As a vacation rental owner, you’re dealing with various issues, such as housekeeping, growing revenue, staff management, marketing, etc. If you are looking for an easier way to operate your rentals, only one option will remain, and that’s automating your work. Automation in setting nightly rates is the key to get ahead of the competition and gain more market shares. In this regard, there are various vacation rental pricing tools that can make life easier for you. These tools take a step further and introduce new possibilities such as dynamic pricing to not only increase your profit margin but also have a seamless operation.
To get more insights into the potential benefits of using dynamic pricing tools, continue reading this post.
What Is a Vacation Rental Pricing Software
Pricing tools are the best way to apply dynamic pricing effortlessly. An intelligent pricing tool provides pricing recommendations specific to your rental through analysing both historical data and market real-time data.
Dynamic pricing software can optimise pricing and increase profits due to offering various services, such as:
Monitoring the market
The pricing software scans the market changes actively and modifies prices in response. Accordingly, it helps maximise your profit and stay on top of the competition. For instance, it decreases your rental rates if the nightly rate of similar properties declines over a given period of time. It also increases the price to take advantage of the growing demand when the market’s supply decreases.
The pricing tool makes suggestions according to your business pricing strategy. So it accepts limitations, such as minimum rate and length of stay. You can also ignore its recommended prices whenever necessary.
The dynamic pricing tool can directly integrate with listing channels, your direct booking website, and your PMS or channel manager. So the changes you made will be directed to the booking platforms fastly and will keep them updated.
Why Use a Vacation Rental Dynamic Pricing Tool
You may vamp one or two properties all on your own. But it becomes impossible to have comprehensive control over the operations of a wide portfolio, and setting rates is not an exception.
Here are some reasons why you should consider using a vacation rental pricing tool if you are thinking of growth.
- Market fluctuations: In the short-term rental industry, demand isn’t exclusively defined as high season and low season. It has remarkable fluctuations during those periods, which must be understood regularly for easier following the market trends.
- Following market trends: Making estimations based on your experience may be an option but is not much reliable compared to the market real-time data due to unexpected market moves, leading to too high or too low rates.
- Tracing competitive sets: In mapping rates versus competitors, it is possible to search manually. However, it is quite time-consuming to cover the whole competitive set in your market.
- Acting fast: The demand is notably volatile and time-sensitive. Thus, you must respond fast to the market changes in order to beat competitors and avoid low occupancy.
So utilising a pricing tool is a priority for all property managers to remarkably boost their revenue.
How to Pick a Pricing Tool that Works Best for Your Short-term Rental
The tricky part is to determine which pricing software you should include in your revenue management toolbox. To choose a tool that suits your business goals best, you may consider the following items.
Compatibility with your current tools
Because many systems only integrate with one pricing tool, and as the tool must render seamless integrations with those systems, you must consider what your PMS and channel manager recommend.
It is also essential to figure out which pricing tools are supported by the listing platforms you have connections with.
According to your expectation from user-friendly software, you may choose a tool that offers more customisation options over, for example, a tool with a more manageable dashboard.
However, you should know that famous pricing tools give services to vast businesses, from hotels to airlines. Thus, they might not be able to provide flexible options to meet individual desires. With this regard, Zeevou is offering a new feature called Rate Rules, a more customised system in which you can set your own specific rules easily.
The cost and payment methods that each pricing software offers also matter. Regarding your annual revenue and relevant strategies, you may choose specific monthly payments instead of paying a percentage.
It is recommended to sign up for free trials or request a demo to compare different tools before making a decision.
What Are Top 3 Vacation Rental Pricing Tools?
Beyond (formerly Beyond Pricing) is a dynamic and demand-driven pricing tool for short-term rentals. This tool determines daily demand by considering many factors, such as local demand, seasonality, and day-of-week trends.
Beyond has integrations with many channels including, Vrbo, Airbnb, Booking.com, and Hostfully, to name a few. It can also sync to many property management systems.
This platform charges 1% to 1.5% of overall revenue and may apply a setup fee.
PriceLabs helps vacation rental owners grow their revenue by offering dynamic pricing, market dashboards, and portfolio analytics. It gives price recommendations based on local rentals and hotels, historical data, seasonality trends, special events, and lead time.
Their tool integrates with Airbnb, VRBO, and also with other BnBs, vacation rentals, apart-hotels, and serviced apartments.
The total cost for one listing would be a fixed monthly amount of $9.99, or $19.99 depending on the country. The price will decrease as the number of listings increases.
Wheelhouse assists any type of renter, including hosts, vacation rental owners, and property managers, in operating their rentals through empowering dynamic pricing, revenue management strategies, and data insights.
This software works with channels like Airbnb and many other popular PMSs.
They offer two payment plans: 1% of total revenue or $19.99 per listing per month.
All these three tools provide a 30-day free trial.
How to Improve the Pricing Accuracy of Vacation Rental Pricing Tools
Dynamic pricing tools, although smart, still need regular monitoring and customisation. Furthermore, some pricing tools lack the feature of providing a base price and require manual input. It’s also essential for hosts to analyse their property’s return potential before setting prices and providing data for pricing tools.
One of the tools that can enhance your pricing accuracy and efficiency is the property deal analyser. This tool performs precise analysis of property profit and provides data for accurate pricing decisions, reducing the risk of under-pricing.
By using a dynamic pricing tool in conjunction with a property deal analyser, hosts can make more accurate and efficient pricing decisions, ultimately leading to increased profitability.
Technology can come to help property managers and short-term rental owners in automating any aspect of running a rental, including pricing optimisation. Using a smart pricing tool must become part of property owners’ lives, especially for those who operate larger portfolios.