June 25, 2021
The Beginner’s Guide to Understanding Vacation Rental Pricing Data
Everyone loves data. Scientists love data. Marketers love data. And in recent years, vacation rental property managers have jumped on the data bandwagon, too. The more accurate vacation rental pricing data you can gather, the more competitive and agile you can be with your rates. In fact, the increased popularity of dynamic pricing in the vacation rental industry is, in part, because of the big data boom.
And with more and more revenue management experts offering software and services, it’s easier than ever to make data work for you.
But not all vacation rental pricing data is created equal, and understanding the kind of data you can tap into can help make pricing your vacation rentals a little easier.
What Types of Vacation Rental Pricing Data Can you Utilize?
- Scraped Data: This is third-party data that’s been collected using a specific kind of software, or a ‘scraper tool,’ from various competitors—usually places like Airbnb, the Expedia family, and Booking.com. Scraped data can give you a general overview of the vacation rental industry landscape.
- Authoritative Data: This data comes directly from you. Yes, you! This is the vacation rental pricing data stored in your property management system. Authoritative data is data that you can control because you (or your team, or your website) put it there in the first place.
- Lagging Data: Performance indicators, like comparing bookings year over year to create a foundational understanding of seasonal trends, fall under lagging data. It reveals trends, but can’t predict them.
- Leading Data: This kind of data can reliably predict metrics and can be turned into useable information for future use.
Here’s How: Use the Different Types of Vacation Rental Pricing Data
Once you understand the kind of vacation rental pricing data you have access to, there are a couple of different ways you can use it. Each set of data has its own unique purpose, and using each one in tandem with the other can help create a complete revenue management strategy and inform your dynamic pricing choices.
Use Authoritative Data to Understand Your Own Trends
Authoritative data is the most accurate data you could use to inform your own rates and trends since it comes from your own system, providing the smallest margin of error. But the usefulness of authoritative data stops at your own lists and can be limited based on the amount of confidential information you end up with.
Use Scraped Data as Your Bedrock
Since scraped data comes from outside of your own control, it can give you a general overview of the vacation rental industry landscape but no specifics. And scraped data’s usefulness starts to dwindle once you dig into pricing since scraping tools can’t unearth fees, taxes, discounts, or other property-related costs.
You can use this data to establish a basic understanding of the market and potential options for expanding your vacation rental property inventory.
Use Lagging Data to Reveal Trends
Lagging data reveals potential trends based on previous customer behavior and booking patterns. You may look at your summer season year-over-year to understand your peaks and which properties book the most. This kind of understanding can inform your dynamic pricing strategy moving forward.
Use Leading Data to Set Benchmarks
These predictors can help you make reasonable assumptions about the future (such as the average number of bookings you make per inquiry on your website), and shape your dynamic pricing strategy accordingly.
Vacation Rental Pricing Data Still Requires Human Experts
So you have all this data and are able to make some decisions about your vacation rental pricing. But data and pricing tools are just the first step. Not only do you need to understand the data, but you need to turn that data into actionable takeaways. AI simply isn’t advanced enough to tell you some of the more “human” pricing factors, like external factors that may impact bookings (construction or a temporarily closed pool, for example), or understand the intricacies of demand.
That’s where revenue management experts come in. Leaning on a team of vacation rental pros like Rented’s can help you develop strategies and adjust prices in real-time, giving you more time in your day to focus on your properties, owners and guests. Get in touch today, we’d love to connect and discuss the possibilities.