Did you know that around 93% of customers use a coupon code throughout the year? Whether it be from newspapers to use at the supermarkets or finding exclusive deals when shopping online, they’re always looking for the best price.
When it comes to planning a vacation, more and more travelers are looking for a good deal these days. They research the best deals for flights, and will even change their travel dates according to lower prices. The same goes for car rentals, and you guessed it, accommodation.
We’re not encouraging you to lower your prices, but rather introduce coupon codes in your business to target more guests and increase your bookings. Travelers want what’s known as a “unique opportunity,”i.e. a good service at a lower price. They don’t want the cheapest vacation rental on the market, but the vacation rental of their dreams at a price they feel is fair and they are saving on.
Coronavirus Update
Due to the outbreak of the coronavirus, many vacation rental hosts have seen cancellations, however, there are still ways you can increase your bookings despite the outbreak. One of these ways is offering a discount to guests to use at a future date. For example, you can offer a promotional code for summer or later in the year. Let guests know that if they book now, they will have your rental secured at a lower price. It works in your favor too, as you may be getting an income right now.
How competitive pricing is better than discounts
As a vacation rental host, understanding dynamic pricing is one of the best things you can do for business. Competitive or dynamic pricing is the practice of modifying your rates to reflect demand. Your pricing strategy is a careful balance of putting a real value on your property and the experience it offers, while also making potential guests feel like they are getting more than they are giving.
If you’re confident that your rental is worth the price you’re asking, you don’t have to feel obligated to throw a sale or discount in to make the sale. If your discounted rate puts your property at a lower price point than competitive properties in the area, it could send up a red flag for guests.
Things to take into account before offering discounts
If a guest asks for a discount and you give it without hesitation, a guest will wonder why it was so easy for you to drop the price. It may encourage them to look for other areas where you could drop the price. This could end up costing you money. Be selective in where and when you offer discounts and don’t just give them away.
If you’re regularly offering discounts to finalize the booking, it could mean that your price is too high. Consider lowering your rate so that your price more accurately represents the value of the home and the experience.
When travelers see an automatic discount or sale on a property, it could cause them to be suspicious. They may assume that for some reason, people aren’t booking this home. While they might still make the reservation, they could be more critical about the experience. They may be looking for the reason that the home has been discounted.
Discount scenarios
Discounts aren’t inherently bad and can be a smart marketing strategy when used correctly. Here are some of the most common discount scenarios a vacation rental host may come across and how to handle them:
The guest that is looking for the lowest price
Some guests are only concerned about the bottom line. They’re on a budget and are walking into the booking process looking for a way to reduce the price. If you’re confident in your competitive pricing strategy, you can confidently direct the potential guest to your rates and help them see the value in the property. If it’s a slow season and you’re trying to fill some vacancies, you may want to offer a discount to close the deal.
Get to know the traveler and try to learn what else is important to them, besides getting the lowest price. You may be able to stick firm to the price but throw in an amenity that will help them enjoy their vacation.
The guest that’s willing to negotiate
In the vacation rental industry, there’s a time for negotiations and a time for firm pricing. If an eager traveler is trying to get a discount during peak seasons, you can find a compromise without negatively impacting your bottom line. Point out other days where you could accommodate the price that they’re asking, but you can’t do it for those peak season dates. If they’re insistent, stand firm and find other ways to add value to their experience without losing money.
The last-minute haggler
Sometimes a guest will get to the very last step of the booking process and then ask for a discount. They know that by getting this far in the reservation process, you’re committed to following through and do not want to lose the booking. This can be a smart negotiation tactic on their end, but it doesn’t mean you have to drop the price dramatically last minute.
Agree to offer a small discount if the guest books right then, or at least within 24 hours. If saving the booking means offering a last-minute discount, especially during a slow season, do it. But encourage the guest to do his/her part by finalizing the booking.
The loyal guest
One of the best parts of being a vacation rental host is meeting new people and being a part of their vacation experience. Offering a discount to a loyal/repeat traveler is a great way to build this relationship and encourage future bookings. This loyalty discount makes the traveler feel special and appreciated.
Different types of vacation rental discounts
There are many different ways to compromise when it comes to offering a discount for your vacation rental. Some travelers are looking for a reduction in the nightly rate, while others are hoping you can throw something extra in to enhance their experience. Experiment with different types of discounts to find the strategies that work for you and your target audience.
Some discounts you can offer are:
- Stay 5 nights get 1 free
- Free pool heat
- Free ski rental
- 10% off the entire stay
- Free late check out
- Free early check-in
- Free welcome basket
Or you can also consider offering discounts for specific groups of people like:
- First responders
- Teachers
- Military
- Seniors
- Last-minute travelers
- Business travelers
- Family reunions
- Local residents/ staycations
Getting to know the travelers will help you understand what they are wanting and expecting for their vacation experience. This will help you modify your pricing and discounting strategies to make the most money while still offering the ultimate guest experience.
How To Manage Discounts
There are many advantages to offering a discount. It appeals to travelers more, knowing they are getting a good deal, as well as you as a host getting ahead of your competition. So how do you manage and offer promotions? In this article, we’ll explain 6 ways how:
1. Analyze Your Guests
Do you have an idea of who your typical guests are or what kind of travelers are most interested in your property? If you know the needs of your guests, you will know what kind of discount or opportunity will interest them most. If they are couples who usually travel on weekends or like to spend a long weekend, a 3 for 2 nights may encourage them to end up booking your property. If they are millennials who tend to make last-minute decisions, an offer with an expiration date could win them over.
2. Make Your Own Discount Code
With Lodgify’s website builder, you can easily make your own coupon code for guests to use on your website. You can create these promotions based on length of stay, booking date and stay date.
Once you’ve set up your promo code, you can send them to all your past guests through marketing emails. Let them know it was a pleasure having them at your rental, and they can book again with a special promo code. For example, you can offer guests 20% off their total rate if they book within the next 48 hours. Opportunities for past guests are very effective in building customer loyalty.
Special deals are also a great excuse to follow up inquiries that did not turn into bookings. You can also include these travelers on your mailing list when sending out your promo codes.
3. Share On Social Media
Now that you’ve got your discount code, it’s time to actually promote it. Social media is a very effective way of marketing, as it will get your business in front of prospective guests and reach an even further audience.
Nowadays a majority of travelers follow brands on social media to access promotions and discounts. So you can give your followers what they want by posting deals and special offers.
Facebook is a great way to get the word out quickly. So if you’re ready to offer a discounted rate, let your followers know. Post your offers on your own Facebook page, and share it in travel groups and groups in the local area. Instagram is also a great tool, as you can post stories and include your promo code there.
4. You Make The Rules
The discounts should not only help guests out guests, but they should also be beneficial to you and your business. Once you know what kind of promotions you wish to execute, and what kind of travelers you want to target, it’s time to make a strategic plan for yourself.
Create special offers, discounts, packages, and opportunities by calculating your profit margin. It’s important to understand your financial situation and make sure that discounts won’t leave you out of pocket. For example, don’t advertise any discounts that won’t let you maximize your profits. Remember that promo codes are a way of advertising your rental and increasing your occupancy, so don’t get carried away!
5. Showcase Your Property
You’re not only advertising a deal, but also your vacation rental property. Tell guests what they can enjoy if they book your rental, for example, a welcome basket with local products, a swimming pool where they can rest on their vacation, or any other amenities included in your rental.
6. Look For Opportunities In Your Calendar
Take advantage of the discounts and offer stays when you anticipate not having many bookings. For example, it’s a Thursday and you don’t have guests for the weekend? Announce a last-minute offer on all your channels.
Take holidays and seasonality into account, for example, the Fourth of July and plan discounts around them. The low-season is also a great time to offer added-value deals. If you’re finding it hard to fill the calendar out of season, create promotional codes for that specific time.
By offering your guests added-value deals such as three nights for the price of two, or a whole week for the price of four nights, you might find you’re able to fill much more of your calendar than you originally thought.
Now you know how to manage discounts on your vacation rental website and turn them into a beneficial opportunity for both you and your guests. Increase your bookings with these top 6 tips!
