September 2, 2022
3 Dynamic Pricing Takeaways for Vacation Rental Experts from DARM 2022
Data and revenue management have never been more important to the vacation rental industry. That’s why, every year, experts from across the country get together to discuss the latest trends to maximize profitability and occupancy at the Vacation Rental Data and Revenue Management Conference (or DARM for short).
There’s lots to learn. The conference hosts over 40 educational sessions that include discussions in revenue management—both foundational and advanced—technology and data, and of course, lots of talk about dynamic pricing strategies.
Dynamic pricing is the idea that you can use data and your knowledge of a market to adjust your rates regularly, putting your listings in front of the right guest at the right time for the right price. It’s a strategy that’s gained popularity over the years and is now standard practice for vacation rental managers. Here are a few interesting tidbits we picked up during our time at DARM.
Use Data to Guide Last-Minute Discounts
The vacation rental industry has a love-hate relationship with “discounts.” For some, discounts are a tool reserved for appeasing unhappy guests. But often, vacation rental managers avoid discounts for fear of opening the door for guests to take advantage of them.
These kinds of discounts are reactive. However, if you can make them proactive by strategically offering discounts based on specific factors, they can come in handy. Use your data to determine where and when deals would be most beneficial to your business. While every short-term rental company is different, here are a few common ways you can offer discounts.
- For returning guests. Offering a discount to repeat guests encourages customer loyalty. For example, you can market this as a loyalty program where guests earn “points” per stay, eventually saving up enough points to earn an extra night free or credit off their next visit.
- As a reward for referrals. Discounts also work well as a reward for guests who are organically building your customer base.
- For last-minute travelers. If a booking window is closing and you’re looking to increase your occupancy, offering a price cut to more spontaneous travelers could make sense.
- To encourage an extended stay. On the other side, you can also increase your occupancy and revenue by encouraging guests to stay longer. These kinds of discounts also help encourage guests to book days that may have lower rates.
Align Minimum Stays to Your Specific Market
Generally, minimum stays are often considered detrimental to a dynamic pricing strategy. If used incorrectly or excessively, minimum stays might limit the audience your property will appeal to, impact your search rankings on OTA sites like Airbnb, and undermine your revenue strategy.
That doesn’t mean minimum stays can’t be helpful. When aligned with your market’s peak season, most booked days, and popular regional events, minimum stays can help fill out your calendar and keep your occupancy rates high. It also helps earn revenue over days that are less popular to book.
For example, markets in the southeastern region of the U.S. like Florida will flourish under high minimum stays during the spring and summer because renters tend to book longer stays. A fully booked week means that your less popular days, like Tuesdays, are covered. However, once shoulder season hits, you may need to adjust your minimum stays to attract guests who may stay for shorter periods over different days.
Partner With a Revenue Management Expert
Working alongside a vacation rental revenue management expert is the best way to ensure your price adjustments work for you. Rented’s Art system offers helpful insights into your market and properties so you can change your rates and your minimum stay requirements in a way that works best for your business goals. And with Art’s batch tool, updates are quick and easy! Ask for a demo today and learn more about how to put these takeaways from DARM into action>>