Setting holiday cottage rents and avoiding costly mistakes.

March and early April Holiday Cottage Market.

I am doing the annual round of rate suggestions for 2014. Writing about this stuff is difficult because it is virtually impossible to introduce much humour or reflective observation. Rates are not a particularly pleasing or aesthetic subject. But they are important and if people are given a good steer on the basics the value of the information may be sufficient excuse for the boredom reading it.

Accordingly , I apologise in advance. If you find this useful or just find errors, omissions or can help with additions please contact me by e-mail at I hope to return to less tedious stuff in the next post but the market report for April and early May could muck things up a bit again.

So, here we go: As we set rates individually and do not use banding, each owner agrees their rates for each individual cottage. We always set rates the same as they advertise. Using some of our experience I thought to offer that information below. It is a tried and tested formula.

Setting Rates for your holiday rental property

This is the one area that causes more concern than anything else. Setting rates for holiday cottage rentals need not be such a dark art once the basics are understood. But there are some common mistakes that need to be avoided.

Charging periods / dates over the year
First, you need to work out a structure for your rental year. In the UK there are some useful web sites which will give you the basics such as the timing of bank (national) holidays; the Easter break; and school holidays and their half terms. It is also useful to include any local festivals or events that may cause a spike in demand for few days or longer.

Using an annual calendar highlight the weeks using a Friday to Thursday format.

Now, consider the seasons you feel are appropriate. Many choose four rates being, Winter, Shoulder, Summer and super peak. The Shoulder seasons are Spring and Autumn. Super peaks can arise when, for instance with The Hay on Wye literary festival, local events cause a demand spike for a week or two in the year. Select the dates to define the periods.

When you have settled all the dates and the basic charging periods now look around at what others are charging in your area for the same occupancy and quality of  your holiday let in the seasons and periods you are to use for charging. Make sure to check bookings for these holiday lets. There’s no point in taking the rents for a let that is not getting many bookings seriously; too often, the temptation of wishful thinking combined with a tendency to hope what is expected will be what people are willing to pay causes impractically high rates and lost bookings.

It is important to avoid the mistake of assuming all niches work the same way. Bookings for occupy 2 and 3 holiday lets do not have greater demand, indeed the demand tends to fall away a little, during school half terms. Demand for occupy 2 / 3 does increase during national holidays but not quite so much as for the larger occupancy lets.

It is, therefore, a mistake to factor in half terms for lower sleep number holiday cottages. On the other hand, it is a mistake not to do this for those that will sleep more.

Extras can have a different impact depending on the location. For instance, sofa beds do not attract additional rental for our inland area where they can be more positive in coastal areas. A sofa bed is a radically lower quality experience to a proper room and, unless they are in bedrooms, sofa beds tend to attract little use. This is because they are usually allocated to children or more junior party members who often go to bed before others. That being the case use of the lounge can be cut short in the evening. It is, generally, a mistake to expect increased rents from sofa beds. They may increase occupancy for one or two weeks a year but usually only at the same rents. Very often, we find, they are used as infrequently as once a year and sometimes not at all.

Putting it together
Once you have sorted out the dates, periods and rents put them all together. The first thing will be to put in the rents determined by the seasons. Then overwrite them with the rents for half terms, national holidays and festivals.

Changeovers and periods
When you have settled the rents over the year, it is worth considering the pattern of days you wish to make available for renting out. Some of our owners offer absolute flexibility. Thus, it is possible for a guest to use our automated system to decide to arrive on any day of the week and depart on any day of the week. We set rates so that lower numbers of days attract a significantly higher pro rata charge to cover changeover costs. They can choose to book anything up to 28 days in this manner.

However, many owners prefer to restrict arrival and departure days to suit the season or practical aspects of arranging changeovers. For instance, some prefer only seven day breaks in the peak periods with arrival days restricted to Fridays and Mondays. Others are happy for flexibility on arrival days but request minimum stay lengths of, for example, five days.

If you are going it alone, without an agent, this is an easy matter to decide as and when people enquire. However, if an automated system is in use, it is useful to settle on these things in advance. Although it’s more bothersome, most people prefer to use automated booking in favour of ringing up; indeed, there is a danger of losing a booking if it is necessary to call to complete the transaction.

Before you publish
If your holiday cottage / vacation rental is a new venture, it is a good idea to settle on all the rents and then go in 10-15% lower. This plan will permit you to sound out the market and when demand makes itself evident the rates can be edged up to the point where income and profit is maximised. This ploy may mean a loss of income, but any loss is usually very small compared to the losses of going in too high and painfully edging rates down to start getting expected numbers of bookings. This is a cost of marketing.

If you are tempted to include extras like a hot tub it is worth considering the cost against use and the impact it can have on rents. Three examples:

Hot Tub. It is a mistake to provide one of these for a low occupancy holiday let. Although very pleasant for guests, the use is restricted to two or three people. Low occupancy already features a far higher cost per person per head so any move to increase the rent further will be difficult even with a hot tub available. On the other hand for an occupy 10 a hot tub will be used far more heavily and the cost per person per night is lower. In this case, such an extra often pays well.

Wood burner. The advantage of this is to that it significantly increases the attractiveness of the cottage in the shoulder and winter seasons. Rents will not go up that much but occupancy and income will. If managed well, a wood burner will also reduce overall heating bills and should pay for itself as quickly as a hot tub often does in large occupancy holiday lets.

In both cases, such extras will create more changeover work which should be factored in before going ahead.

Modern cleaning equipment and products coupled with fewer fitted carpets have reduced the difficulty that pets can create. In areas where walking is a major feature, permitting pets can generate 35% or more bookings. Most guests come from towns so their animals are nearly always used to staying off furniture, although some exceptions do exist. Many owners ask for a refundable security deposit. The point is less to recover for damage and more to reduce any damage from happening. Claiming for small sums can, often, be counter-productive and generate a huge amount of upset.

There are, of course, some situations where pets on holiday cannot be accommodated. Farms with sheep dogs nearly always find this very difficult. Working dogs, though well trained, can be seriously upset by an unknown guest. It is a good tip to add that only well trained or behaved dogs should stay to avoid upset caused by holes in fences, nearby traffic danger or the simple danger of losing a pet for want of good control. Adding the proviso that dogs should always be supervised is also helpful.

The pets aspect threatened to draw things off on a tangent. Much more general information can be found on our web site at: and on the advice pages of this site.

I shall be including this work on rates at that address shortly.

If you are still reading to this point, thank you for your patience. Setting rates need not be a minefield as long as you approach it systematically, divorce yourself from your expectations, take the evidence and create a structure for rates and charging periods.

Don’t forget to contact us with errors, omissions and additions about rates. Every bit of information will be digested and added to guidance were it improves or adds to previous efforts.

01568 612467 for more.

From Country Holiday Lets

Down with rate bands. Every cottage is unique
For quality and value holiday cottages
01568 612467 for more.

A new feed back system: found here

It’s all about ‘attitude’.
I thought it would be a good idea to re-use a sub heading that appeared on the previous post. The way rents are set for holiday lets is very much about attitude. If set right, owners and guests benefit the more.

When owners come to us leaving the larger agencies they nearly always complain about being forced into a rate banding system the big operators insist they follow. The two main complaints arise either because they are expected to set rents too high so causing poor occupancy and a loss of income, or because the inflexible band expects them to under charge so creating high occupancy and leaving owners to work hard for a poor return.

We radically differ from most big agencies in the way we set rates. Our view is that as each cottage is unique, each cottage could reasonably have its own individual rates suited to its uniqueness. Sometimes, two cottages do have the same rates, but in the vast majority of cases in any one niche, such as sleep 2, the rates vary from cottage to cottage.


Using banding for a place like this would be to ignore its uniqueness. Click on pic for more

This is possible because we are flexible enough to do this. In addition, unlike many large organisations, we encourage owners to start with lowish rates and then to lift them to meet demand. Being free from the tyranny of rate bands, this is easy for us to implement and, quite frequently, we find that after initial bookings rates can be gently lifted to their optimum level.

This approach is more sophisticated and sensitive to the market and minimises costs that so often accompany taking a blind stab at rates which turn out to be too high and then painfully and gradually inching them down to start getting a decent income. The costs of going in a bit low and inching up nearly always much lower than, simply, not getting the bookings at all. There are costs, but they are justified marketing steps and radically reduce the all or nothing risk or setting rates blindly using gut instinct or just imagining what your let is worth.

Banding would also not do this one justice.

The market is, sadly, littered with owners who have learnt this lesson the costly way. Of course, the other reason why we need to be flexible with rates is because we often work alongside owners, already with their existing rates, who use us as an additional source of bookings. This is particularly important in an area where the market is highly competitive and one which has some way to go before the general cottage market recognises it as a holiday destination in its own right.

Large organisations tend to try to force owners into a framework which makes it easier for them to set up and administer their commercial empires. They can be so powerful and pervasive that the market is partly determined by their practices. This can be for the positive. For instance the move to changeover days on Fridays and Mondays was led by and accelerated by very large agencies and the rest of the market followed. It opened up the Weekend and Mid Week short break market which have proved so successful in recent years.

This delux 5 Star has individual rates with flexible changeovers. Click on pic for more

We took a step further and for several of our featured cottages you can book to arrive and depart on any day of the week so offering the ultimate in changeover flexibility. This is often restricted for certain parts of the year such as the Christmas break for obvious reasons.

The beauty of places like The Long Mynd, The Golden Valley, Hay Bluff, the Wye, and the Borders as well as large tracts of Herefordshire and Shropshire is astonishing. It is closer to major UK cities and offers wonderful places to stay on holiday. But owners have to market harder to break into the holiday market and show how much this area has to offer, so making our local service that much more attractive.

Success depends on attitude. In this case, it is attitude towards flexibility and respect for what the market wants. I can’t say that we are as flexible as we would like because other factors, such as IT, can sometimes restrict us. But we are working on it!

01568 612467 for more.

A new feed back system: found here


Confusion pricing, cottage owners and good value

From Country Holiday Lets For quality and value cottages

Ring 01568 612467 for more information.

The picture theme is the Welsh / English border in Autumn

There is no arguing about, it 2012 has been a tough year for UK cottages. We have faced an economy on the slide, an increasing supply of cottages and weather that is so bad, you are tempted to think some greater power is trying to give home owners a message as they battle to keep up occupancy in the face of repeated deluges.

Autumn on the English side of the border

It is testament to the strength and quality of many cottage operations that they have kept their ends up and trade has been little different from 2011. The other half, especially the legacy quality bunch, are taking what can only be described as a beating. Next year, they will find that what they thought was a rather nasty one-off was, really, a very serious warning. I suspect, from seeing little action on their part, that half the market will have something close to a terminally bad 2013.

Brampton Bryan. Close to the Welsh Border

The good thing for us and for all those cottage owners with a practical respect for the guests and what the market wants is that next year could be as good, if not better than this one. But medium and small booking services such as ours as well as many thousands of independent go-it-alone cottage owners are facing a new and rather ugly development in the UK cottage market.

The summer house at Little Gem link with a rare and beautiful view

Some of the major legacy agency booking services with massive influence are increasingly adopting confusion pricing and, what seems to be, marketing and selling techniques not so dissimilar to those used by large supermarkets.

Confusion pricing can take several forms such as ‘two for the price of one’, temporary increases in size or the amount of a product, wild price swings, special offers, vouchers, points, etc:. Of course, cottages of their nature, cannot be made larger etc:, but some rather disturbing things are afoot.

The view from the summer house

In recent weeks, we have seen some large agencies offering 50% discounts on rate card prices. Yes, half price. And these are not for the difficult to fill low seasons but have applied during the peak summer period. ‘Deals’ seem the in thing. Agency stipulated price reductions and ‘deals’ are becoming the rule rather than the exception and have become part of an operating year for most owners who appear to have little choice, in many cases, but to swallow what their agencies tell them to accept.

Near Clun. You drive over the hill and the view spreads out in front

‘Carrotting’ potential guests by such crude and deceptive devices has created an attitude in part of the market that unless you offer ‘deals’, in some way, you are trying to cheat people by charging the advertised price. Simple, clear pricing is transformed into, it seems, owners trying to cheat potential guests by charging over the odds. This is the other side to the ‘deals’ offered by some large legacy agencies.

Just above Knighton in Wales

A large part of the market becomes infected. Thus, cottage owners advertising quality and value at reasonable prices often fail to get guests because an advertised price is now seen as a starting point to haggle down to what potential guests believe is good value. They have been trained to do this by large legacy agencies treating them as if they were stupid.

A remote cottage in Wales

If you persistently advertise prices that are too high and persistently offer ‘deals’ people, naturally, tend to assume all advertised prices are poor value by definition. It is easy for a legacy agency to cut prices because they still get their cut, but operators can find themselves working at close to break even or even at a small loss, while the agency continues to benefit from a positive income.

Small independent cottage owners are paying for confusion pricing now used by many large booking services. This puts them at a competitive disadvantage, as if they were a corner shop competing against a large supermarket. Small shops cannot offer ‘deals’ in the same way as supermarkets and they cannot run loss leaders and all the rest and remain in business.

A similar divide is opening up; as the large booking services struggle to keep their dominance of the cottage market, so independent cottage owners will face increasing difficulty as the terms of business become increasingly confused and difficult to negotiate. This is, of course, exactly what some legacy operators want.

Late Autumn light in Wales on the English border

Although we offer owners the opportunity to use discounts and offer ‘deals’, where some do, many choose not to do so. Choice is what it is all about.

These are difficult times. The way a market behaves is bound to change as pressure increases. How independent owners handle confusion pricing will be interesting. I believe that as things get really tough there will be an initial surge in ‘deals’ and then people will begin to insist on simple and clear pricing. They will lose patience with ‘too clever by half’ selling.

Clear, good quality at a sensible price will win the day in the long run. Meanwhile, we may have to put up with some people taking a cue from some large legacy booking services when they ring up, automatically expecting to strong arm prices down and make ‘deals’ as if it were a right to force an owner to take a lower price.

Christmas at Little Gem link

The attitude that refusal to cut a price is a sign of a cottage owner trying to cheat guests is pernicious and unfair. We all have to make a living and offering quality and value is what it is all about. Cutting a price to the point where Quality and Value turns into Quality and loss making is best left to those legacy quality cottage owners who might never get the message.