Short-term rental hosting is a constantly changing business, where pricing structures can make or break your success. One pricing model that often raises questions is the “per accommodation per stay” model. This article dives deep into what it is, how it works, and why it can significantly impact your business strategy as a host.
Let’s break it down and explore how this pricing model could align with your operational goals while elevating guest satisfaction and overall profitability.
Understanding the “Per Accommodation Per Stay” Model
The “per accommodation per stay” pricing structure charges guests a fixed rate per stay, regardless of the number of nights booked. Unlike nightly rates, which fluctuate based on the duration of a guest’s stay, this model simplifies pricing by focusing on the stay itself.
This pricing method is commonly used to account for fixed operational costs that remain consistent whether someone stays one night or a week. These costs can include:
– Cleaning fees
– Utilities
– Security or technology services (like smart locks or guest screening tools)
While traditional nightly pricing works for many, the “per accommodation per stay” model appeals to specific property types or guest demographics. Think luxury properties, remote getaways, or locations that cater to events or weekend trips.
Why Hosts Adopt This Model
Simplifying Pricing for Specific Audiences
Guests often value simplicity when booking. With a clear, upfront rate for the entire stay, there’s less math involved, which can boost conversion rates, especially for properties targeting families or group travelers.
For instance, a cabin rental aimed at weekend retreats might benefit from this model. Guests planning a two-night escape often don’t want to compare complicated nightly breakdowns or decipher cleaning fees buried in the fine print.
Offsetting Fixed Costs
Every booking incurs a base level of expenses that don’t change with the length of the stay. Cleaning services are a prime example; the cost of cleaning remains the same whether someone stays one night or five. With “per accommodation per stay,” these costs are baked into the rate, helping hosts maintain profitability even for shorter stays.
Encouraging Longer Stays
This model can discourage one-night stays, which often bring a higher workload and fewer returns. By setting a flat rate for the stay, hosts may attract guests who are willing to book for multiple nights to maximize the value of their payment.
Pros and Cons of the “Per Accommodation Per Stay” Model
Every pricing structure has its strengths and weaknesses. Knowing these will help you decide whether this model suits your property and target market.
Advantages
Predictable Revenue
Fixed pricing reduces the unpredictability of fluctuating nightly rates. This is especially useful for hosts who rely on consistent cash flow to cover monthly expenses.
Streamlined Guest Expectations
Flat pricing avoids confusion. Guests see one rate and know exactly what they’re paying, which can reduce back-and-forth inquiries.
Ease of Management
If you manage multiple properties, this approach can simplify bookkeeping and forecasting.
Fits Certain Property Niches
Vacation homes, event-focused rentals, and unique properties (like yurts or treehouses) often thrive with this model, as guests expect a packaged deal rather than nightly flexibility.
Drawbacks
Risk of Underpricing Long Stays
If your rate is set too low, you may miss out on additional revenue from longer bookings.
Deterring Shorter Stays
Guests seeking one-night accommodations may find the pricing unappealing, limiting your reach in markets where short-term bookings are common.
Market Misalignment
This model isn’t a fit for properties in highly competitive urban markets, where nightly pricing flexibility is a key strategy for standing out.
Implementing This Model Successfully
If you’re considering this pricing approach, it’s essential to fine-tune your strategy to ensure it meets your financial and operational goals.
Know Your Costs Inside Out
Before setting a flat rate, analyze all your fixed costs per booking, including cleaning, utilities, and maintenance. Use this data to determine a baseline rate that guarantees profitability for even the shortest stays.
Study Your Guest Demographics
Understand who’s booking your property. Are they families looking for weekend getaways? Business travelers? Couples? Tailor your pricing to match their needs and booking habits.
Highlight the Value
In your property listing, clearly communicate what the flat rate includes. Mention cleaning, amenities, and any extras (like complimentary breakfasts or parking). Guests are more likely to accept a higher rate when they see it as part of a complete package.
Experiment with Rates
Don’t lock yourself into a single rate too quickly. Test different price points to gauge guest responses and identify the sweet spot that maximizes occupancy and revenue.
Leverage Technology
Pricing tools and smart systems can help you track booking trends, guest preferences, and competitor strategies. Platforms like Autohost can also help ensure that your guests are a good fit, reducing the risk of damage or rule-breaking during their stay.
Where This Model Fits Best
This pricing strategy isn’t a one-size-fits-all solution, but it thrives in specific scenarios. Here’s where it works best:
Remote or Niche Destinations
Properties in rural areas, mountains, or near beaches often cater to guests seeking a complete experience. A flat rate aligns well with these expectations.
Event-Driven Markets
If your property is located near event venues, like sports arenas or wedding destinations, this model simplifies the booking process for guests planning short, focused stays.
Unique or High-End Properties
Guests booking luxury accommodations or quirky stays (think treehouses, domes, or converted barns) are less price-sensitive and more drawn to the overall experience.
Pitfalls to Watch For
Overestimating Demand
Don’t assume that guests will automatically embrace this model. Conduct market research to ensure it aligns with what travelers expect in your area.
Neglecting Flexibility
While flat rates work for some, they might alienate guests during off-peak seasons. Consider offering discounts or special promotions during slower months to maintain interest.
Failure to Communicate Value
A flat rate can seem expensive without clear justification. Use your listing description to emphasize what guests are paying for and why it’s worth it.
Enhancing the Guest Experience
Adopting this model isn’t just about tweaking numbers—it’s about enhancing the guest experience while ensuring profitability. Here are a few ways to add value:
Offer Personalized Perks:
Include welcome gifts or local guides tailored to your guest demographic.
Streamline the Check-In Process:
Invest in tools like smart locks or contactless check-in to make arrivals seamless.
Be Transparent About Costs:
Let guests know that the flat rate simplifies their booking and avoids surprise fees.
These touches create a positive impression and increase the likelihood of repeat bookings.
The “per accommodation per stay” model offers a unique way for short-term rental hosts to simplify pricing, attract specific audiences, and manage operational costs effectively. However, success with this approach requires a thoughtful balance of market research, cost analysis, and guest communication.
By experimenting with this pricing model and leveraging tools to streamline operations, hosts can position themselves to thrive in competitive markets while delivering exceptional guest experiences.