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Balancing fees and discounts in your vacation rental pricing

Perfect your traveler-friendly pricing strategy by offering minimal fees and enticing discounts.

author
Becca Glenn

March 7, 2024

Revenue performance Traveler experience Vacation rentals

Dreaming about, shopping for, selecting, and booking a vacation home are all critical points in the traveler journey that begin far in advance of their stay. To start the journey off in the best way possible, it’s critical that your pricing and fees are clear and compelling. While travelers understand that some fees are a part of the vacation rental booking process, fees that are perceived as unnecessary or higher than they expect could push travelers towards a different listing.

 

On the other hand, discounts can entice travelers, making your property more appealing as they search for their perfect accommodations. With the right transparent pricing strategy, you can increase your vacation rental bookings and maximize revenue.

Read on to learn more about the three key pieces that go into a traveler-friendly pricing strategy.

Communicate clear, transparent pricing

Vacation rental fees are any extra charges beyond your nightly base rate and are often used to compensate hosts and property managers for additional services or amenities. On our platform, you can choose between two types of fees:

  • Standard fees: commonly used to cover things like extra guests, cleaning, and pets
  • Custom fees: any additional fees beyond standard fees that are unique to your property

 

Travelers are generally aware of and comfortable with standard fees — however fees for things like basic utilities or internet are viewed as superfluous and can deter travelers from booking. In these cases, we recommend baking these costs into your base rate.

 

For most travelers, well-explained, necessary fees aren’t going to prevent them from booking. Here are some general tips to ensure you are communicating clear and transparent pricing that will appeal to travelers:

  • Do provide adequate detail and transparency around the fees you’re charging, such as a cleaning, pet, or extra guest fee
  • Don’t include vague fee labels, such as ‘administrative’
  • Don’t impose excessive fees that are not proportionate to the services you’re providing, such as charging for basics like bath linens 

Establish straightforward fee structure

The number of fees charged also matters to guests. To keep travelers ready to book while appropriately compensating your business for extra services, here are some ways to create a straightforward fees structure that is simple for guests to follow:

  • Keep separate fees to a minimum. Seeing a long list of fees in your final price quote can scare travelers off, so avoid listing more than one to two fees.
  • Roll standard fees into your nightly base rate for upfront transparency — as long as it doesn’t drive up your price outside of the range of your competition. Pro tip: You can roll all costs into your base expense and avoid charging fees altogether.

How to adjust your fees

To adjust or restructure your fee strategy, follow these simple steps:

  1. From the owner dashboard, select Calendar in the main navigation
  2. Select Settings and Fees
  3. From there, you can update both standard and custom fees
Standard fees:
  • From the fees page, enter a dollar amount for each standard fee that applies to your property
  • Select the Fee type and then Save
Custom fees:
  • From the fees page, select Add custom fee to add up to 6 custom fees
  • Select a Fee name from the available options
  • Enter a dollar amount, select a Fee type then Save

Remember, fees are not required, so if you don’t want to charge them, leave the fields blank.

A product graphic showing how hosts can update their fees from a dashboard.
Easily update your fees through your owner dashboard.

Balance pricing strategy with discounts

Since we know travelers value price, incorporating discounts into your pricing strategy can be an effective way to incentivize them to book. Discounts could include:

  • New listing discount: You get a badge to show travelers that you recently joined Vrbo and appear under a special new listing filter, enticing travelers to book with you for a discount.
  • Weekly or monthly discounts: Provide booking incentives for longer stays, which help reduce the hassle of managing turnover for shorter stays and guarantees your revenue for a longer period. Balance pricing strategy with discounts.

How to set up discounts

To begin offering or update your discounts, follow these steps:

  • From the owner dashboard, select Calendar in the main navigation
  • Select Settings and Base rates and discounts
  • Fill out or update the relevant fields for the type of discount you’re offering (weekly or monthly) and then Save

 

We know a lot goes into determining the fees you choose to charge for your property. But if you think your fees may be affecting your bookings, it’s a great idea to try other techniques like lowering or removing fees or offering an appealing discount as a booking incentive.

 

Update fees & discounts

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Log in to the Vrbo owner dashboard to update your fees and discounts and establish a traveler-friendly pricing strategy today.
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Becca Glenn, Director of Partner Success Platform Teams, Expedia Group

Becca Glenn

Director, Partner Success Platform Teams

 

Becca Glenn leads the Partner Success team for Expedia Group’s vacation rental lodging segment. Her team is responsible for consulting vacation rental partners, from individual owners to large professional property management companies, on strategies to maximize exposure on Expedia Group’s platforms, most notably the signature vacation rental brand Vrbo. Prior to this role she held various leadership positions on Expedia’s hotel lodging teams, including Market Management, acquisitions, and the Egencia corporate travel supply team.

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