{"id":7913,"date":"2020-07-02T08:22:59","date_gmt":"2020-07-02T08:22:59","guid":{"rendered":"https:\/\/myangelhost.com\/?p=7913"},"modified":"2025-01-23T01:38:02","modified_gmt":"2025-01-23T01:38:02","slug":"why-offering-weekly-and-monthly-discounts-boosts-bookings","status":"publish","type":"post","link":"https:\/\/myangelhost.com\/es\/why-offering-weekly-and-monthly-discounts-boosts-bookings\/","title":{"rendered":"Por qu\u00e9 ofrecer descuentos semanales y mensuales aumenta las reservas."},"content":{"rendered":"
It\u2019s odd to hear the word discount and increased revenues in the same sentence. Isn\u2019t it? Rental property owners likely hesitate about offering discounts, for fear of losing money. However, weekly and monthly discounts should be taken into account if you want to get the most out of your rental.
At Angel Host, we offer dynamic pricing. Meaning we adjust rates daily in order to maximize your rental revenues. We eat, sleep, and breathe calculations. (Really!) We also integrate powerful data analytics and advanced algorithms into this process. To us, \u201cdoing the math\u201d is just second nature. It\u2019s easier to understand when you see the numbers, as math is a universal language. And furthermore, when it translates to money and income, that\u2019s something everyone can understand!
As you will read, an important part of setting a good pricing strategy is determining weekly and monthly discounts. And we\u2019ll provide you with the mathematical proof that they work! <\/p>\n\n\n\n
What are these discounts? <\/h2>\n\n\n\n
Most booking platforms give you the ability to offer extended-stay discounted rates. This tactic encourages guests to book longer and helps incent the flexible traveler to stay longer if they can.
Let\u2019s use a real-life scenario in Orlando, Florida; a 4-bedroom home just south of Disney. This particular home is often occupied over the weekends from Thursday-to-Sunday, which means the place is often empty during the first half of the week.<\/p>\n\n\n\nBased on this information above, would offering a 20% weekly discount make sense?\u00a0<\/em><\/figcaption><\/figure>\n\n\n\n
Weekly Discount<\/strong><\/h2>\n\n\n\n
To answer this question, it depends on the average length of stay (LOS). If your Average Daily Rate (ADR) is $160 and you have mostly weekend rentals, then your average LOS is 3 days. This means you\u2019ll make close to $500 for every week your property\u2019s rented. (see chart below)<\/em><\/p>\n\n\n\n
Now, let\u2019s say you offer a 20% discount and charge only $128 per night on a weekly stay. Despite the drop in the daily rate, you\u2019ll earn close to $900 for the week. That\u2019s 86% more revenue!<\/em> Of course, there will be travelers who won\u2019t be able to stay an entire week and therefore can\u2019t use this incentive, but there\u2019s always a percentage of the market searching for longer stays. In order to have your property listed at the top of the search results to these users, it\u2019s very important to offer a weekly discount<\/strong>.<\/p>\n\n\n\n<\/figure>\n\n\n\n
Monthly Discount<\/strong><\/h2>\n\n\n\n
Using the same example, would offering a monthly discount make sense?<\/em> In the weekly discount scenario, it depended more on LOS. In this case, it will depend more on the expected occupancy rate. We know this property has an occupancy of 63% on average, which means renting 19 days out of the month and bringing in just over $3000 of monthly revenue. (see chart below)<\/p>\n\n\n\n
Now, let\u2019s say you offer the same 20% discount for the month. When you do the math, again, you\u2019ll see that you will earn more revenue at the incentivized discounted rate than you would otherwise. Sure, there will be a little more wear and tear and use of utilities but not as much as the $800 in extra revenue you will earn on this booking. <\/p>\n\n\n\n<\/figure>\n\n\n\n
The bottom line is, when the correct variables are taken into account, both weekly and monthly discounts are sure ways to increase your annual revenues.<\/strong><\/p>\n\n\n\n
How about discounts in times of crisis? <\/strong><\/h2>\n\n\n\n
A crisis often happens when you\u2019re least expecting it. The latest Coronavirus crisis is a great example. During this pandemic, there have been many canceled bookings, refunds, and empty calendars for those in the vacation rental business.<\/p>\n\n\n\n
So, does it make sense to offer discounts in a crisis?<\/em> Again, we say YES. In fact, more than ever during times like these. And here\u2019s why. Using that same property example and doing some market analysis for the coming month, we learned the expected occupancy rate would be about 16%, meaning only rented on average 5 days out of the month! If we don\u2019t reduce our rate at all, best-case scenario, we\u2019ll get $800 in revenue that month. <\/p>\n\n\n\n
However, if you offer a very aggressive monthly discount during this time, like 50% off, you\u2019ll earn 3x the expected revenue because you\u2019re renting for the entire month! This has proved to be a very successful strategy for our clients especially during one of the biggest crises our industry has suffered in years!<\/p>\n\n\n\n<\/figure>\n\n\n\n
Is there a magical formula to calculate weekly and monthly discounts?<\/strong><\/h2>\n\n\n\n
Yes again! Our revenue management team comes up with the right calculation by taking into consideration these elements:<\/p>\n\n\n\n
\n
Length of stay:\u00a0If all of your stays are usually 7 days, then it doesn\u2019t make sense to offer a weekly discount. If it\u2019s 3 days but you\u2019re usually booked mid-week then it won\u2019t make sense to offer a weekly discount here either.<\/strong><\/li>\n\n\n\n
Expected occupancy:<\/strong>\u00a0The lower your expected occupancy is in the month, the higher likelihood you should have a monthly discount and the higher the discount should be.<\/li>\n\n\n\n
Competition in the area:<\/strong>\u00a0Most property owners\/managers don\u2019t set up any discounts, therefore giving you an edge if you have them!<\/li>\n\n\n\n
Time of year:<\/strong>\u00a0You don\u2019t want to offer a weekly discount around Christmas and New Years. Nor do you want to offer any steep monthly discount during your high season.<\/li>\n<\/ul>\n\n\n\n<\/figure>\n\n\n\n
Offering weekly or monthly discounts has shown to be a great incentive for guests requiring a long-term accommodation option or to encourage guests to stay longer. But best of all,\u00a0it\u2019s a successful strategy to increase your rental revenues without much more effort!<\/strong><\/p>","protected":false},"excerpt":{"rendered":"
It\u2019s odd to hear the word discount and increased revenues in the same sentence. Isn\u2019t it? Rental property owners likely hesitate about offering discounts, for fear of losing money. However, weekly and monthly discounts should be taken into account if you want to get the most out of your rental. At Angel Host, we offer […]<\/p>","protected":false},"author":15,"featured_media":7914,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[1],"tags":[25],"class_list":["post-7913","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-property-management-tips"],"yoast_head":"\n
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