Where the loss comes from
In an apartment, one empty night costs several times more
A forty-room hotel spreads a pricing mistake across forty units.
With five apartments the same mistake lands whole on your bank transfer.
Short-term rental rate cards usually have three lines: season, off-season
and long weekend. They get set once and stay untouched. That rate is wrong
in both directions at once. On dates with demand the apartments sell out
two months ahead at last year's price. On dates without demand they stand
empty to the end, because nobody moved the rate in time.
Apartments also carry three things a hotel does not. Cleaning costs the same
for one night as for seven, so a short stay at a low rate can end up below
cost. Two units in the same building sell differently, because the size,
the floor and the view are different. And apartment guests book closer
to arrival than hotel guests, so there is less time to react.
A room night is a product that spoils at midnight. You cannot sell it later
or carry it into next month. That is why with apartments, reacting to what
the calendar is doing is worth more than the rate itself.
This is not an argument for discounting. Just as often we raise rates -
on the dates the unit would have filled anyway.