How to calculate prices for your holiday home

June 2025

As a new holiday rental owner, one of your first considerations has to be price. How much will you charge guests to stay in your property? We offer some top tips to calculate the rental prices for your holiday home.

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How to work out your holiday apartment price

First things first, consider the various factors that affect your pricing model. You want to have a ballpark figure in mind to work from. Here are some things to take into account to get you started:

• Location, location, location. If you want to rent out a holiday home in the centre of a city or in a tourist hot spot, you can usually charge higher rates.
• Your property’s unique features. Swimming pools, hot tubs, barbecue areas, special views and large gardens can all help you charge a premium rate.
• Your target audience. If you’re aiming for the luxury market, you’ll want to raise rates accordingly. Prefer to target travellers on a budget? Then go for a lower price.

With these three factors in mind, you can start researching. Check out the prices set by other landlords with properties near you – remember, the more similar, the better.

Holiday apartment costs for landlords to consider

Now it’s time to think about how much it’ll actually cost you to keep your property going. After all, you want to ensure you have a profitable enterprise. Here are some common holiday apartment costs to think about:

• Taxes and fees. Depending on the region where your property is located, you may need to apply for a holiday rental licence. You will also have to pay taxes, which vary from place to place. Use a holiday apartment tax calculator to work out how much money you’ll need to set aside.
• Property maintenance. This includes buying and replacing furniture, decor and equipment. You may not have to worry about replacing a sofa or a bed very often, but utensils, mugs and glasses don’t always last very long.
• Cleaning fees. Holiday apartment cleaning costs can quickly add up. Keep in mind that you’ll need to clean your holiday home completely after each guest. You could do this yourself to save money, but many landlords prefer to hire a professional. Check their fees, as you’ll need to think about your end-of-stay clean cost calculation for a holiday apartment and add it to your price.
• Mortgage, insurance and utility bills. Firstly, don’t forget to consider the costs of your rental insurance! Electricity bills for holiday rentals can also be expensive. Guests may want the air conditioner or heater on all the time, and you’ll need to run at least one load of laundry to clean the bedding after each guest.
• Advertising and listing on holiday rental portals. Some holiday rental websites take a commission from each booking, while others charge you an annual fee.
• Occupancy rates. You’re not going to have guests 365 nights a year, so you’ll need to charge enough to cover those empty periods.
• Wages. As well as cleaners, you may need to pay a gardener, a letting agent or a manager. You should also consider your own time —would you really work for free?

Common mistakes in holiday home rental calculation

When you’re first starting out, it can be very difficult to know what to charge for your holiday apartment prices. You may be tempted to dramatically undercut your competitors to get those all-important first guests through the door. However, this is a bad strategy. When guests see that your property is available for a much lower price than others in the area, they may consider it a red flag. Does it mean something is wrong with the property? Is your advertisement honest? Many guests will smell a rat and look elsewhere.

What’s more, the guests who actually come to your low-priced property might be undesirable. To succeed in the long term, you want high-quality guests —the kind of people who may be put off by extremely low prices.

Another common mistake that new holiday rental landlords make is accidentally charging too little simply because they haven’t taken everything into account. You might want to set up a spreadsheet and do your holiday apartment price calculation in Excel. Keep it dynamic, and be prepared to make quick changes if your sums are wrong and you’ve overlooked something vital.

Is setting high holiday apartment prices a good idea?

It sounds counterintuitive, but you may want to start by setting higher rates. Of course, as mentioned above, this will depend on your target audience. If you’re looking to attract travellers on a budget, then going too high is a mistake. However, many landlords find that setting high prices works in their favour. High prices attract more discerning guests —the kind of people who will treat your property with respect and follow the guidelines laid out in your book.

Setting high prices also allows you to create deals, discounts and special offers. There’s an interesting psychological trick here. If you set a low price initially, guests may be put off. However, setting a high price and offering a discount means that they feel like they’re getting a bargain, so they’re more likely to book.

Of course, if you want to set high prices, make sure that you advertise your holiday home appropriately. Your advertisement should accurately show the value of your property, and the reasons why it commands its higher price tag. Nobody wants to rent an overpriced holiday apartment.

Using dynamic pricing and offers in your holiday home

Many holiday home owners like to use a dynamic pricing strategy, which means charging different amounts to optimise profits. There are several tools that will help do the calculations for you, but in general, a dynamic strategy looks at the following:

• Your optimal occupancy rate. Do you want to rent out for only a couple of weeks per month?
• Guest arrival dates. Prices may be lower for midweek guests rather than those who arrive on Friday night.
• Seasonality. Prices are usually higher in peak season and lower at other times of year.
• Special events. If there’s a big concert or sporting event in the area, for example, you may be able to raise prices temporarily.

You might also want to introduce special offers. For example, many holiday apartment owners like to give a discount to guests who are staying for a long time. This can make a lot of sense. Imagine you have a guest who wants to stay for two weeks; you’ll need to clean the property once at the end of the stay. Conversely, if you have five guests staying for shorter periods, which add up to two weeks in total, you’ll need to clean the property five times. Giving the long-stay guest a discount won’t hurt your bottom line and can help build loyalty.

Remember, your pricing should never be set in stone. Leave yourself some room to manoeuvre, and don’t panic if you don’t get it right the first time. You can always adapt with experience.

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