Maximising holiday let profits during the summer season

Mat Faraday of Character Cottages explains how you can maximise income on your holiday let cottage during the summer months

"I hear that holiday cottages make most of their money in summer. How can I maximise my income this season?"

Cotswold holiday cottages can be a great investment all year round. However the demand and the rental rates are at their highest during the summer, reaching a peak during the school holidays. If you get your letting tactics right, you can make the summer season very profitable!

We have summarised our three top tips for you to consider for the 2018 summer season:

Be flexible with arrival and departure days

In the past, some holiday letting agents and owners thought that the best way to make money was to force guests to book fixed, week-only stays in summer, starting and ending on a specific day. Nowadays, telling potential guests when they have to start and end their holiday will severely reduce your potential holiday letting profits.

Guests want flexibility and they are willing to pay for it. Consequently, if you can offer arrival and departure days that match guests’ requirements, you will have much higher levels of demand. To turn this demand into super profits it is crucial to know how to price these flexible booking slots…

Use booking slot based pricing

Should you charge the same for a three-night booking from a Wednesday as a three-night booking from a Friday? The first booking cuts across both a mid-week and a weekend booking slot, whereas the second booking fits perfectly into a weekend booking slot, leaving the adjacent mid-week slots fully available. Consequently, while guests should be able to book either option, the price for the Wednesday start day should be higher, reflecting the fact that it significantly reduces the chances of selling the remainder of either booking slot.

With a properly designed pricing system, you can offer flexible arrival and departure days, safe in the knowledge that when bookings don’t align perfectly in the calendar, they have been priced to take this into account. In practice, understanding and applying booking slot based pricing is very complex, but it is essential to making your summer as successful as possible.

Get the best price, but don’t let your cottage go unsold!

Some owners and agents believe that variable pricing just means discounting and underselling cottages. The reality is that an effective variable pricing strategy is essential for maximising holiday letting profits.

There is no ‘right’ rate for a holiday cottage, as some guests will be willing to pay more for their perfect cottage than others. Consequently, if you think a booking slot might be worth around £900, why not try selling it for £1,000 initially? If it sells at this price, that’s £100 more profit, and if it hasn’t sold by a certain point, then why not try £950? The old fashioned view is that this is a discount, and must therefore be bad – in reality of course, the price is still £50 higher than you were aiming for!

Without a variable pricing strategy you will either be selling some booking slots too cheaply, which costs you money, or leaving lucrative booking slots unsold by trying to sell them for too much, which also costs you money. This is particularly important during summer, as rates are at their highest and the room for flexibility is greatest. In the example above, even if the booking slot ended up selling for £800, this is still much better than your cottage going unsold.

At Character Cottages we are experts in marketing and pricing luxury Cotswold Cottages. If you have a stylish Cotswold property and you would like to know more about its holiday letting potential, please get in touch with us by emailing letmycottage@character-cottages.co.uk, or calling us on 020 8935 5375 during normal office hours.