Is there a festival happening in your town over the next few days?
Then, demand for accommodation will most likely rise, and your nightly rates should reflect this.
Is peak season over?
Then, it might be time to adjust your pricing accordingly to incentivise travellers to keep booking with you.
After all, as a homeowner and property investor, your goal is probably to maximise your rental revenue.
And one of the best ways to boost your rental income is to leverage dynamic pricing.
Never heard of the concept before?
In this blog, we’ll define what dynamic pricing is for you. And we’ll also highlight three benefits of adopting a dynamic pricing strategy for your short-term or holiday rental.
What is Dynamic Pricing?
Dynamic pricing (or real-time pricing) refers to the process of adjusting your holiday accommodation pricing based on the market conditions. It’s particularly useful in the vacation rental industry as seasons and holidays can significantly influence supply and demand.
Dynamic Pricing Software
The idea behind dynamic pricing software is to leverage technology to automatically adjust your nightly rates based on supply and demand and other market conditions. This way, the software works for you while you’re focusing on other things, helping you save time, boost your occupancy rate and increase your earnings.
As events take place, holidays kick off, or weeks get a bit quieter, the software will adjust your prices in real-time so that you never miss an opportunity to secure bookings.
How Do Algorithms Calculate Dynamic Rates?
Tools such as Beyond Pricing help homeowners or property managers maximise their pricing strategy for short-term and holiday rentals. For instance, Beyond Pricing syncs with property management systems and uses the average night rate to make recommendations. The new pricing will then reflect in your calendar once you’ve approved it.
The software defines nightly rates based on:
- The day of the week
- The season
- Upcoming events or holidays
- ‘‘Orphan days’’: these are days where booking rates are low. The tool will therefore be offering discounts to incentivise guests to book with you.
Top 3 Benefits of Using Dynamic Pricing
Maximising your Profits
The great thing about dynamic pricing solutions is that they allow you to optimise your nightly rate for each booking.
Set a price too high, and you’ll miss out on potential bookings and revenue. Set a price too low, and you won’t be maximising your income. And, unfortunately, over the course of days or weeks, this can represent a significant loss.
Dynamic pricing allows you to capture the best rate possible for each reservation by setting the most competitive rate based on market conditions.
This, in turn, helps you maximise your profits at all times.
Boosting Your Occupancy
Any vacant night means zero revenue for you. So, you need to adjust your pricing to entice travellers to stay with you during quiet times.
Dynamic pricing will help you maximise your occupancy rate by adjusting pricing based on supply and demand. While higher prices will be set for in-demand nights, incentives such as discounts or special offers will be automatically applied for low-demandnights.
Beating your Competition
The number of vacation rentals has grown significantly over the last few years. What’s more, technology has made it easier than ever for travellers to compare pricing between accommodation providers, especially thanks to online booking websites.
Dynamic pricing software will review prices set by your competition and adjust your pricing to entice guests to book with you.
As a result, using dynamic pricing will help you stay ahead of the competition and capture more revenue.
Want to maximise your rental returns? Our team of highly skilled property managers can help! As an experienced property management company, we strive to help property owners like you maximise their rental returns while saving them time and offering five-star service to their guests.
So, don’t hesitate to get in touch with us if you’d like to see how we can help.
Posted By winning-holidays
Your Holiday Home Property Specialists providing accommodation and holiday rentals in Port Stephens, Noosa, Coffs Coast and Shoalhaven.
Updated : 29th August 2021 | Words : 668 | Views : 19