I think it really varies from listing to listing. I can imagine how in some situations longer term stays could be way more profitable. It isn’t in my case, but I can picture it being advantageous for others.
Put in your listing that longer stays are already discounted and that you are very sorry but you can’t discount further. You’ll lose some bookings but you will sleep better at night by sticking to a policy that engenders self respect and forces you to believe in your property and take stock of it accordingly.
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We offer a very small weekly discount but don’t take stays over 28 days. I prefer stays of about 3-5 days. Those guests are generally gone most of the time and have little impact on the place; don’t do much cooking, etc.
As far as gaps I price our place so that we can afford a gap here or there. Usually if I drop the price on the gap dates, however, they will fill. I decide whether we want to be bothered and/or can get a cleaner. Often times those gaps are our chance to do some touch up painting, minor repairs, improvements to the unit or deep clean.