Strategize to maximize! In today’s rapid-changing and fast-growing vacation rental market, it’s important to price your property with a strategic plan to make the most of your investment. Rather than set a flat rate for the year and lose substantial profit, consider using dynamic pricing to match current demand and earn max profit. How? In a nutshell, you’ll need to research your baseline for nightly rates, study consumer booking habits for the area, and monitor/adjust pricing daily according to current market trends.
Don’t know where to start? Read on. Already feel overwhelmed? Georgia Cabins for YOU — a full-service vacation rental management company in North Georgia — is happy to develop and manage a personalized dynamic pricing strategy for your property. With an in-house marketing team, digital analytics tools, and a pricing strategy master, it’s the beginning of a profitable partnership!
Baseline for Nightly Rates
Before reaping the benefits of pricing dynamically, you must first find a reasonable baseline for your nightly rates. To get started, it’s helpful to have a list of comparable properties in the area of similar size and quality and with similar amenities. Researching these vacation rentals and their performance over the years can help find the best starting point for your property’s rates.
Maybe you don’t have a handy list of comparable properties on hand, like Georgia Cabins for YOU. Another way to find a good baseline is to look at competitor rates for similar vacation rentals. Even better, if you have business intelligence software (more on this next), you can see how your properties compare with your competition at a deeper level to price more aggressively.
Consumer Booking Habits
After finding a baseline with property rate comparisons, it’s time to examine the booking habits of your previous and potential guests. Understanding the consumer is a vital step to pricing dynamically. Each vacation rental on the market is unique and creates different expectations, which means the booking habits of guests are different depending on the property.
For example, a spouse planning a romantic weekend for Valentine’s Day at a log cabin with a mountain view and a hot tub will have vastly different booking habits than someone planning a family reunion in summer at a 7-bedroom lodge with a private pool, a game room, and a home theater. Not only are these guests going to book at different times, but they’ll most likely have different priorities as well, like getting the best bang for their buck or splurging on a luxurious vacation.
Knowing when a typical guest will book your specific property and how much they’re willing to spend can really pay off. Tapping into this wealth of information, however, takes a lot of research, time, and effort, but it’s always worth it — literally!
Business Intelligence Software
Quickly analyzing moving vacation rental data and transforming it into actionable information to help price vacation properties according to guest demand is where business intelligence (BI) software shines. Plus, it monitors how well your property books compared to the competition.
With BI, Georgia Cabins for YOU customizes pricing strategies for each partnered vacation rental and keeps an eye on how well those nightly rates are working daily. Staying in the pricing sweet spot (not overpricing or underpricing) ensures guests book and owners profit.
Dynamic Pricing for Vacation Rentals
Now that you have a baseline for starting rates and better understand your property’s consumer booking habits and performance against the competition, it’s finally time to utilize dynamic pricing — the best way to draw in guests and max revenue for YOUR vacation rental by adjusting rates to match the ebb and flow of demand.
What Is Dynamic Pricing?
It’s all in the name! Dynamic pricing is a continuously evolving pricing strategy used to maximize occupancy and income simultaneously. In other words, if we know when demand for a vacation rental rises and falls, we can raise or lower prices appropriately to attract guests and earn the most profit year-round.
Adjusting rates daily according to fluctuations in demand — peak seasons, property types, booking windows (the period between the booking date and arrival date), occupancy rate pacing (number of bookings now compared to the same time last year), and other factors (thanks to BI) — is vital to keep your investment at peak performance. Using demand to YOUR advantage is what Georgia Cabins for YOU does best!
Why Dynamic Pricing Works — Examples
Flexibility with your vacation rental pricing strategy means flowing with demand to make your property stand out, reel in guests, topple the competition, and generate a lucrative profit. But why does dynamic pricing work? Let’s dive a little deeper with a few examples.
- Booking patterns are picking up speedily for spring break, which means guests are likely willing to pay more over the next few days. Increasing rates temporarily will yield the most revenue during this time period.
- Your competitors recently jacked up their rates and are now steadily losing bookings. Adjusting your vacation rental prices to help fill the demand for guests looking elsewhere for better deals means you’ll get the reservations and profit instead.
- One of your properties is attracting more guests than usual lately. Raising your nightly rates appropriately while the iron’s hot could prove extremely profitable!
Static Pricing VS Dynamic Pricing
Is dynamic pricing better than static pricing? Absolutely! Is dynamic pricing easier than static pricing? Nope. So, why don’t I just use static pricing for my vacation properties instead? If you honestly want to make the most of your investment property, then it’s going to take a lot of hard work and daily planning. If you want to set and forget — and make considerably less profit — static rates are what you seek.
Why Static Rates Don’t Work — Examples
Inflexibility with your pricing strategy hinders your property’s ability to stay competitive and keeps a wealth of revenue at bay. If you don’t flow with demand, your property will see more unbooked nights and miss profitable opportunities. Let’s take a look at a few examples of how static pricing doesn’t produce the profitable results property owners desire.
- A tropical storm is heading straight for your vacation rental, which means people are now looking to book in another area. Leaving your high weekend rates the same will turn noses and send reservations to your lower-priced competitors.
- Woohoo! A cool new attraction just opened near your property, and people are flocking to stay in the area. Your property is sure to book, but not raising your rates for the big event could prove disastrous to your revenue goal for the year.
- Uh-oh, it looks like your competition just released a wave of newly built properties, and guests are moving eyes from your property to theirs. Lower rates would certainly help, but static pricing means setting flat rates and losing reservations…
Fast Vacation Rental Pricing Solution
Properly pricing vacation rentals isn’t an art — it’s a well-planned strategy. At Georgia Cabins for YOU, we take care of finding baseline rates, using BI to analyze critical data, and dynamic pricing from the get-go, so you can start booking nights and earning more money fast! Plus, we have additional pricing and marketing techniques up our sleeves to ensure your property succeeds during high and low demand.
Maximizing YOUR income starts with dynamic pricing and continues with a calculated pricing tier. Most vacation rental companies only have a few pricing tiers, but at Georgia Cabins for YOU, we know you can’t lump so many properties into one category. That’s why we have a variety of pricing tiers to really take advantage of market conditions.
At Georgia Cabins for YOU, we believe properties should pay for themselves and generate a substantial income for owners. With demand-driven pricing strategies updated daily, we can help turn your property investment into a lucrative business. Plus, we handle everything from maintenance and housekeeping to guest calls and online marketing. Reach out today for an honest rental estimate and to learn more about how a partnership could be mutually beneficial.