Pricing is one of the most nuanced aspects of vacation rental property management. But it’s also the most time-consuming, and its effects are not always immediately felt (unlike paying out operational costs or managing a budget).
Revenue management is one of the best ways to ensure the health of your vacation rental property management business, whether you use a revenue management tool, train a revenue manager internally, or work with a professional vacation rental revenue management service. Let’s take a look at why.
Why Do You Need a Vacation Rental Revenue Manager?
It’s easy for experienced vacation rental property managers to make money during peak season, no matter the market. But peak season rates don’t hold up in shoulder and off-season. Vacation rental managers who go with the “set it and forget it” pricing mentality will quickly find their properties can’t compete against other property managers who use dynamic pricing to adjust to the market demand and consumer behavior.
A vacation rental revenue manager understands the ins and outs of the industry and can use data to help adjust pricing to match the demand while also meeting your company’s specific occupancy and revenue goals.
Okay, you may be saying, but aren’t there tools for that? There are indeed, and they can do a lot of the heavy lifting when it comes to calculations based on large amounts of data. And while there are revenue management tools (like Rented’s Automated Rates Tool, or Art) that can help property managers stay competitive and adjust their rates properly, dynamic pricing works best when a real person provides a certain level of insight. A human can understand certain things about a given property that make it more (or less) unique than those around it and can make minor adjustments to prices depending on highly nuanced factors, like the actual aesthetic of a property and the current availability of amenities.
Hiring Versus Training
So you’re on board with making vacation rental revenue management a priority for your company. Do you outsource this work or train one of your employees (or maybe even yourself!) to work with pricing?
Like vacation rentals themselves, every vacation rental property manager is unique. So it depends on your situation. Here are a few questions you can ask to help determine whether it makes the most sense to outsource or not.
How many properties do I manage? If you’re managing under 150 properties and it’s within your budget, hiring a professional vacation rental revenue management company like Rented may cost you less than training and paying a full-time employee to do it.
How much time will this take away from other responsibilities? While pricing is part of a larger body of revenue management, it’s important to understand whether you or your staff can dive deep into dynamic pricing. It isn’t a side gig—dynamic pricing takes diligence and work, even with a revenue management tool doing the data crunching for you. If it’s going to cost you more time and money to handle pricing on your own, best to leave it to the professionals.
Is revenue management something one of my staff or I am interested in taking on? But you also know your people best. If you have a person on staff who has revenue management experience or is interested in learning more about it (and that includes you!), then it could be worth the investment. As long as you’re providing the tools they need to succeed and it isn’t getting in the way of your operational responsibilities, then by all means keep it in-house.
What to Look For in a Vacation Rental Revenue Manager
Here are a few key traits to look for in a successful vacation rental revenue manager, whether you’re hiring from within or outsourcing:
Data-oriented and creative-thinking. Revenue managers need to love the data, but they also have to think with the mind of a potential guest. Pick someone who is willing to ask some tough questions and investigate deeply.
Someone with operational and/or reservation experience. People with operations or reservation experience in the VRM space often have a certain insight into occupancy demands, market trends, and individual property quirks that help inform the dynamic pricing process.
Knowledge of the market. While a revenue management tool can give you a slew of data to work with, it doesn’t beat the first-hand experience of the market. A person familiar with the market will know all the tricks to keep occupancy high, even during the off-season. They may even have insights that can help inform your overall business strategy.
The right tool for the job. There are several vacation rental revenue management tools on the market today, and you want to make sure that whoever you hire has the right software to make their job easier and your prices more accurate. Here’s a breakdown of what to look for and a vacation rental revenue management tool.
Whether you decide to outsource your revenue management or handle it in-house, Rented’s revenue management services can make it easy to get the most accurate data available and make precise adjustments to your rates—all with careful vetting from real humans. Our team of Revenue Managers, are vacation rental experts with years of experience, talk with a revenue management expert now!