Keeping Your Holiday Let Profitable as Costs Rise

Every holiday let owner we speak to is feeling the same pressure: costs are going up while competition is intensifying. Energy bills, cleaning costs, platform commissions, maintenance callouts, insurance premiums — each line item has crept upward over the past few years. Meanwhile, guests expect more, not less. The properties that thrive in this environment are not simply the ones that cut costs — they're the ones that manage costs intelligently while working harder on the revenue side.

The Cost Pressures Owners Are Facing

It helps to be clear about what's actually driving costs higher, because different pressures need different responses.

Energy bills remain elevated for many properties compared to pre-2022 levels. Holiday lets are particularly exposed because guests have little incentive to use energy economically — they're on holiday, the heating is included, and they may leave windows open or the hot tub running continuously. Without the right controls in place, utility costs can erode a significant portion of your income.

Cleaning costs have risen sharply, partly because of general wage inflation and partly because guest expectations for cleanliness have become more demanding since the pandemic. What a guest once considered acceptable may now generate a three-star review.

Platform commissions on Airbnb and Booking.com have remained broadly consistent in percentage terms, but as nightly rates have risen, the absolute amount paid to platforms on each booking has increased proportionally. For a property earning £1,500 per week, a 15% host fee is a meaningful sum.

Maintenance is harder to predict. Properties that see regular guest turnover experience wear and tear more quickly than owner-occupied homes, and contractors in popular rural and coastal areas are busy, which keeps prices firm.

Strategy One: Make Dynamic Pricing Work Harder

The single most effective lever most owners have is pricing. Many properties in Dorset and the New Forest are still using broadly fixed seasonal rates — a summer price, a mid-season price, and a winter price — and leaving significant money on the table as a result.

Dynamic pricing adjusts nightly rates in real time based on demand signals: how many competing properties are available on the same dates, how quickly your calendar is filling, what events are happening locally, and what the broader booking trends look like. A bank holiday weekend in May is worth dramatically more than an ordinary long weekend in March — and your pricing should reflect that.

The goal is not to maximise every single booking at the expense of occupancy. It's to find the rate that maximises total revenue across the calendar year — which sometimes means pricing aggressively for peak dates and offering competitive rates for shoulder periods to keep occupancy healthy. If you'd like to understand what your property could earn with optimised pricing, our free earnings estimate tool gives a useful starting point.

Dynamic pricing and analytics tools help holiday let owners respond to demand in real time

Strategy Two: Reduce OTA Dependency

One of the most meaningful long-term strategies for improving profitability is reducing your reliance on Airbnb and Booking.com. Platform commissions range from 12–20% depending on how you structure your account. On a busy property, that's a substantial annual sum going directly to a platform rather than into your pocket.

Direct bookings — guests who book through your own website rather than a platform — typically yield significantly better net revenue per booking. There are no host fees, no guest fees that can inflate your effective price, and you retain full control of the booking relationship. The challenge has always been getting found and earning the trust that a platform's brand provides.

A well-designed, SEO-optimised property website with professional photography, a clear booking flow, and trust signals (reviews, a clear cancellation policy, secure payment) can compete effectively — particularly for repeat guests and for travellers who find you through Google search rather than the platform's own search. We build these for owners through our direct booking website service. Even a modest shift — 20–30% of bookings moving direct — can meaningfully improve your net income without any change to your gross revenue.

Strategy Three: Control Energy Costs Without Compromising the Guest Experience

Energy costs can be managed without guests ever noticing. Smart thermostats allow you to set sensible baseline temperatures and prevent heating from running at full blast when a property is empty between checkouts and check-ins. Hot tub timers, smart plugs for high-draw appliances, and clear guest instructions all help.

Consider switching to a business energy tariff if you're on a residential one — the rates can be more favourable for properties with consistent usage patterns. And if you have the ability to install solar panels, the economics for holiday lets with high daytime energy use can be compelling.

Strategy Four: Invest in Quality to Command Premium Rates

One counter-intuitive response to rising costs is to invest in the property rather than cutting back. Properties that deliver a genuinely premium guest experience — exceptional photography, thoughtfully furnished rooms, a well-stocked welcome pack, the small details that generate five-star reviews — can command nightly rates that comfortably absorb higher operating costs.

The difference in nightly rate between a four-star property and a four-and-a-half-star property on Airbnb can be 15–25% in competitive markets. The investment required to cross that threshold — better photography, updated soft furnishings, a few thoughtful additions like a coffee machine or a set of good quality bikes — is often far less than the compounding value of higher rates sustained over years.

Our guide on furnishing for five-star reviews covers the specific improvements that guests notice and rate-checkers reward most.

Strategy Five: Understand Your True Costs

Many owners have a rough sense of their revenue but a surprisingly vague picture of their actual costs. Cleaning fees, consumables (toiletries, welcome pack items, coffee, cleaning products), small repairs, platform fees, and management commissions all add up. Without a clear picture of your cost base, it's hard to know which levers to pull.

We'd encourage every owner to build a simple monthly P&L that captures gross revenue, platform fees paid, management commission (if applicable), cleaning costs, consumables, utilities, insurance, maintenance, and any mortgage interest. The picture that emerges is often surprising — and illuminating. If you're working with us, we provide this visibility through monthly owner statements as standard.

Why Professional Management Pays for Itself

It might seem counterintuitive to pay a management commission when you're trying to protect margins. In practice, the properties we manage consistently outperform equivalent self-managed properties in the same area — not because we charge more, but because we price more precisely, respond faster, earn better reviews, and fill gaps in the calendar that self-managed owners typically leave empty.

The management fee is also a fully deductible expense against your rental income, which reduces its net cost. If our involvement generates 15% more annual revenue — which is a conservative estimate for properties that were previously self-managed with fixed pricing — the commission pays for itself many times over. Read more about the true cost of self-managing your property.

If you'd like a straight conversation about whether professional management makes financial sense for your specific property, get in touch. We're happy to talk numbers.