Setting Rates Using Dynamic PricingAug 28, 2020
The vacation rental business has become fiercely competitive these days. You are not alone with a vacation rental in your city or town and there are owners who will always try to wrest away your customers through competitive pricing. You must be careful in your pricing to attract many guests. These days, offering discounts during the offseason is a strategic part of pricing, as well as knowing when you can and should charge more for certain dates, like special local events and holidays. Using Dynamic Pricing during those times, and really all of the time, can bring in more money and keep your occupancy rates for your vacation rental high.
Why I Love Dynamic Pricing Geeks
Setting prices very low is not a very good idea for your vacation rental. Never compete for last place. But how do you know where to set your prices? You can look online at other properties but you’re only seeing the units that haven’t been rented out yet. Plus, how do you know what a special event is taking place in your town that you have never even heard about? Enter Dynamic Pricing. A wonderful War Room filled with awesome geeky guys and gals who love to play with numbers. Let’s all give thanks to God for them! These people can tell what the demand is like for your property and they know when events are taking place. How? Who the heck knows or cares! Little birdies fly in and tell them that hundreds of people more than usual are searching the same dates and they will automatically price your property accordingly. That’s all you have to know.
They’re geeks and they’re great!
Sure, you could do this yourself if you had the computer power and man-hours. Sure you could just lower your prices and compete for last place. You may even attract large numbers of guests initially but you will also experience loss of income and you don’t want that. Also, low prices will attract bad guests who are likely to prove irresponsible. I don’t want to sound like a prude but lower-priced rooms bring lower quality guests. It’s just a fact. Those types of guests not only complain more and demand more of your time, they also damage your property, causing you huge losses in your vacation rental business. On the other hand, setting the price high will scare away price-sensitive guests. You will not get repeat guests because they may feel they are overpaying for their stay in your vacation rental. These are the reasons why you need to find the sweet spot in your housing market to keep attracting large numbers of guests. If companies like Wheelhouse, Beyond Pricing, and Airdna are already paying a bunch of happy number jockeys, well shoot… it’s a no-brainer!
Remember, alone, it may be difficult for you to correctly estimate these numbers. There is no dearth of owners who set the price low and underestimate their expenses. You slowly learn your operational costs as well as costs of keeping your property in good shape. You also begin to understand how to cut down on many recurring costs. This is when you know the optimum price point that will not only attract large numbers of guests but also allows you to make a decent profit out of your vacation rental business. Let the Geeks do their job because they rock at it.
Dynamic Pricing Tools Make Setting Prices Easy
By using these dynamic pricing tools, you will find that setting the price for your vacation rental becomes easy and automatic. These tools make use of available data to know which dates in a calendar year are hot (there are more searches for vacation rentals in your area on these dates). Price setting becomes automatic and you can rest assured that your prices are optimal to catch the attention of tourists arriving in your city and land you some extra cash in your pocket. During the off-seasons, they will lower your prices to attract a few guests shopping at that time. A dynamic pricing structure will help you in growing your vacation rental business in the long run. They’ll make you more money and get you more bookings than you can do on your own, for certain.
Now go and grow!
Michelle R Russell
© The Prosperity Process, LLC
Want to hire a Virtual Assistant but don't have a clue about how to get started...
We've created a program just for you inside our membership, VA Advantage. Not a member yet? We've got you covered, too. We've made this program available for "outsiders" for a limited time and for less than $20. Grab it now before it's too late!
Go and Grow...
If you want to become financially free, you need the right education. That’s why we created our Mini-Courses on investing in Short-Term Rentals. If you are serious about investing your time and money into an Airbnb (aka Short Term Rental), you need a system. Our courses are jammed packed with everything you need to know to create massive, passive income. Plus, they're affordable.
and take a look at July's BNB Budget Makeover Series inside our blogs...
This month, we give you loads of great ideas on using your orphan days to make inexpensive changes to your properties. Begin here, with Budget Room Makeovers: Weekend Projects for Under $1000.
Don't miss a beat!
New articles, blogs, podcast episodes, and courses delivered to your inbox.
We hate SPAM. We will never sell your information, for any reason.