Anyone adjusting rates for next year?

Question

I had already been tweaking rates for next year, but I got an email from VRBO today urging me to follow the link and do just  that. Not surprised at all when their suggestion was to lower my rates.....

As a businessman, when you are already achieving and/or surpassing your goals, it is not time to lower prices, it is time to raise them. My plan was to go up by approx 10% and then tweak further according to the busy dates we saw in 2020 and 2021.

I'm personally confident that STRs will continue to be on the uptick in years to come as I see them still as a relatively undiscovered phenomena. I suppose a horrendous increase in inflation could damper that a bit, but people that travel have money and it would take a lot to make them stay home.

What do y'all think? What are you planning on doing to your rates next year?

Bruce Woodruff · Answer

We take bookings out 12 months.

Michael Baum · Answer

I raised my rates for 2022. So far we are booking pretty steadily. I would have to say not as fast as last year, but I think most of last year was COVID "GTFO of Dodge" type of bookings. I am getting more questions first, but still, looking good for 2022.We had a long Thanksgiving family (8 days) and have a Christmas through New Year family as well.

Joshua Strickland · Answer

I let Pricelabs do my adjusting. But have raised my premium on bookings more than 60 days in advance.

Joe Splitrock · Answer

@Bruce Woodruff I have a travel nurse in through March and then I have a couple coming from Arizona for the summer. Their reservation is a soft reservation, because they didn't want to pay the deposit to hold, which is non refundable. They should have paid, because now rates are going up for next summer.

Looking at our expenses, it is hard to not raise rents. Insurance, taxes and utilities have all gone up.

It figures that VRBO would ask you to lover rates. I kept getting that from AirBNB, even though we stayed fully booked at the higher rate.

I think vacation rental homes are going to keep having demand, but there is some risk as hotels recover or if we dive into recession. The last hotel I stayed at told me there was no daily room service or breakfast available due to staffing. They are really having trouble rehiring people.

Ryan Moyer · Answer

I have mine raised right now.  Definitely not booking out heavily or anything, but a few bookings here and there.

Next year will be interesting.  A bit of a suspected pullback after the big summer so far.  My places are doing okay but I see a lot of panicking in a lot of the STR facebook groups where people say they've been doing this for ~5 years and this is the worst Nov/Dec/Jan they've ever had.

At the prices some people got in at, a summer where prices/occupancy retreat to 2019 levels (much less lower than 2019 like some people are seeing this winter) would be pretty catastrophic for some.  I don't think it will happen personally.  I think everyone is just taking a little breather from travel after summer, but it's definitely at least been a little bit of a wake-up call for some I think.

John Underwood · Answer

I plan on bumping them, definitely not lowering them.

Mine by default are automatically high so that I don't get blind sided with a low price for a 3 day weekend or special event.

Once I review them I lower them to MY normal high levels. I love Vrbo's Analytics as it lets me see if there is demand coming for a time period that I was un aware of.

Dave Stokley · Answer

How far in advance are you talking? We typically only take bookings 3 months out, and the next three months are pretty slow in Cleveland. Big picture though I do think rates should increase next year, especially for established, well-reviewed properties. The new features that Airbnb is introducing seem geared toward attracting more hosts, so I can only assume demand is increasing much faster than supply.