The law of supply and demand states that generally, a low supply and high demand will increase the price of a product. So our goal today is to help you translate your offer to travelers as being “low supply.”
If you do this, you’ll raise demand, interest, and yes, even your rental rates.
If you don’t differentiate your vacation rental from others, travelers will perceive your property as one of many similar properties available.
This leads to lower rates, a spotty calendar, more haggling and stiffer competition in the marketplace.
We’re addressing the law of supply and demand first, because it’s at the heart of this multifaceted discussion.
In order to increase the demand for your vacation rental, you’ll need to demonstrate your property as being “scarce.”
Here’s some food for thought and why that’s important.
The Psychological Perception Of Scarcity
There was a study done in 1975 by Worchel, Lee and Adewole.
The purpose of the study was to determine how scarcity influences the perception of people.
In their experiment, they presented 2 jars of cookies. Participants were asked to eat and rate the cookies in each jar.
The difference in the presentation of the cookies was only that one jar had 2 cookies and the other had 10.
The jar with 2 cookies received ratings that were twice as high, even though all the cookies were exactly the same!
Scarcity affected their perception of which cookies were better. Why?
When there’s a sense of scarcity present in your offer, it makes it easier for travelers to move forward with a purchase.
That’s because scarcity can translate as social proof for potential customers.
Why was there only two cookies left in the cookie jar?
It must be that they were so good, they were preferred by others, right? Social proof gets people thinking.
Psychologist Robert Cialdini’s theory of social proof enlightens us on why we look to people when making decisions.
Cialdini explains that people look for insight and guidance from a greater and more informed consensus.
Vacation rental owners and managers who make full use of social proof in their marketing drive up a sense of demand. And that my friend, is great for your business.
So how can you utilize scarcity within your vacation rental marketing strategy?
Create Scarcity Through Uniqueness
You want to make your property so clearly different that customers understand your property and offerings are unique. A better word is- unusual.
Your offering should be so unusual that people have to do a double-take to investigate your property further.
Travelers need to get the message and understand that if they don’t book with you, they won’t get what you have elsewhere.
Activate The Fear of Loss
You want them to feel they’re losing out on something special if they don’t book your vacation rental.
Psychologist Daniel Kahneman’s Loss Aversion Theory is based on research that revealed the pain of losing is psychologically almost two times as powerful as the pleasure of gaining.
When you effectively create scarcity and tap into that fear of loss, you’ll gain a leg up in the marketplace. One reason why is because there’s a sense of urgency when a product is scarce.
Sense Of Urgency
When there’s a sense of urgency, customers react sooner to offers. They’re quicker to respond because they want to avoid the disappointment of losing out.
They’re also less resistant to pay premium rates. But what if there are other properties similar to yours?
How do you create demand, scarcity, urgency and leverage the fear of loss when there’s an abundance of properties available for rent all around you?
Great question. I’m glad you asked. I’m going to share 3 vacation rentals on the Isle of Palms in South Carolina that do this successfully in an extraordinary way.
To create this type of demand though, you’ll need to provide a product and service that is so desirable, travelers want to experience what you have over other options available to them. But how do you do that?
Drastically Different + Desirable = Demand
If you design your property’s offering to be drastically different (not just a little different), you’ll enjoy higher rates and book more frequently.
The problem I see, is that we don’t all think of our properties as unique and as a scarce commodity, therefore we don’t present our properties as such.
Your property is already in short supply, after all, you have a very limited amount of weeks available for rent in a year.
You have fewer peak, summer and holiday weeks. This is especially true if you own a seasonal vacation home.
The point is, your property is a scarce commodity! It’s now up to you to further leverage scarcity in your offerings.
We often compare our properties to others in our communities, buildings and market.
We watch what others do and mimic them. That’s not always good!
As an entrepreneur you definitely need to check out the competition, but you can’t do what everyone else is doing and expect to get more than they do – that puts you in an uphill battle.
In a crowded market, you need something that draws attention to your listings and advertising.
You need something odd that stands out. I call it, “The Element of Unusuality.”
Take a look at your property. Is there anything truly unusual about it inside?
Does it look much like the rest of the properties with the same showcased amenities everyone else has?
Have you ever thought of decorating your property with unique furnishings or an uncommon amenity?
How about your vacation rental listings? Does your property blend in with others?
Do you have an eye-popping photo with vibrant colors shot at an unusual angle?
If everyone is using day shots, consider a night shot of your property for the property’s lead photo.
The point is to add the Element of Unusuality in all you do- including your advertising verbiage, deals and ad titles.
What is your Element of Unusuality?
Let’s take a look at the 3 vacation rental properties located on the Isle of Palms in South Carolina.
They’re a perfect example of everything we’ve discussed, but they especially embrace the Element of Unusuality.
These vacation rentals are so unique there is virtually no competition, even though they are in a highly saturated vacation rental area.
Since there aren’t any other properties in the market like them, their vacation rentals are a scarcity in the vacation rental market.
They’ve taken their branding beyond the norm as every piece of decor in the home is centered around a branding experience that travelers immerse themselves in.
In these homes, you can rest in a tomb, sleep with cats, and even dine with dinosaurs.
Now that’s unusual!
You can see “The Three Most Unusual Vacation Rentals In South Carolina” in an article I wrote on BreakAway Vacation Rentals.
I’ll be sharing hard examples and tools you can use within your vacation rental marketing strategy and website right away so make sure you sign up for our newsletter.
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