More than a fancy marketing term, price optimization raises vacation rental revenue by as much as 25%.
So, what is price optimization, how does it work, and what’s the best way to start using it to raise revenue on Airbnb, HomeAway, Vrbo, and other sites?
As it sounds, price optimization is about optimizing pricing on your vacation rental property.
Before we go any further, it’s important to add that unless vacation rental pricing is optimized daily, it isn’t true price optimization.
Price optimization in vacation destinations like Las Vegas, Fort Lauderdale, Nashville, and other hot areas should include a wide variety of factors. “Comps” (comparable properties) need to be continuously reviewed, considering a full range of factors that contribute to pricing on a given day.
On that note, as a vacation rental property owner, you’re not just competing against owners of private houses, townhouses, condo hotel properties and the like; among many users of sites like Airbnb, you’re also competing against conventional hotels (yes, that Westin down the road may be your frequent competition). Their daily prices are data that must go into your price calculation … if you’re aiming for real optimization.
And as they say in those middle-of-the-night TV commercials, “But wait – there’s more.” When that big music festival inks an agreement to stage their event in Nashville in two years, pricing on those dates should quickly reflect that reality.
Besides special events, holidays and off-peak periods must be part of daily price optimization. Look at it this way: At the end of the year, it’s all about your annual bottom line. Some revenue during quieter times will be much better than no revenue – and be a serious contributor to optimization.
On top of all that, price optimization should rapidly reflect legislative or regulatory changes, as well as site commissions that can impact your bottom line.
Vacation rental property owners who’ve tried to do all this on their own have generally been unable to pull it off – even when using tools of different sorts. Fortunately, at no added cost to you, the right full-service vacation rental property management service will apply advanced technology to optimize your pricing and help maximize your bottom line throughout the year. In many cases, the lift in revenue from price optimization covers the cost of a vacation rental property management company that takes care of everything and allows you to sit back and collect a check each month.
Find out more about optimizing the bottom line of your vacation rental using Airbnb and other sites. Download Capitalizing on the Vacation Rental Boom: 8 Keys to Success.