April 20, 2022
How to Explain Revenue Management to Vacation Rental Homeowners
Your job as a vacation rental property manager is to help your homeowners get the most out of their short-term rental. From upkeep to guest satisfaction to revenue, they rely on your expertise to make their investment worth it.
But something funny can happen when it comes to talking about money. Some homeowners can have strong opinions about the kinds of rates they want to set for their property. Or they might believe in using other restrictive practices, like minimum stays, to ensure a certain return.
So it’s also your job as a vacation rental expert to explain how dynamic pricing is not only the way of the future but also the best way for owners to optimize their earnings. Next time you sit down to talk about your pricing strategy, consider sharing these four benefits of revenue management.
Dynamic Pricing Keeps them Competitive
Dynamic pricing is the practice of regularly adjusting rates based on market factors such as demand, seasonality, availability, and overall property appeal to get a rental in front of the right guest at the right time—for the right price. Unlike fixed pricing, which sets a rate for indefinite periods of time, dynamic pricing keeps rates flexible. This expands the visibility of a property, offering more chances for filling up the calendar and, therefore, earning a higher return.
Revenue Management is Informed by Data
The best dynamic pricing tools are built on a foundation of data science. And not just historical data. Revenue management algorithms like Rented’s Automated Rates Tool (or Art for short) can build demand-based models based on forward-looking data, creating a road map to help property managers make the best decisions for each property.
Getting your homeowners on board with your vacation rental revenue management strategy is vital to success. Showing homeowners the data that you’ve collected and the projections you’ve made can help them better understand the overall plan for their property and how dynamic pricing can help them earn more in the long term.
Revenue Management is Customizable
One of the best things about revenue management is that it can be carefully tailored to earn the highest net profit possible on the property. The best revenue management tools can accommodate minimum and maximum rates to make sure that the short-term rental is always pulling in revenue, as well as adjustments on the fly based on last-minute factors like weather. Tools like Rented’s Art can also do rolling adjustments or adjustments that occur over a set period of time indefinitely, making less work for you and your property management team and pushing the property in front of a more spontaneous audience.
Dynamic Pricing Helps them Earn More
The more bookings a vacation rental property gets, the more profit the homeowners earn. Dynamic pricing encourages more bookings by more people because as the rates adjust, the listing receives more visibility on the OTAs, and can also encourage repeat or direct bookers to visit your site and check pricing. The revenue management experts at Rented, in tandem with the Art software, can help you finesse your rates. In fact, property managers who work with Art and a Rented team member can see a 25% increase in net rental revenues. That’s a huge boost!
Get your homeowners onboard with your revenue management strategy now—speak with one of our revenue management experts to improve your homeowners’ (and your company’s) profit now.
What is dynamic pricing?
Dynamic pricing takes various factors into account, big and small, and adjusts prices accordingly to be the most attractive to the consumer.
What is the definition of revenue management?
A strategy that uses data to predict consumer behavior to optimize product availability and price for maximum revenue growth.
What is revenue management for vacation rentals?
Proactively maximize your revenue by ensuring a vacation rental property is listed for the right price, in the right place, in the right way, and at the right time for the right customer.