer four different guests.  I have found over the years that guests who stay for multiple weeks start to feel that my house rules don't apply to them.  I also think they can create more wear and tear on the house.  If a guest stays for more than two weeks, I also require an interim cleaning (that they pay for) after the second week.

           

          If these guests have been late in paying in the past, why do you want to rent to them again?  Years ago, I had guests who rented from me for three years in a row.  Each year there was a problem including a bounced check one year and late payments another.  They knew my payment terms and deliberately didn't follow them.  There were other problems with them, too.  I finally stopped renting to them.  Life's too short to put up with guests who feel they are "entitled."

            • Re: Discount percentages on long stays?
              scowol Active Contributor

              Since every marketplace is different, and the posters on this forum have properties all over the world, I would suggest you need to price according to your own marketplace for a monthly stay.   Try to look for properties in your comp set and go online to quote for a month and then set accordingly at a competitive, yet profitable rate.  If you only get few search results for other properties in your marketplace offering monthly stays, then you may be at a competitive advantage to minimize your discount; i.e., your availability is scarce and thus can command a premium price.

               

              For my own properties, I absolutely concur with wildiris      I previously catered to monthly guests for years and gave a steep discount (40% off). But then one day I had a cancelation for a monthly stay.  I filled only two out of the four weeks, but to my delighted surprise took in 20% more revenue.  So I was vacant for two weeks, yet made more money.  And because the property was vacant two weeks, my utilities (operating expenses) were nil.  So in the end, I came out ahead 28% compared to the original cancelled booking.  In hindsight, it is the one and only cancelation that turned out to be a welcomed cancelation because I learned my lesson.  I am no longer catering to monthly renters.

               

              P.S.  As an added bonus, my rank shot up drastically over the course of 6 months when I no longer had 30-day blocks of reservations.  While I don't know the secret algorithm, I suspect being more available for bookings came into play.

                • Re: Discount percentages on long stays?
                  irecat Contributor

                  Thank you Scowol! Good points! I don't have to worry as these weeks (Sept.) are a popular time frame here and I would have no problem renting to single week renters, if it were May and still chilly and shops/restaurants not yet open, then that is a different story. So, I can be a bit more greedy on my end and if they want to pay my price, great, if not, I know I will rent it anyway. Again, thank you...other view points are always good.

                • Re: Discount percentages on long stays?
                  irecat Contributor

                  I agree with the no advantage to renting for a long stay, there is more wear and tear with guests who stay a longer stay, especially a month, new guests to the region are not in the cottage long during the day as they are out exploring the region. And yes, you are right about guests feeling that they don't have to heed the rules. I have had two separate guests treat me as though they owned it and I was working for them as opposed to them renting my property and being my guest. One return guest even sent me a nasty e-mail when one of the weeks she wanted for this season was already booked, so yes, life is too short, but so far, though they pay late, they are clean, quiet and do take care of things on the property. If it gets bad, then I will no longer rent to them. I have my "naughty list" but as of this season, they have not quite made the list.

                   

                  I tell prospective guests that it is no shirt off my back to not offer a discount as the only amount I do discount is my cleaning fee I pay myself, and most just accept that, if they don't ask, they don't get a discount.  Thank you for your input wildiris!

                • Re: Discount percentages on long stays?
                  green_mango Active Contributor

                  Discount varies - ask yourself what you would typically make with shorter stays during that same period & round up from there.  For me, I don't discount any more in my peak season.  During my slowest months of the year I'm happy to provide a pretty sizable discount to some of my repeat guests who proven themselves to be great (50% discount) - keeping in mind those are my slowest months and I may just get 1-2 bookings otherwise.  Busiest time of the year?  No discount aside from my usual 5% off repeat guest discount. Ski season?  If I weren't rented monthly I'd get. a lot of weekend or 3 night rentals, so I add those up and my monthly rate is right around there - so I break even with renting every weekend, and if the snow season is aa bust then I come out ahead.

                  • Re: Discount percentages on long stays?
                    ohst8er Premier Contributor

                    irecat   Here's a thread Re: I have now had two ABB guests who are also owners ask for deep discounts????? that discussed the whole idea of discounting, or not, pretty in depth.  

                      • Re: Discount percentages on long stays?
                        irecat Contributor

                        Thank you ohst8er. I read a little of that before I wrote mine thinking it was more of owner's asking for discounts and what should someone do, but now I have read it in depth. Gives good insight. I was sort of thinking there was a set formula for discounts that most people may use, but there are too many variables for each property that it doesn't make sense to have any set formula. Thanks again!