Tuesday, October 29, 2013
Tuesday, October 15, 2013
Let's brain storm here on the decision making behind the rental fee I mark on different websites. It just cannot be one-size-fit-all, because there are important differences to take into account between Cities Reference and PLW/PAYG(see below) websites.
I want to take into consideration the following facts about CR website and then compare:
- 1- The price I mark on Cities Reference is net in my pocket (the only possible exception is the Priority Owner discount).
- 2- Cities Reference does not ask for an advance payment to owners (unless your very self asks for a flat annual fee), Per Listing Websites (PLW) do.
- 3- Cities Reference does not take off percentages of my rental fee, typically 3% are levied from your fee at the moment of payment, but it can be more, by Pay As You Go Websites (PAYG).
- 4- Cities Reference deals with the traveler and contacts me only when the traveler has paid the advance, no direct bargaining with the traveler, contracts via fax machine and the like.
- 5- Cities Reference assists the traveler until my door steps and after.
- 6- Cities Reference pays me any money it has received from the traveler in case of cancelation.
- 7- Typically CR's clients pay directly to me on arrival, therefore avoiding the commissions and hassles of bank or electronic payments, so my booking is confirmed but I don't have to deal with bank wires and other methods of payment
Okay, that means that when I'm sitting down to mark my net weekly fee on Cities Reference, say 1,000 a week, I consider
- -point 2, that I was about to set the same net price I had for a listing site that has me pay, say, 500 euro in advance and on average books 5 week in a year. That means I should take off 100 before I list on CR.
- -point 3, that I typically list with websites that take 3% off my rental fee when they pay me. That means I should take off 30 before I list on CR.
- -point 4&5, how much is an hour of my work worth? Did I ever consider how many hours of work it takes me to answer emails and how many times direct bargaining takes me to discounts I had not planned for? Fair enough, say it has taken me 5 hours of work to reap those 5 bookings a year, say I value my time 100 an hour, it's a 500 value on a 5,000 turn over, 900% of ROI is nice, but isn't it better if I don't even have to work for it!!? So, that means I could put 100 more towards CR net and still be even, say 100 sounds too optimistic... That means I should take off another 50 before I list on CR.
- -point 6, typically if you don't take a 'flexible cancelation fee' on PAYG websites I get ranked to the last pages, while on PLW websites the down payment is all up to you and that is most times cumbersome. We deal with the advance and pay it to you in case of vacancy on cancelation. Both the other options have a cost. Did I get unpaid cancelations that resulted in vacancy last year? Did I do the math of what that costed to me? Say 1 week, with CR I would have gotten about 200 and instead I got nothing. Say I rent 20 weeks a year on average, that makes 10euro less on the average weekly. That means I should take off another 10 before I list on CR.
- -point 7, Paypal takes almost 4% of your payment, credit cards 2 to 5%, banks take fees, we can average that to 2%. That means I should take off another 20 before I list on CR.
Let's call the numbers:
When I list my apartment at
- 1,000 on PLW I will list at
- 940 on PAYG and at
- 820 on Cities Reference
That's fair! Contact us if you have questions or if you just want to talk about it you could comment right here ;)