How to Calculate Villa Daily Rate
Finding the Right Price for Your Bali Villa
When deciding to stay in a Bali villa, the night rate is the deal breaker for many tourists visiting the island. That is why it is crucial to set a fair and competitive price to make your villa appealing to visitors in Bali. This article will help you figure out how to set an ideal daily rate for your villa in Bali.
Things that Affect Villa Rates in Bali
Location matter
A villa situated in a strategic location will be high in demand which also affects the price. For example, a cozy apartment closer to a beach club or trendy locations can have a similar price compared to a bigger villa with more facilities but located in a less popular area.
Besides the proximity to trendy attractions, locations with picturesque views like beachfront or rice fields have a competitive advantage and are likely to charge more.
Villa Size and Amenities
How big is your villa, and what amenities does it offer? Bigger villas with private pools, landscaped gardens, and extras like spas or game rooms usually mean renters will pay more for the stay.
Season
When it comes to seasonality, Bali has a big advantage over other vacation destinations: Bali is not as affected by seasonality. The visitors who come to Bali are consistent throughout the year, which is good news for villa owners who rent out their properties.
In AirDNA, a high score for seasonality means consistent booking throughout the year.
Source: AirDNA
However, this does not mean that holidays such as Christmas and New Year’s Eve have no impact on villa rent in Bali. The summer and end-of-year vacations still bring in more tourists than usual, so prices shoot up during these periods too.
Trends and Demands
Market trends and the demand for certain designs influence the daily rates of a villa. Even before the global slump in 2020, Bali’s tourism and rental market was growing steadily year on year. 2022 marks the point of recovery for Bali and by the end of 2023, it is showing similar growth as before the disruption.
What's hot and what's not? Villas that are all about the latest styles and meet what people are asking for usually hike up the rates a bit. For the last 3 to 4 years, villa renters in Bali have preferred Mediterranean designs, which blend well with Bali’s tropical surroundings.
How You Manage It
If you manage the villa yourself, you may have the advantage of having lower rates as you don’t have to use the services of a management company. However, self-managing a property involves a lot of work and if you are a foreigner, you have to understand the regulations as company incorporation and some conditions are required.
If you have little or no experience with managing a rental property, we strongly recommend that you work with a professional management company. Even though it comes at an additional cost, their wide marketing channels and consistency in providing quality services renting out your villa are worth the price to maintain the villa’s brand. It could even bring in more revenue after commission than if you had done it yourself, and without the headache.
Figuring Out the Right Villa Rates
First, think about your villa's style and where it's at. Then, do a little homework. Check out your Airbnb or Vrbo apps for similar villas nearby to see what they're charging. This peek into what's out there will help you land a price that's not too low and not too high, just right for your place. Consider the market demand in your local area and seasonality when you adjust your rates, that way your villa will remain competitive.
If you find it a hassle to calculate on your own and happen to rent your villa using Airbnb, then we recommend you check a feature on Airbnb called smart pricing. According to Airbnb, when you use the Smart Pricing feature, your nightly prices automatically adjust based on demand. This is a helpful tool if you want to optimize pricing without constantly monitoring it. Another good thing about this feature, you still have control where you can set minimum and maximum price limits and customize specific nightly prices in your calendar at any time.
In summary, determining a fair rate for your villa is highly dependent on the competition within the neighborhood and the condition of your villa. If you’re interested, we have a list of curated excellent villas for investment in high-demand areas.
