Pricing has been the most hotly debated issue since I began working in the vacation rental sector in 2010. Understanding how to set your vacation rental’s price is the cornerstone of success.
But what if you were completely ignoring a component of your pricing strategy? Something so clear and uncomplicated that it is seldom ever discussed. Something that could make or destroy your ability to book clients.
What is it, then?
The explanation of your costs and rental rates to prospective visitors.
Barry Schwartz, a psychologist, published “The Paradox of Choice – Why More is Less” in 2004. He suggested that restricting customer options can significantly lessen shoppers’ anxiety.
Somewhat related to vacation rental pricing is this notion. More specifically, the presentation’s impact on conversion rate will depend on how we communicate rental rates and fees to potential guests.
The potential to overwhelm and upset consumers may increase as we display more price-related line items. Additionally, consumers are less likely to convert if they feel anxious and overloaded.
This article’s main goal is to urge you to consider various pricing strategies. My willingness to experiment (A/B testing, using unconventional approaches to pricing and marketing, etc.) has led to my biggest professional successes, and I urge every holiday homeowner to follow suit.
Here are a few pricing presentation techniques that I either use personally or have seen others in the business do.
What various methods of presenting the price of a vacation rental are there?
There are generally three options available for holiday rental owners to select from. Let’s examine these three pricing presentation styles in more detail, as well as their benefits and shortcomings.
Method 1: Transparency
The transparency strategy gives visitors a detailed line-by-line summary of the base rental rate and other associated costs.
pricing presentation transparency
Pros:
- Trust can be facilitated by transparency.
- Facilitates the guest’s understanding of the services that are and are not included in the total cost.
Cons:
- Multiple line items can be visually overwhelming and upsetting for the visitor (more is less theory).
- The guest might only book if they are relaxed.
- If a guest asks, “They’re charging me how much for linen rentals?!,” they can see exactly how much you are charging for each service that is included in the total.
- The prices you charge for each service that is included in the total are visible to your rivals (e.g., “they’re charging $80 for cleaning service, whereas we’re only charging $60”).
Method 2: consolidation
By combining all rates and fees into one line item, the consolidation technique reduces the number of line items that are displayed to the guest.
As a side note, SoCoastal Vacation Rentals employs this presentation technique. We made this decision to provide website users with a uniform pricing presentation experience. Other OTAs and vacation rental listing websites overlook consistency, which is crucial to us.
Pros:
- The visitor may experience less anxiety and visual overload if there are fewer line items (more is less theory).
- The conversion rate may increase due to the reduction of stress.
- It makes it incredibly challenging for customers and rivals to reverse-engineer your fees and use that information against you.
Cons:
- This makes it extremely challenging for guests to comprehend which services are/aren’t included in the overall price.
- When compared to other vacation rental owners who employ the transparency technique, it could give the impression that your Base Rental Rate is high.
Method 3: hybrid
The hybrid strategy combines both consolidation and transparency techniques.
Pros:
- The visitor may experience less anxiety and visual overload if there are fewer line items (more is less theory).
- Stress reduction can increase the conversion rate.
- It makes it slightly more difficult for customers and rivals to calculate your fees.
- It helps visitors understand which services are covered by the total cost.
Cons:
- As compared to other vacation rental owners who employ transparency or consolidation techniques, you can give the impression that your base rental rate and fee amounts are excessive.
What to remember:
- Just as significant as the pricing itself is how you offer it.
- There are numerous methods for presenting pricing.
- The strategy you use should be tailored to your rental business.
- Try out several presenting formats without hesitation.
What pricing presentation technique do you currently employ for vacation rentals, and why? Would adding more line items reduce the conversion rate? Comment below and let us know!
