** How to determine the price for 1 month? (medium duration pricing) **
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Hello and welcome to the J'poster Complet channel, the channel which helps professional sub-renters, seasonal rental companies, and seasonal rental concierge services to increase their turnover. Today, we are going to talk about pricing for durations that can be described as average, that is to say beyond the traditional two or three nights. How do you determine your price when you have a request to stay for seven nights? When we have a request to stay for fourteen nights? Or when a request to stay for a month? This is a request that was made to me at the bottom of different Lives. I think we were talking about it yesterday. Delphine made the request to me some time ago, Marie-Jo made the request yesterday. So, there you have it, I couldn't avoid this subject, and I'm making a video as agreed, today, on this subject, to help you.
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I'll start with different ideas. I should have put it on my screen. I usually do it. I don't know why I didn't do it today. So, I'm going to share some keys with you. I have four, in total, to share with you to help you determine the right pricing for the medium term. And besides, I didn't specify it, but if you are with me — I see that there are already more than ten of us — don't hesitate to say hello when you arrive. It's always a pleasure. Ask me your questions about what I'm sharing, and then at the end, we can also ask questions on other topics if you have any, if you have any concerns, or ideas for other videos . So, don't hesitate to participate and come forward.
The four keys that I am going to share with you on getting the prices right for longer lengths of stay can help you in a context where you want to set up medium-term stays. What does that mean when we want to implement medium duration? We say to ourselves: “Today, I made my prices for rather short durations, the usual durations that we can have of one day, two days, three days. » In some cities, the usual duration, especially in summer, for example in very busy periods, can even be seven nights or fourteen nights. In any case, we made prices for the classic activity, the standard activity. Now, we may also want to open up to other types of marketing, particularly medium-term marketing which will address different needs. The medium term is people who look for longer stays on sales sites like Booking and Airbnb: stays of one month, two months. These are people who will need housing for different reasons, because for example their apartment is not available for a month or two because they are doing work, they are obliged to find housing. elsewhere ; someone who changes cities, who at the beginning, before finding something to settle in, needs to be housed for a month or two... full of diverse and varied needs, but which push people to need to house. And during the recent confinements that we had, there were also people who had to be confined elsewhere than at home, because they have an apartment that is too small, no access to the sea, no access to a garden, etc. You may want to cater to this part of the marketing, people looking for longer stays. And you may also have a second need, and with everything I'm going to share with you, that makes sense too. This is for haddock requests from people who write to you saying: “I need to be housed for a little longer. What price will you offer me for this period? »
In both cases, key number one, it's important to make sure that you're going to price, you're going to accept a price reduction over a period of time that needs it. Why am I telling you this? In fact, implementing a medium-term strategy, or agreeing to give a price to a customer who wants to come for a week, two weeks, three weeks, it only makes sense, in reality, if you are- not even sure that we would fully fill our property at that time at the displayed price. I'll give you the example of the extremely strong period. We can give a classic case, the case of the house by the sea. In the middle of August, we are certain that we will fill it, and we will fill it at the displayed price, and even we might even be able to a little increase prices at some point. So, in the month of August, a very busy period for a house by the sea, it makes no sense, in fact, to accept a reduced price for a long term. To that, people could say to me: “Yes, but still, they stay three weeks, a month. Me, if I were them, I would expect to get a prize. » Well yes, but if we position ourselves like that, from the customers' point of view, we lose sight of optimizing the filling of our activity. What should we hold on to? We have to hold on to the fact that we are capable, in fact, of selling at the normal price in August. If we don't sell to this customer who wants to stay for a month, we will sell. Even if we sell week by week, we will finish 100%, and at the displayed price. So if we place ourselves in your own interest, that is to say in the interest of the host, your interest is not at all to accept a price. Your interest, in fact, is a little counterintuitive, it may even be to refuse this reservation request. Obviously, I don't recommend refusing the reservation, but in any case, say: “I can't give you a price. » And it's likely that the person won't confirm, but that doesn't matter, because we know why we did it. Because we know that we are going to make sales at the displayed price anyway, we have no interest in making a reduction. So, first thing if you want to implement a strategy of reduced rates for long stays, it is imperative that it is during periods that need it, and not peak periods or very high demands. These must be periods of low demand, or even periods of average demand. That's the first thing.
The second thing, you need to adapt your competition study. When you are going to determine your price, you must ensure, obviously, that your price is consistent in the market in relation to the competitive position that you currently have. I'll give you a concrete example. If for short stays, usually, you are rather at the top of the market range, you are rather at the top of the basket, we will say, apartment advertisements, and therefore prices, in this case, you need to make sure that this is also the case over the medium term. How to carry out this competition study, and how to understand the market prices available for this type of service? Well you have to do the research yourself. You can absolutely do a search for seven days, fourteen days, or twenty-eight days on booking or on Airbnb. You can also go to specialized sites, like the morningcroissant site, and see what is available. Depending on the city, sometimes there is not necessarily an announcement, but in any case, if there is one in your city, you will be able to compare, and give yourself an idea, on average, of what We can currently find on the market the least qualitative goods, and the most qualitative goods, which will give you an idea of the market range for the medium term. Very important. So that's the second key: doing an appropriate competition study over the medium term to find out what the market is like at that time.
Third key: keep in mind a notion of floor price. Why do I say that? I say this especially if you are in a professional sublet situation. In these cases, you have charges. Moreover, this is also true in the case of seasonal rentals. You must ensure that with the prices that you are going to position yourself, with the price reductions that you are preparing to grant, we are not going to reach profitability thresholds below which, in fact, it no longer makes sense to market . So, make sure of that. Make sure that the post-reduction pricing amount that you are going to put into the systems is an amount with which you are still satisfied, with which you manage to cover the costs, and you still have a gain in the end. Why do I say that? Because it's true that the medium term is uncompromising, that is to say that if we are wrong about the price, it is not like the short term. The short duration, over the month of January, if we are wrong about the price, if we have a reservation for two nights, we can immediately correct it, and realize that we were wrong about the prices. We're changing, and for the rest of the month, it's not going to drastically affect the performance of the month of January either. If in January, you are doing a medium term and you grant a price for a month, when the reservation falls through, it is your month of January which is sold at once. There's no real going back. So, that's why you really need to make sure what the post-reduction amount this will give, are you able to afford this price, are you comfortable with this price. So. This is for the third key.
For the fourth key, I think I'm going to be asked the question, so I'm going to answer that anyway. I imagine the question I will be asked: “Élise, but what percentage do we put in? What are the amounts we put in? » This is extremely difficult to answer. Why is this extremely difficult to answer? Because everything depends on the initial amount, that is to say that we, at J'annonce Complet, we make reduction percentages for the medium duration which are not huge, which are not super important, but at the same time time, our basic pricing is already very refined, very adjusted. So if we started with at least 50%, that would give us prices which are sometimes, in certain contexts, much too low, or completely out of market. So, it makes no sense to sell off like that. So, depending on the price that you have at the base, in any case, we at J'poster Complet, we do not put reduction percentages which are particularly enormous, and I will give you the range that we usually place for you give an indication. Between seven nights and twenty-eight nights, it can generally range from -10 to -25%. But I don't have an absolute truth to give you, to say: "Be careful, for fourteen days, it must absolutely be divine truth -20%", because that would not make sense. Once again, as I said earlier, it depends on your cost profile, it depends on the market range that you have at home, it depends on the prices that you have at the base, in fact, on which we applies this percentage. So all this means that we will have the best price. When we consider all the elements; we will get the right price, but there is no divine truth with a percentage that would make sense. So.
So that's it for the four elements. I will summarize the four elements to help you correctly price your prices over the medium term. Ah, I missed all the “hellos”.
− Hello, Sylvia, welcome.
− Hello to you, welcome.
− Hello, hello.
− Hello Christine.
− Hello Romain. Welcome.
I don't particularly have any questions at the moment. Maybe it’s because it was super clear. I'll still do my little summary of what I shared with you if we have people who are only joining us now. So, the four points to help you determine your prices in the context of medium-term stays, so from seven to fourteen nights, the first point is to ensure, in fact, that already, you only make these prices over periods which require it, and that you are not going to degrade your pricing over periods for which you are calm about marketing, and you do not need to particularly boost filling. That's the first thing. The second thing, have in mind a market range for the medium term specifically. So, that would require doing a competition study over the medium term, testing on the site what the competition's prices are for seven days, fourteen days, twenty-eight days. This is not what will determine your price, but in any case, it will allow you to have the famous market range, and to be able to position yourself in the appropriate range, or to confirm that you have the right price, that you are not out of the market. The third thing is to keep in mind the price, in the end, that you will receive in your pocket after the reduction, after the commissions in order to ensure that with the load profile that you have, or if you are a professional sublet, that you are not going to pass thresholds below which, in fact, it is no longer interesting to market this entire month. And the fourth point is to make sure you have percentages that are still sufficiently interesting. This point, in fact, I am presenting it differently from my first presentation, but in any case, on the percentages to help you with this, we, at J'poster Complet, we are -10 at -25%. And overall, the message I wanted to send is that there is no absolute truth about this amount. It mainly depends on the market in which you operate. It also depends on the base price you position. Perhaps, one point that I can add at this stage, and I will end there, it is true that this percentage is not particularly high. As I told you, we go up to -25% at most. I know, from dealing with Airbnb, that some go up to -30%. In any case, in 2020, some went up to -30%, -40%, -50%. These are percentages which are extremely high, and which, in the end, I think, it is my conviction, but then, it depends on the cities, are not always necessary. We really need to make sure that we are going to provide a sufficiently attractive level of price reduction, but without going to completely sell off the price, especially not in an arbitrary way, by saying to ourselves: "I think it's less - 40”, and clack, -40%. This deserves a little more in-depth study. And above all, keep in mind not to sell out. If a traveler is interested in your apartment, he will see the price, he will not hesitate to write to you, because travelers are still aware that a stay of fourteen nights is a bit atypical, so they do not do not hesitate to write. So on that note, don't go too low just yet. Here are the four points that will help you.
I see I don't have any more questions at this point. I think it was probably very clear. So what I suggest to you is that if you think about things in the meantime, or if you watch this video in replay, well, don't hesitate to write a comment, or any questions you have, because I answer. As soon as I see the comments, I respond to them. Don't hesitate to tag me, by the way, if you want to be sure that I don't miss the question. I answer questions, and obviously, if you can think of other topics you'd like to have a video on; do not hesitate to mention them to me. As you can see, yesterday's video and today's video were topics that were asked of me. So, it's important to me to respond to topics that help you concretely, right away, and something hyper-operational to also share with you, and show that revenue management is something that is not that complicated. It’s something that can be put in place, and it will bear fruit right away. So. I wish you a very good day, and I'll see you tomorrow for the next live.