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Units House 3 - bedrooms House > 3 - table [ [ Units , table [ [ House 3 - ] , [

Units House 3-bedrooms House >3-\table[[Units,\table[[House 3-],[bedrooms]],\table[[House],[bedrooms],[bedrent]],\table[[Apartment],[3-],[bedrooms]],\table[[Apartment],[2-],[bedrooms]],\table[[Apartment],[1-],[bedroom]]],[# of units,100.00,40.00,25.00,75.00,100.00],[Price per night,350.00,300.00,250.00,200.00,175.00],[Weight in sales mix,0.29,0.12,0.07,0.22,0.29],[Owner/vendor portion (65%),227.50,195.00,162.50,130.00,113.75],[Housekeeping expense,35.00,30.00,25.00,20.00,17.50],[Utilities expense,10.50,9.00,7.50,6.00,5.50],[\table[[Repair/maintenance/insuranc],[e]],17.00,15.00,13.00,10.00,8.00],[Laundry expense,7.00,6.00,5.00,4.00,3.50],[Setting up expense,7.00,6.00,5.00,4.00,3.50],[\table[[Variable selling and],[marketing]],10.00,8.00,7.00,6.00,5.00],[\table[[Variable admininstrative],[expense]],5.00,4.00,3.00,2.00,1.00],[Total variable cost,319.00,273.00,228.00,182.00,157.75],[Contributiion Margin (CM),31.00,27.00,22.00,18.00,17.25],[,,,,,]] bedrooms Apartment 3- bedrooms Apartment 2- bedrooms Apartment 1- bedroom
# of units 100.0040.0025.0075.00100.00
Price per night 350.00300.00250.00200.00175.00
Weight in sales mix 0.290.120.070.220.29
Owner/vendor portion (65%)227.50195.00162.50130.00113.75
Housekeeping expense 35.0030.0025.0020.0017.50
Utilities expense 10.509.007.506.005.50
Repair/maintenance/insurance 17.0015.0013.0010.008.00
Laundry expense 7.006.005.004.003.50
Setting up expense 7.006.005.004.003.50
Variable selling and marketing 10.008.007.006.005.00
Variable admininstrative expense 5.004.003.002.001.00
Total variable cost 319.00273.00228.00182.00157.75
Contributiion Margin (CM)31.0027.0022.0018.0017.25
Our business revolves around short-term accommodations, mandated by Toronto city bylaws to be rented out for a minimum of one month. Consequently, our pricing model is structured around the basic rent for a one-month unit rental, supplemented by the cost of accommodation services we provide. These services encompass furnishing the units, bi-weekly housekeeping and cleaning for each unit, maintenance, and repairs, as well as covering all utility expenses. Approximately 25% of the total rent is attributed to these services. Additionally, we consider 10% of the total rate as our desired rate of return for shareholders. (including myself, my husband, and my son)
The challenge arises when the cost of our services exceeds the allocated 25% of the total rent, thereby diminishing the desired rate of return. In addition, during the high season months (summer and spring), our occupancy rate is 85% while during the other half of the year, we typically experience an average occupancy rate of 75%. I've also come across alternative pricing strategies adopted by other companies. Could you please elaborate on these pricing strategies and discuss other pertinent factors we should consider when selecting the optimal pricing method?
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