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Ever since I started my career in the vacation rental industry in 2010, pricing has been the hottest and most talked about topic. It’s no secret that learning how to price your vacation rental is the basic building block to success.

But what if there was a part of your pricing strategy that you were overlooking completely? Something so obvious, so simple, yet so rarely talked about. Something that has the potential to make or break your booking performance…

So what is it?

The presentation of your rental rates and fees to potential guests.

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In 2004, psychologist Barry Schwartz wrote a book called “The Paradox of Choice ­– Why More is Less“. He argued that eliminating consumer choices can greatly reduce anxiety for shoppers.

This theory, in some way, is applicable to vacation rental pricing. More specifically, how we present rental rates and fees to potential guests and the impact that presentation can have on conversion rate.

It’s possible that the more price-related line items we show, the more potential there is to stress and overwhelm consumers. And the more stressed and overwhelmed a consumer feels, the less likely they are to convert.

The purpose of this article is to get you to thinking about different ways of approaching pricing. The greatest achievements I’ve had throughout my career came from my willingness to experiment (A/B testing, taking unorthodox approaches to pricing and marketing, etc) and it’s something I encourage each and every vacation rental owner to do.

Here are some of the pricing presentation strategies that I’ve implemented myself, or that I’ve observed others in the industry using.

What different vacation rental pricing presentation strategies exist?

Generally, there are three different strategies available for vacation rental owners to choose from. Let’s take a deeper look at what those three pricing presentation strategies are, as well as the pros and cons for each.

Strategy #1: Transparency

The transparency strategy shows guests a complete line item breakdown of the base rental rate and fees that are included in the total.

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Pros:

  • Transparency can facilitate trust.
  • Makes it easy for the guest to understand which services are/aren’t included in the total price.

Cons:

  • Can be visually overwhelming and stressful for the guest to see multiple line items (more is less theory).
  • Stress can deter the guest from booking.
  • The guest can see exactly what you are charging for each service that is included in the total (e.g. “they’re charging me how much for linen rentals?!?”).
  • Your competitors can see exactly what you are charging for each service that’s included in the total (e.g. “they’re only $80 for cleaning service and we’re only charging $60”).

Strategy #2: Consolidation

The consolidation strategy minimizes the amount of line items that are displayed to the guest by consolidating all rates and fees into a single line item.

pricing_presentation_consolidation

*Side note: This is the presentation strategy we use at SoCoastal Vacation Rentals. We chose this specific strategy in an attempt to offer the visitors to our website a consistent pricing presentation experience. Consistency is important to us, and something we feel is overlooked by other vacation rental listing sites and OTAs.

Pros:

  • Can be less stressful and less visually overwhelming for the guest to see less line items (more is less theory).
  • This lack of stress can improve conversion rate.
  • Makes it very difficult for guests and competitors to reverse ­engineer your fees and leverage that knowledge against you.

Cons:

  • Makes it very difficult for the guest to understand which services are/aren’t included in the total price.
  • Can make it seem like your Base Rental Rate is high, when comparing to other vacation rental owners that use the transparency strategy.

Strategy #3: Hybrid

The hybrid strategy is a combination of both transparency and consolidation strategies.

pricing_presentation_hybrid-1

Pros:

  • Can be less stressful and less visually overwhelming for the guest to see less line items (more is less theory).
  • Lack of stress can improve conversion rate.
  • Makes it moderately difficult for guests and competitors to reverse­ engineer your fees.
  • Makes it easier for guests to understand which services are included in the total price.

Cons:

  • Can make it seem like your base rental tate and fee amounts are high, when comparing to other vacation rental owners that use transparency or consolidation strategy.

What to take away:

  1. The presentation of your pricing is just as important as the pricing itself.
  2. There are multiple pricing presentation strategies.
  3. You should focus on choosing the strategy that best suits your rental business.
  4. Don’t be afraid to experiment with different presentation formats.

Now it’s over to you: what vacation rental pricing presentation strategy do you currently use and why? Do you believe that more line items could have a negative impact on conversion rate? Let us know in the comments!

About the Author:

justin_socoastalJustin Urich is the CEO & Founder of SoCoastal, the East Coast’s fastest growing resource for hand-picked and professionally-managed beach vacation rentals.

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