Friday, January 28, 2011

Money and Sanibel Vacation Rentals: Five Reasons Your Offer Won't Work This April

In a much earlier blog post, I wrote about the difference between a seat on a plane and a vacation rental. The key factor is that a plane will fly with few people because it is a scheduled flight. A vacation rental can remain passive...and empty. There is no reason it must be rented or occupied.

With a rash of inquiries for April weeks, still high season on Sanibel Island because of the late Easter week, I find myself with the last 3 weeks still vacant. The obvious reason is that rental guests are seeking significant discounts, sometimes as much as 50% off the list price. As a rule, I do not discount at all until 3 weeks out of an arrival date, and then not usually deeply.

When I politely refuse these offers of 20 to 50 percent off my posted rate, many guests will ask why I won't take their offer. After all, wouldn't I rather have some money than no money?

I respond always and succinctly in most instances that I hope I will get my price since so many people are looking for those weeks. I also suggest that they should contact me in a couple of months if they have not found anything that they like better than my own properties.

But I don't usually have the time to give them the real reasons why I prefer not to rent for less than what I post as my rates. And here they are:

1. High season on Sanibel Island, when I and other owners make most of our money, only lasts 3 months at best. The rest of the year, shoulder or low season, the rate is significantly less and even half price. My opportunity to get my maximum rental is short lived.

2. Having people in a property always has a cost. Utilities, commissions, cleanings and the infrequent but still real damage that occurs are all deducted from the rent. It is the price of doing business, but a low ball rental offer is no incentive to take on the cost or the risk.

3. The rental property has a value. When the value is diminished with a very or even somewhat under market offer, I might do better swapping the property for a home exchange with another rental of equal or even greater value. A week in the Caribbean or the French country side is infinitely more appealing than the money being offered.

4. Because I don't even discount for repeat guests in almost all instances, I find it most discomfiting to discount for someone who has never been in the property. Additionally, I would not want a guest who paid full freight to know that another guest came in with a low ball offer. I would understand if my full paying guest did not appreciate the situation and I would prefer not to create it.

5. I work hard at keeping my properties inviting and up to date. I don't want to be perceived as a bargain basement owner and would not want anyone expecting next year what they got this year in the way of a discounted rate. So better not to even open up the door to possibility on that one.

By and large I love our guests and am particularly happy when they have a good time and tell me about it or celebrate a special event in our rentals. But this is a business and I endeavor to keep it a business. Accepting low ball offers this far in advance flies in the face of every business principle I know.

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