Wanna make a deal for cottage rentals? The art of negotiation…
Some owners have a tough time negotiating. They have designed a website. They made their cottage rentals wonderful and family friendly. They have gone to a lot of trouble researching the local ads and established what they believe is fair market value. Things seem to be going well. You’ve got the perfect family interested in two weeks together and they are ready to book and plop down their deposit and/or full payment. Then the ultimate question comes, “would you be able to give us a better price?”
I know. When you establish the price that’s what you have decided should be the amount. But times have been very tough on many. The economy has not bounced back and salaries, especially in Ontario are at a point where they were in the 90’s, for a lot of line staff and hourly positions. Yet the cost of living has risen. Families especially, shy away from expensive trips down south because they do not fit the budget anymore. Be prepared, you are going to be asked this more than once by someone who is looking for something nice AND affordable. Understand where it is coming from.
First, read the ad or email you are responding to, very carefully. Ensure that you are not trying to sell someone a Lexus style Ontario cottage rentals, when they can only afford the Civic. Screen your clients up front just as they would be screening your cottage rental. That is key. Ask the right questions and ensure that your rates are in fact posted on your website or in your ad so they are no misunderstandings. And KNOW your costs. You are in this to make money, a profit of some kind, to continue to afford to keep your business going. There are basic costs, (incurred while the cottage sits vacant i.e. taxes) and there are added costs when it is in use (incurred while the cottage is rented, i.e. hydro). Be prepared.
Second, if you do meet and the question does get raised by the potential rental guest, have an open conversation about it. Try to listen carefully and speak honestly to have effective communication. Ask questions like, “what’s your budget for the week?” Don’t avoid it and become frustrated and walk away. “What did you have in mind?” Is another good question to ask your potential rental guest? Put the onus back on the other person. They brought it up; they should have an idea as to what they can afford so no one time is wasted.
Thirdly, identify the ridiculous up front. I had one person running me around like a chicken. In the end he didn’t want to pay anything. He wanted to chop wood for the entire cost of the rental period (2 weeks). Well I don’t have a wood burning stove (as it indicates on my site and ads). And I don’t normally have a ton of firewood, so the idea went nowhere, but it took him a while to answer my direct questions. Some will offer a barter of services to cover the cost of the rental, and that’s not a bad trade, depending upon what you are getting. There are other types of services that could be helpful for a weekend away i.e. landscaping, deck and dock repair, plumbing or repairing a roof… if you need it done and would have to pay for it, it could work.
I just don’t recommend making a habit of it too many times. You may not always get a certified contractor doing that kind of work, and that could be risky. Plus, don’t forget that often the services could possibly not be completed in time and the rental period has already been issued. Always include a damage deposit in these types of arrangements, AND ALWAYS, have a separate type of agreement that clearly lists what is expected to be finished and what will be deducted out of the deposit if not completed.
Fourthly, be flexible to an extent. Be open to the idea of perhaps knocking off some dollars to enhance your offering and attract more renters for the season. Have a “no tax” promotion. Offer a discount for people who pay up front in full and very early in the season. Reward them. Do a package deal where you include a few extras for a bit of a lower price to secure as many bookings as you can earlier than later. Offer value in other ways to enhance your cottage rental during slower seasons. Try lowering your pricing in very slow times to attract attention.
Lastly, don’t be afraid to walk away from the discussion. Some people will just want to pay as little as possible because that is who they are and what they believe in. You know your costs. And yes, I have walked away from a deal. I don’t get angry, I just take it in stride and move on. And I have used the phrase, “Take it or leave it…” more than once. I had one family insist that they were 4 people in total. Yet when we met to sign the agreements, they changed their occupancy to 12 and still wanted to pay the lower rate, saying that it was what we had agreed upon in our communication prior.
Well occupancy changes things, especially costs. It increases them considerably, and they refused to listen to me. I listened, and I tried to explain, but they were insistent. So I walked away. I felt as though I was being pressured and bullied into submission. And that’s not a good feeling, so I did walk away from that deal.
At the end of the day, you are in it to make a profit and recover your costs. If your rental guests do not care, perhaps your cottage rentals is not the right fit for their family. Making deals can be fun, and at the same time arduous. Be in the know, patient, listen carefully, and understand your limits. Rental guests will appreciate it in the end.