Following two questions on apartments with SPA, I am therefore making a dedicated video to share some keys on how to approach the rental price and the financial potential of this type of property.
💯Receive the free book by email (the 6 mistakes that make you lose money) by joining my private group on Facebook 💯 https://bit.ly/2KRS5WK
(don't forget to enter your email to receive the bonus)
⚠️ Subscribe to this channel and 🔔 click on the bell 🔔 to stop saying to yourself: “what was the channel that gave good ideas on prices? » https://bit.ly/2OLq0lx
Hello and welcome to this Live video in which we are going to talk about the concept of price when you want to make an apartment with a SPA. This is a subject on which I had two questions. So I said to myself: “Well listen, if it’s a subject that interests you, we’ll deal with it, there’s no problem, it’s very interesting. » So if you are considering having an apartment with a SPA area, whether sauna – jacuzzi or if, conversely, you already have this type of apartment and you say to yourself: “It’s not simple to price, it is not easy to put a rental price on this type of property. » Well, stay with me for this video, you will be interested. We're going to talk about exactly that: what are the keys that I recommend to you to do things well on this type of property, and what are the pitfalls to avoid so as not to make mistakes. If you don't want to miss any of the videos, in fact I forgot to specify it, but don't hesitate to subscribe to the Youtube channel with the little bell or to register on the I'm displaying Complete page...finally you register...Just click on “Like”.
- Good morning. Does that mean hello, “byte”? Ah, Simon, introduce yourself. Welcome, Simon.
Don't hesitate to subscribe, so you don't miss any of the daily videos that I post from Sunday to Thursday. What messages have I received on this subject of apartments with SPA? I received a first message from Claudine on Youtube in the comments saying: “Thank you Elise for your videos full of information…”
- Please.
“…I have a subject that interests me, it is LCDs with sauna and LCDs with jacuzzi, performance – maintenance – cost. Looking forward to listening to you. »
- Thank you Claudine for your question.
And then I also had, on Facebook, a question from Stéphane who said to me: “Hello Elise, how can you be sure of the accuracy of the study that you are going to carry out in terms of pricing policy (without surveying the people directly), especially when you want to offer a slightly new night-type product – SPA in an apartment? »
I will answer this question exactly. I think that in fact, we always have, in this kind of situation, when we have something atypical, and moreover this can be the case for a SPA, the notion of a pile of this apartment-SPA, but it could also be for something completely different. If you go to the Youtube channel, you will see a case study that I did, some time ago, with a person from the community who explained that she, in fact, has an escape game in her apartment , and it was a bit of a similar situation, because obviously, when we have an escape game, it's a bit new, we have a game offered in the apartment: what do we do that ? How do we go about making the most attractive prices possible, and especially the prices that bring us the most turnover, without obviously, this is the pitfall that we all try to avoid, without having an amount that is completely prohibitive and which means that in fact, no one comes to stay in our apartment.
The first thing, the first pitfall, and I think, is the fatal error when you launch this type of project, so here I come back to the SPA subject, etc. The fatal mistake to avoid when launching this type of project is to think only with what it cost us. Because obviously, when you put a sauna, a jacuzzi in an apartment, it's extremely expensive, obviously. So we may be tempted, right away, to say to ourselves: “How much did it cost me? I divide it over one year, two years, I distribute it by number of months, and therefore, I will increase my price. » There are two risks in this. The first is that you come across an amount which, because you negotiated your work extremely well,…
- Hi Axel, welcome! Welcome to Live.
...Because you negotiated your work extremely well, you end up with an amount that ultimately represents little money, month by month, or because you made relatively long cost spreading assumptions. In these cases, the risk you have is that you are in fact placing a price that is below what you could claim. So a shame, because that means you're missing out on turnover every month. And then there is the other scenario: if ever for x or y reason the work was extremely expensive, you find yourself having an amount which is a bit heavy, in fact, month by month, and which will be really too much. important. You will find yourself having difficulties, precisely, in filling this apartment, which you nevertheless want to be a flagship with this somewhat extraordinary thing, of having a sauna, jacuzzi, a SPA. In both cases, it's quite disappointing, so that means that there is still, in fact, an issue of finding the right price on this type of apartment, but, and that's the lesson from this first error: above all, do not base yourself on what it cost you, because that has no consistency on the market. It is exclusively based on your ability to do the work inexpensively, and it has no connection, in fact, with what this experience is worth on AIRBNB or on Booking.
Now that we've said that, it was the most important, but I'm still going to give you some ideas, more concrete ideas to know what you should look for? What should you look at to fuel this reflection? The first thing is to look for market value ideas around you. You will tell me: “Yeah, but Élise, in my city, there is no one who makes a SPA apartment. No one does this, so I'm on my own, what do I do with this? » There are two options, because overall, to be honest, this is very often the case. At J'poster Complet, we have this type of property, and as a result, there are two things that can be viewed. The first thing is to look at more high-end, more luxurious accommodation services in your city, so don't hesitate to look at them: how much is a four-star hotel worth? How much is a five star worth? To go and look at the apartments that are truly the most upscale in your city. Here, I'm talking about types of accommodation that can accommodate the same number of people as your apartment. If your apartment is a studio, we will look at hotel rooms for two. We're going to try to really do something comparable, looking at very high-end apartments, but just studio apartments. So that's the first thing that will give you a bit of an idea of the order of magnitude of value. Second thing you can do is to go and observe, in other cities which have this type of accommodation, apartments with SPA, to observe what are the differences in values which are achieved between these accommodations with SPA and more classic accommodation. The idea is not that you go: “they made +20 euros, so I’m going to make +20 euros. » Not at all, but to get an idea of the percentage of growth that can be applied, or that is applied in other cities for this type of scenario, this type of situation. Once you have these two elements, you already have a few things to give you an idea...in two or three other cities, in general, properties with SPA are more than 20%, for example, compared to properties without SPA; always at a good equivalent, it's important, and you can say to yourself: "I also see that in my city, to have a truly luxurious, high-end service, it's this kind of order of magnitude. » That gives you an idea of the context in which you will evolve with this product, this service which is truly atypical.
Now there is a second key that is really important in helping you determine pricing. It’s about really understanding the clientele and the needs that you are going to meet with your apartment with SPA. When we started, we said to ourselves: “This is really going to be the type of apartment that will be exclusively filled on weekends and during the holidays, and not at all otherwise. » This is something that is nevertheless confirmed. This type of accommodation is accommodation in which you go for moments that are more called “leisure” moments, that is to say with your husband and wife, with your partner. But more in personal life contexts, and not professional life. Although everyone does what they want at work, that doesn't concern me, but it is indeed accommodation that will work more during these periods. Now, this is not an absolute truth, certainly, these are not accommodations that are completely empty during the week. So try to understand, for you, when launching the activity, what works best. You can start a bit like we did, with a basic outline, by saying to yourself: “We still expect more requests during the week, on weekends, on vacation; more requests on weekends, holidays, in fact, not during the week, a little less in any case. » You can guide your pricing schedule with this idea in mind, saying that there will be more potential, so obviously more potential means what? Financial potential, in terms of higher prices, obviously. If you follow the Lives, this will seem obvious to you. So you can start with this idea, and then make sure that you have, as much as possible, a really detailed understanding of what your customers expect. I'll give you an example of this which may depend on the demand in your area: it's the famous Sunday evening. Is Sunday evening an evening on which you will really have demand from people who come for personal reasons, or will Sunday evening be a bit of a poor relation, because it doesn't can't help attracting people who are going to work the next morning. To dig into this part.
I will recap what I have already said. First mistake, not thinking with the work. This is the number 1 pitfall not to do. Instead, think about the financial potential that this experience represents on the Booking and AIRBNB sites: how much customers would be willing to pay, and not how much it cost me to do this thing. The second thing is by all means, and I gave you two, try to give yourself orders of magnitude of what it could be worth, precisely, on the market. The two examples that I gave are either referring to more luxurious services in your city, or looking at other cities if you have examples of SPA apartments and apartments without SPA to see the percentages of price increase which are usually applied for this type of service. That's not why we're going to duplicate it, but it gives us orders of magnitude in mind. Second key that I wanted to share with you, keep in mind that it is more of a “leisure” clientele. This is not firm and definitive, but overall, it is more likely that you will have many more requests during weekends and school holidays than during weekdays. That doesn't mean you'll be empty during the week. We don't. We are sold out almost all the time for this type of property, but there is still a little more potential during the week and at the weekend...I've made the mistake twice now, at the weekend and on vacation. Obviously, it's to check if you're following with me.
- Patrice, thanks for the tag! Ah, it's someone who tagged you, okay ok. I just realized you were tagged. Welcome both.
I continue. The third key, which is really important and we have used it without any complexes, is the key to “Test and Learn”. Why the “Test ans Learn” key? Because this type of product, which has no reference on the market, gives you a major advantage, which is that there is no reference on the market. So what do I mean by that? When you are in a monopoly situation, in the end, you have enormous freedom over your prices. So we, what we've done, what I recommend you do, is start with a pricing structure that makes sense to you, a pricing structure that keeps in mind key number one and key number two, very important, but don't close yourself off, don't refrain from testing higher prices, and see when customers lose interest in your service. In fact, it is the customer who is the decision maker. You can do tests. Obviously, do it over small periods, to see what it gives: I'm not telling you to spread + 30% price growth over the whole year, not at all, but try on a score of two weeks, for example, a little higher price and see if you have difficulty filling. In fact, you see up to which price level, as I said, customers are willing to stay with you. That's really the key, one of the most important keys in this type of situation, because we are in a monopoly or quasi-monopoly situation, because even if there is you and a colleague who do this type of service in your city, we are still close to a monopoly, because see compared to the number of apartments for seasonal rental elsewhere, this is what we can call scarcity despite everything. Even if at worst, there are three of us doing it in a medium-sized or even large city, it remains anecdotal.
The last key that I wanted to share with you is the fourth key, because in fact in what Claudine said, she was talking in particular about performance. So, there is an important point. It is true that these structures are expensive, especially for the jacuzzi part, it is expensive in water. In these cases, when you have something that is expensive each time, it represents a lot. You have two solutions: either the impact is in the cleaning costs, or, another solution which is possible, is to also work on the required minimum stay durations. I'm not telling you that you have to spend 3 nights minimum on this type of property everywhere, because that won't work. It's still rarely the kind of property where we have long stays; it's more a romantic evening, typically, than a week's vacation for two. We are more about the romantic getaway or the romantic evening. So it's mechanically shorter lengths of stay, but rather than having "one night" constantly, it can be interesting to require testing, we return to "Test and Learn", at least two nights minimum . See what that means for you, and if it potentially allows you to improve the yield and profitability of this type of investment. That's the mistake not to make and the four keys that I wanted to share with you about this type of property.
I see I have some questions:
- “In the case where there is no similar offer in the city, what way do you go about it? »
That's what I just explained, I think, but you joined us along the way. This is what I explained at the very beginning of the Live, so don't hesitate to watch the video again, it will be available on Youtube and on the Facebook page too, obviously. I was just sharing how to ensure that you have references, even if you are alone. I start from the postulate that in any case, we are always on our own, almost always. What it takes, in reality, but I prefer to start from the worst case scenario rather than an optimistic scenario to give you the marbles in the event of major adversity.
Outdoor SPA or indoor SPA, it's relatively similar, except the fact, it's a bit like swimming pools, except the fact that depending on the latitudes where you are, I don't know where you're from. write, but knowing you are in the West Indies, overall, it is certain that we will be better able to use it all year round. If you are in mainland France, there is clearly a whole part of the year when we cannot use our SPA indoors. I made up a question that doesn't exist. It said interior SPA, and I went for exterior SPA. Well, I'll still finish with my outdoor SPA story. If you ask yourself the question while watching this video: outdoor SPA, the logic is the same, however, the only thing that must be considered, as I said, is like a swimming pool, if you are in latitudes where there is a whole part of the year during which you cannot benefit from this SPA; Besides, incidentally, it's a bit like having a terrace. When we are at a certain time of year, we know very well that the traveler will not be able to benefit from a terrace or a SPA, because the climatic conditions are not good, the price increase that 'we usually apply does not make sense, so it is absolutely necessary to consider this in its prices and "lower" to properties which do not have this swimming pool, this SPA or this terrace, to be able, in periods of low demand, to be competitive with our competitors. Now I answer the real question which was:
- “Was I talking about indoor SPA? »
Yes, it's true that I was more interior SPA oriented in this video. “I have an in-ground spa with a terrace, but outside. I was thinking of putting it in winter/fall storage.” Yes, that ties in with what I just shared on that, so look, we're pretty aligned.
- “What pricing strategy do you recommend for a SPA with Sauna/Jacuzzi exclusively sold as an upsell? (SPA privatized but not exclusive to a single apartment). »
So that's more of a subject, therefore, of everything linked to additional services: how to set prices for additional services? It's a good idea for a video, I'm going to take note of your question, and I'm going to make a video on how to price everything related to additional services. There, it is more, in fact, about the additional service than the apartment with SPA. So I'm keeping your idea, thank you, and I'm going to make a video of it.
- “La Rochelle”
So, for La Rochelle, it’s exactly that. That is to say that in La Rochelle, in the middle of January, it's a little cold. I don't know what you think, but I don't know if I'll have the courage to go to a hot tub in the middle of January.
So we come back to the price recommendation that I am going to share here, there you go.
- “Great, thank you”
I thank you.
Great, thank you for your questions, it's always great for me to answer your questions live, I love it. So I hope you liked this Live, that it interested you. If you need me to do a Live on a subject that is thorny for you at the moment, a subject that poses a problem for you, on which you would like to have my opinion, it is with great pleasure. Continue to comment on topics that interest you: I will make videos of that. What I didn't specify is that you can also, by subscribing to our private group, receive the bonus of the six mistakes not to make when making your prices. Discover the article on » »! The link is just below, I would really like to see you there. I tell you from now until tomorrow and take care of yourself.