How to increase the daily rate of your vacation rental
June 2026
Want to make more money from your holiday rental? Yes, it’s possible, but you’ll have to do it the right way. If you just put up your prices without making any other changes, you’re unlikely to see great results. Here are some tried and tested strategies to increase your daily rate.
What is the average daily rate for holiday rentals?
The average daily rate is a KPI (key performance indicator) that many landlords consider vitally important. Effectively, the average daily rate represents the average revenue that an occupied holiday rental can earn in a day.
What is the average daily rate?
Now, you probably want to know how to calculate the average daily rate. The good news is that it’s incredibly simple, and it only gets slightly tricky if you rent out several holiday apartments. To calculate it, you need to divide the total revenue that you earn per holiday rental by the number of holiday rentals that are occupied.
Here’s one important thing: the average daily rate is always based on occupied rentals. If they’re empty, don’t count them. So, if you have three holiday apartments and two of them are currently occupied, you would calculate your average daily rate based on those two. Ignore the third completely as long as it remains empty.
How to increase the average daily rate of your holiday rental
Increasing your average daily rate should be one of every landlord’s goals. After all, it can be expensive to run a holiday rental business. A higher revenue means you can more easily absorb the costs involved in running your business. Here are some of the best average daily rate strategies to consider:
Optimise your pricing
The more time you spend in the holiday rental world, the more you realise that correctly pricing things is a true art. Of course, setting the right price is crucial if you want to increase your average daily rate. If your price is too high, guests will be put off and turn to other, more affordable properties listed on holiday rental portals. If it’s too low, you might get high occupancy —people are happy to rent a holiday home at a bargain price— but your average daily rate will be down.
A good way to improve your pricing strategy is by using dynamic pricing tools. There are many apps out there that will handle this for you. The most powerful software can take things like high and low seasons, day of the week, guest demand, and prices of competing properties into account. When you use these tools, your prices will fluctuate from day to day and season to season, and you should see a higher average daily rate.
Make a better guest experience
To raise your average daily rate, you’ll obviously need to raise your prices, but you can’t do that unless you can justify it.
One of the easiest ways to increase prices without damaging occupancy rates is to work on the guest experience. This doesn’t require a huge outlay, but it can quickly improve guest satisfaction, resulting in more bookings and the chance to raise your prices.
To improve guest experience, think about these:
- Communicate effectively, providing handy information. What do you want when you go on holiday? Send guests useful info about amenities, attractions and events nearby, and try to personalise your communications to make them feel special.
- Provide a welcome basket when guests check in. Don’t stock it with generic supermarket products, but look for local artisan snacks and treats instead.
- Ensure your property is always meticulously clean, tidy and well-maintained.
- Leave a welcome book —either physical or digital— packed with handy information about the area.
- Offer contactless check-in, so guests don’t need to hang around waiting for you.
Do some upselling
You don’t need to increase your prices to improve your average daily rate. Instead, you can get guests to pay more by introducing upselling promotions. You can list your upselling offers on your holiday rental website and in your welcome book. These are special promotions, effectively allowing guests to upgrade their stay — for a price. Have a look in your local area to see what kind of deals are offered by your competitors. Here are some common upselling ideas:
- Early check-in or late check-out,
- Transportation to and from the airport,
- Grocery deliveries,
- Local tours,
- A cake or a full celebration pack for birthdays, anniversaries, and other special occasions.
- Rental of bicycles, kayaks, and other pieces of sporting equipment.
- Luggage storage (but check out the competition first, as some other holiday rentals may offer this for free).
- Breakfast delivery,
- Prepared meals for guests on the evening of their check-in.
You may well have ideas of your own. It’s a good idea to play around with upselling promotions. Use them when you advertise your holiday home and see which ones get the most attention.
Make partnerships with local businesses
As well as upselling, you may be able to introduce some cross-selling promotions. The difference here is simple: upselling offers are things that you (or your team) handle, whereas cross-selling deals involve another local business. They may include things like:
- Tours with a local guide,
- Craft workshops,
- Cookery lessons,
- Spa treatments,
- Meals at a restaurant or with a private chef,
- Adventure sports and similar thrilling experiences.
How do you make money from cross-selling? Simple. You’ll act as a middleman, so guests book the service directly through you, and you pass their booking on to the provider. You take a cut of the profits. Again, this is a highly effective way to increase your revenue. You can showcase these deals on your website, in your welcome book, and in emails that you send to guests before they arrive at your property.
Upgrade your property
Finally, if you want to raise your prices, have you considered property upgrades? This is last on our list, as it requires the most initial outlay and can be the most difficult to achieve. However, it’s always going to be a powerful strategy for landlords who want to increase their average daily rate.
The following amenities will help you command a higher price:
- A swimming pool,
- A hot tub,
- A sauna (if you’re worried you don’t have the space, consider using a garden shed).
- Underfloor heating,
- A fireplace, particularly in a rural property with chilly winters.
- Smart locks and smart devices throughout the property.
- Eco-friendly upgrades — solar panels and an electric car charging station.
Make sure to mention these amenities when you advertise your holiday home. That way, your guests will understand why your property is worth a higher price.