Not long ago, vacation rental rate structures were simple and straightforward. Rates were set in advance with the property owners prior to when the “annual vacation planner” went to print. There were no flash sales or last minute discount email blasts. Capacity restrictions were minimal, limited to “Saturday-to-Saturday” or “four-night minimums.” Guests could easily grasp the idea that it costs more to visit the beach on July 4 or to go skiing on February 14.
Distribution channels were easier to manage as most reservations came in by phone calls or via direct website bookings, and pricing was opaque as it took time to shop competitors for an “apples to apples” comparison.
In recent years, VR managers became more adept at watching demand trends, while advances in property management systems simplified the adjusting of rates according to demand. Marketing executives realized that discounts and promotions could increase sales during periods of lower than expected demand; they also began using stay pattern restrictions to optimize yield when demand was strong. At the same time, pricing became transparent as listing services and online travel agencies made it easy for consumers to compare rates.
As a result, today’s agents are required to convey complex rate structures to the most educated callers our industry has ever had! Therefore, reservations sales agents need the skills to respond to the many challenging questions and objections they receive daily.
Here’s another perspective: The “normal” rates are the high-season/top tier rates. It’s not that we raise rates when it’s busy, it’s that we lower them when it’s slow! Example: “July is a fantastic time here at Beachtown USA so our prevailing rates apply. However, we always offer lower rates whenever it’s slower. Are your dates flexible?” Revenue managers love agents who shift demand to lower-rated dates because that’s when occupancy is needed.
Most companies seem to find that the higher-rated properties tend to rent first. This might include ocean front condos, first row beach homes, or condos closest to the lake or ski lift. It might also include homes with the most contemporary décor and furnishings. Without training, when your agents do a search and find these options are already booked chances are they are saying “Oh, all we have left at that time is…” Instead, they should position remaining options as still being a good value by saying “Fortunately, at that time we still have…” If there are glaring deficiencies about the décor or location they should point those out so as to manage expectations, but they should then continue on to mention the positive attributes of the remaining options. To maximize revenue all properties must be booked!