Have you considered using a dynamic pricing tool for your short-term rental business? There are many benefits to using this software which add up to making your business more competitive.
Here are the benefits of using dynamic pricing software, such as Beyond Pricing, for your Airbnb, VRBO, and HomeAway business that you should know about.
Dynamic Pricing Will Increase Your Short-Term Revenue By 40% Or More
Beyond Pricing is a dynamic pricing solution that is designed to help short-term rental hosts ensure that their properties are always listed at competitive prices on short-term rental platforms, such as Airbnb, VRBO, and Homeaway.
Beyond Pricing automatically increases or decreases your asking price for your short-term rental based demand, special events in the area, and seasonality. It utilizes real-time market data to ensure that pricing recommendations are always maximizing revenue and occupancy.
As a real-world example of dynamic pricing, consider what happens when you try to book a hotel room. You might end up paying $200 or $500 for the exact same room. The pricing varies based on demand, seasonality, and other factors.
According to research from Beyond Pricing, dynamic pricing is proven to increase your short-term revenue by 40% or more. That means that if you are still relying on manual pricing updates for your bookings, you’re leaving a lot of money on the table.
The Right Pricing Will Increase Occupancy
Airlines and hotels already benefit from the practice of dynamic pricing and have been using it for years. Given that short-term rentals also experience periods of peak demand, it only makes sense that vacation rental managers use this tool to optimize their pricing as well.
Guests are very sensitive to pricing increases. As a result, raising the price of your rental even slightly too much could turn them off of your listing. Instead, dynamic pricing tools use algorithms that are so sophisticated, they can actually determine the maximum rates that the market will bear with a high level of accuracy. This ensures that the price listed is a price that a guest will be willing to pay at all times, thus increasing your occupancy rate.
In many of the most popular destinations for Airbnb guests, price is one of the few differentiating factors when it comes to choosing a listing to book. If you’ve already taken all of the other steps possible to make your listing stand out, such as taking professional photos, staging your property, and offering ample guest amenities, dynamic pricing is the final tool that you need to reach and maintain Superhost status.
Know Your Average Pricing For Peak Events & Slow Times
Using a dynamic pricing tool will also help you to get a better handle on your business. When you can review historical pricing data for your listings and compare it to you when you received the most and the least bookings, you’ll be able to identify the average pricing for peak and slow times.
As a result, you’ll be able to calculate the average maximum amount you’ll be able to earn from a listing during a peak period. On the other hand, knowing how much your revenue is expected to decline during a slow time because you have to lower your pricing will, in turn, help you to figure out what adjustments you need to make to your business to still meet your monthly profit goals.
With an increase in profit, there always comes tax implications. To find out what the implications mean and how to reduce that tax bill, reach out to a tax advisor and find out how to save money by paying less on taxes.