Seasonal pricing is nothing new in the vacation rental industry, but it has arguably never been more important than it is today. Many travelers say that price is the most important factor when it comes to booking. It is a good strategy to periodically review how your different rates and fees are displayed in order to remain competitive and maximize your revenue.
Keeping the same prices year-round may make your life easier, but you’ll quickly discover that your occupancy or revenue probably won’t perform as well as you’d like. Setting seasonally specific rates will likely increase both your overall occupancy and your rental income, allowing you to earn more. Although this is a skill in itself.
Now is the perfect time to review your short-term rental rates, and set competitive seasonal rates to attract seasonal travelers.
What are seasonal rates?
Seasonal pricing is pricing that increases or decreases based on the demand for a particular “season”. They give you the flexibility to offer different prices for specific time periods, weekends, vacations or specific events.
For example, you can increase prices for more popular times, such as summer or special local events. And similarly, lowering off-season prices will encourage guests to book for quieter periods.
How to set the right rate
For a property manager, knowing how much to charge can be tricky. Setting the right price for your accomodation is a vital part of running a vacation rental business.
◆ A good place to start is to determine the appropriate rental seasons for your accommodation. Most vacation rental markets have at least three seasons:
– Peak season: when demand is highest
– Shoulder season: the periods immediately preceding and following the high season.
– Low season: when demand is lower
However, some have as many as six or seven distinct seasons. Don’t forget that each market is unique, and you will also have additional periods that require season-specific pricing.
◆ Research prices in your area to get a clear picture of your neighborhood’s rental market. Your competitors should actually be one of the most important point of reference to determine what prices you should be charging
◆ Set your minimum and maximum rates.
By being smart with your pricing you can optimize both your occupancy and your revenue. Depending on your market, travelers could be booking several months to even a year in advance of their travel date, so it’s important to have your rates set up at least 6-12 months in advance. Nevertheless, the vacation rental market demand is changing constantly. You should always optimize your rates as your market changes.
Why should I set seasonal rates?
◆ The flexibility to offer the most profitable rates for specific periods of time
◆ Setting seasonal rates is a simple yet powerful way for you to earn more
◆ Analyzing and estimating the expenses of your business can help you understand better how to manage your property and optimize the costs.
◆ Monitor your competitors and keep their offer under control
More accuracy with Hostify
Prices have been changing for years to adapt to demand, and in recent years online travel agencies and sales channels such as Airbnb, Booking, Vrbo, have entered the game to change everything. Now, even specific platforms or apps that work with dynamic pricing such as Beyond or Pricelabs are increasingly used.
Dynamic pricing, in the vacation rental sector can be a game changer. These softwares are revenue management solutions for vacation and short-term rentals that help hosts set and adjust the prices of their properties dynamically and intelligently. They use a data-driven approach to analyze your website and other factors such as competition, location or occupancy to help you increase your revenue and save time when setting prices.
Using a property management system like Hostify means you can integrate directly with dynamic pricing tools to set your prices and apply them to your listings across multiple channels at once – giving you a powerful way to optimize your listings while keeping things simple!