April 28, 2022
Revenue Management & Dyanmic Pricing
Part 5: Revenue Management & Dynamic Pricing Software for Vacation Rental Managers
Welcome to Part Four of the Ultimate Guide to Revenue Management. You can download the full guide here.
Revenue management and dynamic pricing is the scientific and proven method of dynamically managing prices and occupancy of vacation rental inventory to maximize revenue even when demand is uncertain. And is best implemented with SaaS platforms that produce improved results.
Key Features in Dynamic Pricing Software
While there are variations with different software providers, generally the key features that are offered include:
How Does Dynamic Pricing Software Work?
Demand is extremely volatile – it can plummet or skyrocket unexpectedly at any given time. Given this landscape, software that is able to understand demand, and respond to the market fluctuations anticipates, and adjusts for the demand and the amount of inventory available in your comp set.
Demand is Dynamic. Your Pricing Should Be Dynamic Too.
The software is making price adjustments automatically and is generated by algorithms that leverage machine learning to understand fluctuations in supply and demand. The input provided by the listing, including comp details, amenities, and sensitivity contributes to the algorithm to provide very specific adjustments based on the data.
Connectivity & Integration
Revenue management tools should integrate with your Property Management Software (PMS) so that your rate data is populated to your website, and to your OTA channels where managers publish listings.
Understanding the market metrics when comparing to your listings is a key way to ensure that you are pacing correcting, driving the best occupancy and booking metrics such as RevPAR are maximized to benefit you, as the manager, and the homeowner.
The Defining Difference in Vacation Rental Revenue Management Software
Software should be developed to provide the user with a clean interface, a low learning curve, and provide a tool that produces measurable benefits.
Dynamic pricing software for vacation rental managers is in the early stage. The tools available for the industry will only continue to improve and deliver increased benefits to the users. Adopting and implementing a revenue management strategy should be a significant part of the owner and guest acquisition methodology.
This article is the introduction to Rented’s Ultimate Guide to Revenue Management for Vacation Rentals – 2022 Edition. You can download the full guide here.