Pricing is one of the biggest challenges for vacation rental property managers. If your rates are too high, you risk losing bookings to more competitively priced listings. However, set your prices too low and you’ll miss out on profit.
As supply and demand fluctuates throughout the year, it’s crucial to make sure you always have the right price at the right time. Making frequent adjustments to your rates based on market data is the key to successful revenue management.
The best way to make data-driven pricing decisions is to use a dynamic pricing tool. There are a number of dynamic pricing tools on the market designed to fit the needs of short-term rental property managers, large and small. In this article, we’ll recommend four of our favourites.
But first, let’s discuss why dynamic pricing software is essential.
Why do you need a dynamic pricing tool?
Dynamic pricing tools allow property managers to increase revenue, maximise occupancy and grow their business by ensuring that your properties are always listed at the ideal price.
There are two main benefits of incorporating these tools into your yield management strategy:
Increase your profits
Dynamic pricing software solutions are built on powerful data engines that they use to constantly monitor the market and your competition. They can tell you when to expect rises and falls in demand based on historical and real-time market data, as well as other factors like upcoming events.
Based on this information, dynamic pricing tools determine the optimum price for your rental on any given day using Artificial Intelligence and Machine Learning algorithms. This helps to ensure that you earn as much as possible from bookings while remaining competitive enough to attract guests.
To do this work manually would take a huge amount of time and effort. As well as looking at past data, you’d have to constantly keep an eye on changes in demand in the market and local areas.
This would become increasingly difficult as your portfolio grew, especially with properties in different locations around the world subject to unique booking patterns and local market trends.
Dynamic pricing tools use algorithms to do the monitoring and generate pricing suggestions for you, so you don’t need to spend as much time adjusting your prices.
If you’re looking to invest in a dynamic pricing tool, we’ve selected four of the best tools on the market for you to compare.
The 4 best vacation rental dynamic pricing tools
A great dynamic booking tool gives you the power of AI technology combined with the freedom and flexibility to use your knowledge of your market to control your own pricing strategy.
Let’s have a look at our four popular dynamic pricing tools for vacation rentals.
Wheelhouse gives you data-driven recommendations while letting you retain control over your strategy. The tool has tailored plans for part-time or full-time hosts, and professional property management companies.
You can customise a wide range of settings such as minimum price, minimum stay, last-minute discounts, weekend rate adjustments, seasonality adjustments and more.
In each of these categories, you can choose to follow Wheelhouse’s recommended settings, or opt for more conservative or more aggressive pricing options. You can preview how this will impact your pricing strategy.
In your dashboard, you can track your performance with real-time insights, allowing you to build your own personalised strategy that you can learn from and adjust over time.
The software integrates with many popular PMS providers and channel managers, including Rentals United.
Price: Depends on the number of listings you have. For 1-4 listings, you’ll pay $19.99 per property per month. If you have more listings, you’ll get bulk discounts.
To find out more about Wheelhouse, watch the VRTECH Spotlight video below!
2. Beyond Pricing
Beyond Pricing is a revenue management software that helps you automate your prices and make smart adjustments based on demand.
The tool offers constantly updated recommendations to help you maximise occupancy and revenue.
As their name suggests, Beyond Pricing offers more than just dynamic pricing. They also provide deep insights and metrics, OTA syncing, a booking engine and website builder and local expert guidance on revenue management.
The software analyses over a billion data points a day and looks at a variety of factors that can influence demand, such as seasonality, day of the week, local events. When prices change, you’ll understand why.
The tool gives each of your properties a health score, meaning you can easily spot opportunities to improve your pricing strategies.
Beyond Pricing connects to most popular PMS tools and channel managers, including Rentals United.
Price: After a 30-day free trial, Beyond Pricing charges 1% of your total bookings.
PriceLabs provides price recommendations based on market supply and demand, seasonal and day of the week trends, special events, holiday predictions and number of days left to book.
The tool combines market data with customisation options to give you full control over your pricing strategy.
By looking at local and historical data, and analysing each listing’s performance, PriceLabs recommends a base price for your property. It will adjust this depending on local trends and seasonality.
You can use the data as well as your own knowledge of your market to adjust the price level of listing at any time.
There are plenty of customisation options which allow you to set dynamic minimum stays, last-minute discounts, and tools to help you fill small gaps in your calendar.
PriceLabs started as a pricing tool for Airbnb, and now integrates with a wide range of PMS tools and channel managers, including Rentals United.
Price: Depends on the number of properties you have. After your 30-day free trial, you’ll pay $19.99 per month if you have 1 listing. There are discounts available for larger portfolios.
4. Perfect Price
A pricing software designed for professional property managers, Perfect Price offers AI-powered dynamic pricing.
The tool can recommend and automatically update prices to match demand up to two years in advance. You can look ahead to the coming year to see occupancy data and prices for your competitors, local events that may affect pricing, and other market trends.
Sophisticated length of stay strategies can help you secure longer, higher-paying bookings all year round. For example, you can customise your standard minimum stay, far-out bookings, seasonal and event bookings, last-minute bookings and get bookings for gap nights.
By setting explicit rules to apply to some or all of your properties, you can stay in control of your strategy. Through powerful dashboards, you’ll have plenty of visibility into your rentals’ performance and be able to track the competition, and discover what factors are influencing prices.
Perfect Price integrates seamlessly with a selection of PMS tools. They offer a free trial and weekly Q+A webinar.
Price: The enterprise package includes unlimited users and 5 hours of training. Price is available on request.
How to choose the best vacation rental dynamic pricing tool for your property management business
There are many factors that go into your decision regarding which dynamic pricing tool is right for your vacation rental business.
As you browse the different options, here are a few things to consider:
Think about the features you most value, and look for a tool that does everything you need it to.
Read through the product specs and if you aren’t sure, it’s always a good idea to speak to a customer service representative to find out exactly what the tool can and cannot do.
Consider whether the tool fits with your budget. Some charge a fixed fee based on the number of properties, while others charge a percentage of your bookings.
You may have to calculate which option is best for your business.
The tool should be user-friendly, and this will depend somewhat on your own personal preference.
You may prefer a detailed dashboard with lots of customisation options that allow you to dive deep into the data.
Alternatively, a simple tool that’s easier to learn might be better suited to your business.
In either case, sign up for a product demo – this is a great way to get to grips with the tool’s interface and find what works for you.
Lastly, choose a dynamic pricing tool that is compatible with your current PMS and channel manager to avoid having to completely redesign your current operating system.
For more vacation rental technology tips and insights, join the VRTECH community now! And, don’t forget to check out our latest blog posts about the best vacation rental website widgets and check-in apps.