UNDERSTANDING DYNAMIC PRICING FOR
VACATION RENTAL HOMES
Utilizing our dynamic pricing software means you can expect 10%-40% increase in pricing and occupancy. Thereby either decreasing our fee or wiping it out outright.
What is Dynamic Pricing?
Dynamic pricing is a software based tool that connects a pricing strategy to a vacation rental home on each and every channel its listed. Beyond that, its the software that allows us to define our rate strategy and maximize revenue on each channel for each property. By having the ability to customize rate strategies, add dynamic pricing, generate coupons and promotions, with automatic updates to your channels, we are moving pricing up and down daily all in an effort to both remain competitive to comparable homes and achieve the highest nightly rate possible without sacrificing either quality of guest or outright loss of bookings.
Who needs Dynamic Pricing?
Everyone with a vacation rental home.
Summarizing Dynamic Pricing?
In short, it's a daily price update to your listing that takes into account day of the week, length of stay, time from booking to stay, special events, holidays, comparable homes (their prices and occupancy), nearby hotels (their prices and occupancy) and approximately 100 other data points.
Daily optimization: This means prices for your home will adjust every day. A price may move down as an open date gets closer and remains unbooked. The software will start to lower the price (never going below the minimum) in order to appear more attractive for potential travelers.
When does Dynamic Pricing become useful?
Well, just about always. But certainly when going live with a listing. Why? When a property has no reviews, or guest stays, the online platforms interpret that as a negative for search rank result purposes. To be effective, pricing should be composed of a base rate, a minimum rate, a maximum rate, a discount strategy, and availability settings.
Minimum Rate: This would be the rate that can be set with Air Concierge and owner input and price per night will as determined by the software will never fall below this amount.
Base Rate: This is the rate in which the software will base from (going both up and down). Price will base up for peak seasons, special events, holidays, and any surge in inquiry & booking activity for your home, nearby homes, hotels and other properties we manage.
What does Dynamic Pricing look like?
This chart illustrates what those hidden pockets of revenue are—fluctuations in daily demand. Flat or seasonal pricing doesn't account for these changes. It also doesn't allow you to automatically go as high as you should when demand spikes, or as low as you should when demand softens. Flat and seasonal pricing is not tied to these demand trends and data, and these methods rely heavily on manual work.
On the contrary, the Air Concierge utilized dynamic pricing software is powered by an algorithm that automatically positions your properties to be booked at the best price at the right time. It utilizes several strains of complex logic, culminating in the correct daily price for each listing. During periods of high demand, the algorithm will adjust upwards from the Base Price. It will do the same during low-demand periods, reducing the price accordingly.
