Should I give a discount?

The first rule of real estate is Do Not Lose Money!

If by granting the discount you are going to cause a negative Cash Flow situation for your month, then simply pass on the discount request and if needed the guest.

Under no circumstances are you obligated to give a discount when a guest requests it, especially if it means you will be losing money.

Now with that said, there are certain situations that you may want to give a discount but they will have certain consequences and results.

Generating reviews

The fastest way to generate reviews is to drive a TON of TRAFFIC and Guests to your property.

The quickest way to do this is by offering STEEP Discounts.

On a new property I will have HUGE discounts for the first 3 months. My goal is to break even these months.

What I'm purchasing with the discounts are social approval equity through the 5-star reviews.

When other future guests see a ton of 5-star reviews they are going to be more inclined to book, than a house that has no reviews.

Stimulate bookings

We've all been there... the dreaded off-season.

Like any travel business, your rental will take on a life of its own.

For me the peak season is typically April through August (Summer months) and then November and December (Thanksgiving and Christmas).

The other months, Jan, Feb, March, Sep and Oct are usually dead! RIP!

So typically I will adjust my prices in the off season by offering discounts to stimulate bookings.

Marketing tactic

In areas where STRs are super competitive a strategy that can be deployed is actually using discounts to attract guests.

In this situation what you could do is actually increase your list price, but then offer say a 40% discount (bringing it back to your usual rate).

People LOVE to save money, and businesses do this ALL the time.

Don't believe me? Walk into any store near you and you'll see a discount shelf.

Don't be fooled into thinking they're not making money on those discounts.

The benefit of this tactic is that your guest will immediately feel as if they've won!!

But be careful, you still have to over deliver on your promises, or else this guest will feel taken advantage of and leave a bad review.

If you want to learn more about pricing strategies and tactics then be sure to sign up for the FREE Launch Your First/Next Airbnb Challenge, and get a bunch more tips of the trade.

Too da loo

Linda