How Can You Offer Discounts Without Undervaluing Your Vacation Rental

Offering discounts is a common strategy to attract guests and increase bookings, especially during low-demand periods. However, offering discounts without proper strategy can lead to undervaluing your vacation rental, making it harder to justify higher rates during peak seasons. Discounts should be used carefully to ensure you maintain your property’s perceived value while still remaining competitive in the market.

In this blog, we’ll explore how to offer discounts effectively to drive bookings, enhance guest satisfaction, and increase occupancy rates—all without undermining the value of your vacation rental. By striking the right balance, you can create enticing offers that appeal to potential guests without damaging your rental’s long-term profitability.

Understand the Right Time to Offer Discounts

Timing is everything when it comes to offering discounts. Offering discounts during the wrong periods or too frequently can lead to guests expecting lower prices, which can hurt your future revenue potential. It’s important to offer discounts at the right moments to increase bookings without setting a precedent for cheap rates.

When to Offer Discounts:

• During Low Demand Periods: If your property has availability during off-peak or low-demand seasons, offering a discount can help fill vacancies and keep your property occupied. For example, you might offer a discount during the winter months or shoulder seasons when travel demand tends to be lower.
  
• To Fill Gaps in Your Calendar: If you have small gaps between bookings during peak or off-peak times, offering a discount on these nights can help you secure additional revenue instead of leaving your property vacant. Dynamic pricing tools can help you identify when to reduce your rates to fill these gaps.
  
• For Long-Term Stays: Offering a discount for extended stays—whether for a week, two weeks, or more—can encourage guests to book longer stays at your property. This is particularly effective for remote workers, digital nomads, or families looking for a home away from home.
  
• To Reward Returning Guests: Providing discounts for loyal or repeat guests is an effective way to show appreciation without undervaluing your property. For example, you can offer a returning guest discount or loyalty program benefits for guests who have stayed with you before.
  

By offering discounts at the right time and under the right circumstances, you can drive bookings without devaluing your property or pricing it too low.

Use Tiered Discounts to Provide More Value

Instead of offering a blanket discount across the board, consider creating tiered discount systems that provide different levels of savings based on factors like the length of stay, booking timing, or the type of guest. This allows you to provide guests with more options while still maintaining your property’s value.

Examples of Tiered Discounts:

• Long-Stay Discounts: Offer a discount for guests who book a longer stay, such as 10% off for 7 nights, 15% off for 14 nights, and so on. This encourages longer stays, which often means more revenue per booking and reduced turnover costs.
  
• Early Booking Discounts: Provide discounts for guests who book months in advance. This benefits you by locking in bookings early and filling your calendar ahead of time. For example, offer a 10% discount for guests who book 3+ months in advance.
  
• Last-Minute Discounts: For properties with last-minute availability, you can offer a discount to fill the gap. You could offer a lower percentage discount for bookings made within a few days of the check-in date, incentivizing last-minute travelers to book.
  
• Special Event or Holiday Discounts: For special occasions like local festivals, holidays, or special events, offer a limited-time discount to guests who book during those dates. For example, offering a 5% discount for bookings during the off-season or holiday weekends can encourage people to book during these periods.
  

By offering tiered discounts, you can provide savings to your guests while ensuring that you’re getting more revenue from longer stays and advanced bookings.

Create Discount Packages that Add Value

Rather than simply reducing the nightly rate, consider creating discount packages that bundle your vacation rental with additional services or experiences. This adds value for your guests while still allowing you to maintain your rental’s perceived value.

Discount Package Ideas:

• Local Experience Packages: Offer a package that includes a discounted rate on local experiences such as guided tours, tickets to local attractions, or reservations at a popular restaurant. For example, “Stay 3 nights and get 10% off a guided wine tour” can help guests experience the best of your destination while increasing the perceived value of their stay.
  
• Extra Amenities or Services: Offer a discount on add-ons like a private chef, airport transfers, or concierge services. For instance, “Book a weeklong stay and receive a free airport transfer” can make your property more appealing without simply lowering the price.
  
• Seasonal Offers: Bundle off-season rates with special perks such as free parking, breakfast for two, or a complimentary activity to make the booking more attractive. For example, “Book a winter stay and get two free tickets to a local museum” can make the stay more attractive while adding value without deeply discounting your property’s price.
  

By offering discounts with added value, you can make your vacation rental more attractive without simply cutting the price. Guests will feel like they are getting more for their money, while you maintain your property’s value.

Offer Referral Discounts for Word-of-Mouth Marketing

A great way to incentivize past guests to refer friends or family to your vacation rental is by offering referral discounts. Word-of-mouth marketing is incredibly powerful, and offering guests a reward for sending you new bookings can drive more traffic to your listing.

How Referral Discounts Work:

• Referral Discounts for Past Guests: Offer a discount for guests who refer others to your property. For example, you could offer a $50 discount to a guest for every successful referral who books a stay. This encourages your existing guests to spread the word about your property, generating new leads and bookings.
  
• Offer a Discount to the Referrer and Referee: Another effective method is to offer a discount both to the guest who refers someone and to the new guest who books a stay. For example, “Refer a friend and get $100 off your next stay, and your friend gets 10% off their first booking.”
  

Referral discounts are an excellent way to leverage the power of word-of-mouth marketing while rewarding your loyal guests.

Promote Limited-Time Discounts for Urgency

Creating a sense of urgency can encourage guests to book your property quickly, particularly when you offer limited-time discounts. Limited-time discounts can help you fill your calendar during slower periods without permanently lowering your rates.

How to Create Urgency with Discounts:

• Flash Sales: Offer short-term flash sales where guests can book a stay within a specific time frame to receive a discount. For example, “Book within the next 48 hours and get 15% off your stay” can create urgency and encourage potential guests to act fast.
  
• Early Bird Discounts: Provide a discount to guests who book several months ahead. For example, “Get 20% off if you book by the end of the month for travel dates in the next 6 months” can incentivize travelers to lock in their plans early.
  

By using limited-time discounts, you encourage guests to book quickly, reducing vacancy rates during slower periods and boosting occupancy.

Monitor Your Pricing and Adjust as Needed

While offering discounts is an effective way to attract guests, it’s crucial to monitor your pricing strategy regularly to ensure that you’re not undervaluing your property. Keep an eye on competitor pricing, market trends, and occupancy rates to ensure that your pricing remains competitive while still maintaining the perceived value of your vacation rental.

How to Monitor Your Pricing:

• Use Dynamic Pricing Tools: Dynamic pricing tools can help you track competitor pricing, adjust for demand, and optimize your rates to stay competitive. These tools can also automatically lower or raise your rates depending on occupancy levels and market conditions.
  
• Track Your Discount Performance: Monitor how your discounts impact bookings. Are certain discount types (e.g., last-minute discounts or long-term stay promotions) leading to more bookings? Use this data to refine your discount strategy.
  
• Adjust Based on Seasonality: Ensure that your discounts are tailored to the season and demand. During peak seasons, you may want to reduce discounts, while during the off-season, you can offer more generous promotions to maintain occupancy.
  

By regularly monitoring and adjusting your pricing strategy, you ensure that discounts are an effective tool for driving bookings while still maintaining the value of your vacation rental.

Conclusion

Offering discounts is a great way to attract guests and fill your vacation rental during off-peak periods or slow seasons, but it’s important to do so strategically to avoid undervaluing your property. By offering tiered discounts, creating value-added packages, leveraging referrals, and using time-sensitive offers, you can incentivize bookings without compromising your property’s perceived worth.

When used correctly, discounts can drive bookings, increase guest loyalty, and encourage word-of-mouth marketing—ultimately contributing to the long-term success and profitability of your vacation rental business.

Ready to Start Offering Discounts Without Undervaluing Your Vacation Rental?
For more expert pricing strategies and tips on growing your vacation rental business, visit Vacation Property Expert Network today!