Are you leaving money on the table with holiday bookings? If you’ve reinstated your ‘high-season’ rates and left it at that, the answer is probably yes.
When it comes to setting prices for the busiest season of the year, there’s a lot to consider. Even if you have good understanding of the nuances that go into setting competitive rates and the demand for holiday accommodations in your area, it’s easy to miss the mark.
If you price too low, you lose out on rental income. If you price too high, travelers look elsewhere.
Hit the sweet spot, and you will be handsomely rewarded with a calendar booked at higher-than-average nightly rates to boost your rental income for the year.
But the tricky part is finding out where that sweet spot is.
So we dug deep into our data on over 5,000 vacation rentals, which span every major market in the United States and vary in size and pricing structure, to help you determine if you’re maximizing your rental income or missing opportunities.
How Your Pricing Changes by Area
Every year, like clockwork, prices climb as the holidays draw near. While millions of travelers scramble to secure transportation and accommodation for their annual vacations, car rental rates increase, hotel room prices climb, and gas prices go up.
Vacation rentals are no different.
Here’s how rates fluctuate across the United States throughout the holiday season:
- 35% higher for Thanksgiving
- 56% higher for the winter holidays (Christmas and New Year’s Eve)
- 20% higher for President’s Day weekend
These are the average price hikes that we see for these holidays, but, the degree to which your rates will change depends on where you live and how strong the demand is for accommodations in the area.
Let’s dig a little deeper into the data to get some more specific recommendations:
This graph shows how prices rise and fall throughout the holidays in a few of the locations that are typically prime vacation destinations. It paints a pretty clear picture that holiday pricing isn’t a one-size-fits-all solution.
This data should give you an idea of just how high prices climb in some areas over these specific booking windows, while others remain relatively unchanged. Let’s take a closer look at how holiday rates change compared with prevailing fall rates for these popular vacation destinations.
Colorado Ski Destination Vacation Rental Rates:
- 50% higher for Thanksgiving
- 250% higher for winter holidays (Christmas & New Year’s Eve)
- 200% higher for President’s Day weekend
These figures aren’t surprising. Ski areas have traditionally been popular destinations for winter getaways, and the holidays fall within ski season when families like to hit the slopes.
Homeowners who put thought into how they are marketing, pricing and preparing their properties for these holidays have huge potential to increase their income by securing bookings over peak periods!
Lake Tahoe Vacation Rental Rates:
- 40% higher for Thanksgiving
- 195% higher for winter holidays (Christmas and New Year’s Eve)
- 155% higher for President’s Day weekend
The trend is similar in Lake Tahoe. Rates jump as travelers head to the mountains for holiday ski vacations – albeit to a lesser degree than the peaks we see for rentals in Colorado.
Hawaii Vacation Rental Rates:
- 20% higher for Thanksgiving
- 20% higher for winter holidays (Christmas and New Year’s Eve)
- 3% lower for President’s Day weekend
Things are a little different over in Hawaii. Despite being a top winter getaway for families, we don’t see the same surges that affect rentals near ski resorts. On average, nightly rates only increase about 20 percent throughout the holiday season.
Florida Vacation Rental Rates:
- 25% higher for Thanksgiving
- 45% higher for winter holidays (Christmas and New Year’s Eve)
- 15% higher for President’s Day weekend
Florida’s holiday peaks are higher than Hawaii’s, but still lower than ski resort areas. Rates rise 50% for the winter holidays, and increase 25% for Thanksgiving as travelers plan warm-weather getaways to the beach or Disney World.
How Your Pricing Changes By Property Size
Size and property type are two factors that have a huge impact on how much your nightly rates will increase over the holidays.
Ski-in/ski-out houses that can accommodate large groups book up faster than one-bedroom condos in resort towns, for example. Whereas in coastal areas, a beachfront condo with two bedrooms might be the hotter commodity over a 5-bedroom home farther inland.
We took a look at the numbers to see how the size and type of property affect bookings and pricing strategies:
Frankly, the data was a little surprising. We expected to see that houses booked faster than condos, but instead we saw that condos and houses are booked at almost the same rate.
For both types of properties, 30% of bookings are made within 1 month of the stay and over half of all bookings are made at some point during the 2 months leading up to the stay.
Less than half of reservations are made more than 2 months in advance of a stay.
If you’re the type of owner who prefers to know sooner rather than later if you’ll have guests at your home, consider pricing towards the middle of the market to increase your chances of securing a booking sooner.
If you don’t mind waiting longer to get a booking, then you can price higher – especially knowing that a full 30% of bookings are made last-minute and those travelers might be willing to pay a higher price to secure a rental in their preferred destination.
While there’s not a big difference between a house and a condo in terms of booking rate, we do see a wider split in bookings made based on the size of the home. For instance:
- 4-bedroom properties book better in the 2 to 6 months before a stay
- 2-bedroom properties book better in the 2 months leading up to a stay
What does this mean for your pricing strategy?
If you have a vacation home with more bedrooms, you might set your rates higher early in the season, knowing that properties like yours tend to book up first. And if you don’t get a booking during that early-bird period, it’s smart to drop your rates just before a holiday to get a last-minute reservation.
If you have a smaller property (2 bedrooms or fewer), the conservative approach is to price lower so you can get a reservation early in the season and guarantee a holiday booking. Or you can get more aggressive with your strategy by pricing higher with the knowledge that 62% of bookings come in during the last 2 months before the holiday, which may get you a higher-value, last-minute booking.
How your pricing changes over time
Timing is everything with pricing strategies! We wanted to get a sense for when travelers book their holiday accommodations to better understand how their behavior impacts vacation rental pricing:
It’s clear that few travelers make their travel plans a year in advance. The graph shows that most people are booking rentals as the holiday seasons gets closer. But on further inspection, we can see that each holiday has its own trend line.
- Thanksgiving bookings come in right before the holiday
Over 75% of Thanksgiving bookings are made within the 2 months leading up to the holiday, so you may not know whether or not you’ll have holiday guests until early November.
- Christmas bookings are made further in advance
About 56% of Christmas/NYE bookings are made more than 2 months in advance, so there’s a good balance between early-bird and last-minute bookings.
- President’s Day bookings are made on a fairly steady basis
About 70% of rentals in the 3 months leading up to the holiday weekend, and about half come in during the last 2 months. That means you should be seeing President’s Day bookings start in late November and continue through December.
We also analyzed the booking windows for each destination to get a better idea of when guests book holiday accommodations.
Lake Tahoe Vacation Rentals:
Lake Tahoe gets a high proportion of last-minute bookings that might keep prices down earlier in the season, and drive them up as those prime dates loom closer.
- 12% of bookings are made 120 days before a holiday
- 47% of bookings are made within 30-90 days before a holiday
- 24% of bookings are made within 30 days of a holiday
Colorado Ski Destination Vacation Rentals:
Bookings for Colorado ski destinations are steadier than what we see in Tahoe, with travelers making over half of their reservations at least 60 days before the holiday.
- 28% of bookings are made more than 120 days before a holiday
- 38% of bookings are made within 30-90 days before a holiday
- 22% of bookings are made within 30 days of a holiday
Florida Vacation Rentals:
Florida vacation rentals see a pick-up in bookings during the month preceding the holiday – making it a great area for last-minute bookings!
- 22% of bookings are made more than 120 days before a holiday
- 29% of bookings are made within 30-90 days before a holiday
- 36% of bookings are made within 30 days of a holiday
Hawaii Vacation Rentals:
It’s not a shock that Hawaii has the lowest rate of last-minute bookings, considering most travelers have to take expensive long-distance flights to reach the islands and are likely to have planned their vacations in anticipation. But it is interesting to note that people are still booking properties just a few months in advance of the holidays.
- 26% of bookings are made more than 120 days before a holiday
- 41% of bookings are made within 30-90 days of a holiday
- 18% of bookings are made within 30 days of a holiday
So what does all of this mean for your vacation rental?
There’s no cut and dry way to use this information. It should be applied on a case-by-case basis and reflect what you know from your rental experience.
Because there’s a steady flow of holiday bookings – and there isn’t one window when all travelers are making holiday reservations – you should set your rates based on your risk tolerance.
If you like to roll the dice, price your rental towards the top, or above, what your competitors are charging. Your property could be one of the few that last-minute travelers book at a higher rate when inventory is low. Or, it might not book at all.
We know that that might seem scary, but plenty of homeowners don’t mind this outcome. If they set the rates to a price that they feel comfortable with and their home doesn’t book, then their vacation rental is open for their own family to use over the holidays.
If you want to play it safe, price toward the middle of your competitor’s range of rates. With this strategy, you can be confident that your rental will most likely be booked at some point – if not more than 30 days before the holiday.
What’s the best holiday pricing strategy for your vacation rental?
It’s a matter of looking at the trends, analyzing what travelers are willing to pay, and factoring in how much you want to make from your rental property.
It’s okay to feel slightly intimidated by the process – it’s a lot to think about!
But at the end of the day, being thoughtful and intentional about your pricing strategy is simply what’s required to manage a vacation rental that doesn’t just pay the bills, but actually puts money in your pocket.
Have questions about holiday pricing or want to add something to our list? Share your thoughts in the comments!
If you can’t take on the daunting task of weighing holiday pricing minutiae, you might want to partner with a vacation rental management service like Evolve. Our Revenue Management Team works to ensure that all of our properties are priced competitively with nightly rates that are optimized to take advantage of holiday demand.
Click here to learn more about how Evolve is transforming the industry with our fresh approach to vacation rental management.