This is a question I hear frequently. Vacation home owners are always reviewing their past occupancy; thinking about improvements and most important of all, considering whether to raise their rates for the next year.
With the current economic climate, the rise in vacation rental properties coming onto the market, and changes in travel demographics, it's not the no-brainer decision it once was, and does require a significant amount of research and competitive evaluation.
Vacation rentals are being touted significantly in the press as being ‘value for money' and the choice for ‘staycations'. This means the market for holidays of this nature will continue to grow and become more popular creating new clients for your property. On the other side of the coin, there are many more second homes being advertised for rent as the owners strive to find ways to meet costs, or are unable to sell at a reasonable market price.
There has always been a good balance of supply and demand, tipping over into a strong seller's market in the high season but backing off to the renter's advantage in the longer out-of-season period. This situation is unlikely to change, particularly in our Ontario market place, however before moving to cash in on the potential for higher demand in 2009, I recommend a cautious approach and a good look at the competition before you make any big increase in rates.
If you are planning on an increase, take a look at what you are offering in the way of features or facilities. Have you upgraded anything? Are your planning on purchasing new appliances or adding something extra like a hot tub or a sauna? Make sure you justify any increase rather than raising the rate incrementally because another year has gone by. And, whatever you do, try to remain competitive and don't price yourself out of the market you are in.