What is Dynamic Pricing?
What is Dynamic Pricing?
November 5, 2018

With the increasing number of vacation rentals coming on the market in the past few years, it’s more important than ever to be fully aware of this emerging and challenging landscape. To compete means having an understanding of the many techniques and strategies available to stay ahead of your competition.

Understanding your options doesn’t necessarily mean implementing all these tools. What it does mean is knowing what’s available and roughly how it works so you can make an informed choice about which techniques are best for your unique business. In this post we’re going to take a look at dynamic pricing.

What Is Dynamic Pricing?

Used by the hotel industry for decades to competitively price rooms, dynamic pricing use is a growing trend in the vacation rental space. It’s a technology-based system that can adjust nightly rates based on daily supply and demand within a specific market. Basically, it is a system whose sole task is to increase bookings based on a pre-determined logic that is programmed ahead of time.

Dynamic pricing can help increase revenues by increasing the number of nights booked using a technology-based program that adjusts prices over time by examining all of the market-based current vacancy data available.

While there are dynamic pricing service providers, this technique can be implemented if you have a single property under contract, or multiple listings, such as you’d find with a vacation rental property management company.

How It Works

This technology-based system first begins by crawling the internet to understand what other properties charge per night for rooms similar to yours. This data can be used to make sure that your base price isn’t too high or too low for your particular market, and season. For example, if you manage more than one property, (condos, or property management companies) the software will break the data down into groups (using factors like proximity, number of bedrooms or capacity) for a more relevant data set.

Most vacation property owners know their immediate competition offering a similar value and can easily set prices. A “true dataset” is a different game entirely. It’s based on EVERY property that appears near you in Google and on the major listing channels. This allows you, or your automated system to make a more educated decision on your price per night.

Most property owners will undertake this process annually or semi-annually due to the complexity of the task. A dynamic pricing tool can gather, automate the research process, and make comp sets of the ever-changing price dynamic, daily. This allows you to competitively price your property on an ongoing basis so that you can adjust the closest open dates down in price, without changing pricing six weeks out.

Setting Up Dynamic Pricing For Your Vacation Rental

On average, a vacation rental traveler researches over thirty properties before making a booking decision. Having access to the true rental value of properties in your market and pricing your property or properties accurately can give you a major competitive advantage.

A dynamic pricing tool, or working with a dynamic pricing provider, gives you the ability to run searches, monitor trends and act on fact-based data when setting vacation rental pricing.

Is dynamic pricing right for you? It depends. Dynamic pricing is an excellent option that can result in more profit if your business fits the right profile. If you’re looking to optimize and streamline your booking process, check out dynamic pricing. It could fill those empty rooms and yield huge rewards.

November 5, 2018

With the increasing number of vacation rentals coming on the market in the past few years, it’s more important than ever to be fully aware of this emerging and challenging landscape. To compete means having an understanding of the many techniques and strategies available to stay ahead of your competition.

Understanding your options doesn’t necessarily mean implementing all these tools. What it does mean is knowing what’s available and roughly how it works so you can make an informed choice about which techniques are best for your unique business. In this post we’re going to take a look at dynamic pricing.

What Is Dynamic Pricing?

Used by the hotel industry for decades to competitively price rooms, dynamic pricing use is a growing trend in the vacation rental space. It’s a technology-based system that can adjust nightly rates based on daily supply and demand within a specific market. Basically, it is a system whose sole task is to increase bookings based on a pre-determined logic that is programmed ahead of time.

Dynamic pricing can help increase revenues by increasing the number of nights booked using a technology-based program that adjusts prices over time by examining all of the market-based current vacancy data available.

While there are dynamic pricing service providers, this technique can be implemented if you have a single property under contract, or multiple listings, such as you’d find with a vacation rental property management company.

How It Works

This technology-based system first begins by crawling the internet to understand what other properties charge per night for rooms similar to yours. This data can be used to make sure that your base price isn’t too high or too low for your particular market, and season. For example, if you manage more than one property, (condos, or property management companies) the software will break the data down into groups (using factors like proximity, number of bedrooms or capacity) for a more relevant data set.

Most vacation property owners know their immediate competition offering a similar value and can easily set prices. A “true dataset” is a different game entirely. It’s based on EVERY property that appears near you in Google and on the major listing channels. This allows you, or your automated system to make a more educated decision on your price per night.

Most property owners will undertake this process annually or semi-annually due to the complexity of the task. A dynamic pricing tool can gather, automate the research process, and make comp sets of the ever-changing price dynamic, daily. This allows you to competitively price your property on an ongoing basis so that you can adjust the closest open dates down in price, without changing pricing six weeks out.

Setting Up Dynamic Pricing For Your Vacation Rental

On average, a vacation rental traveler researches over thirty properties before making a booking decision. Having access to the true rental value of properties in your market and pricing your property or properties accurately can give you a major competitive advantage.

A dynamic pricing tool, or working with a dynamic pricing provider, gives you the ability to run searches, monitor trends and act on fact-based data when setting vacation rental pricing.

Is dynamic pricing right for you? It depends. Dynamic pricing is an excellent option that can result in more profit if your business fits the right profile. If you’re looking to optimize and streamline your booking process, check out dynamic pricing. It could fill those empty rooms and yield huge rewards.