Getting your vacation rental’s pricing right is a difficult task. There are too many things to factor in before getting it right. The key is to find the sweet spot in the middle. You need to set prices that will grab the attention of your potential guests, cover your costs and make a profit. Using various pricing customizations, you must also consider customizing your pricing according to changing seasons, nearby events, competitors, length of stay, booking patterns, etc.
Note: We already apply all these factors by default. Opt for customizations ONLY if the recommendations are not in line with your expectations or if you have a specific strategy in mind that works for your market.
How to Use Pricelabs’ Customizations to Perfect your Pricing Strategy
A one size fits all approach will never work when devising pricing strategies. You have to evolve your strategy to fit the adapting market constantly with data-driven decisions to leverage various PriceLabs Customizations.
#1 Optimize for far-out bookings
Preparing for whatever might be in store for you in the future is important.
For example, in April 2020, it was seen that long-term stays were in demand. You would’ve been able to make money in this market if you had planned early on for this trend.
In an internal survey, we found that 75% of property managers and vacation rental owners have their calendars open six months in advance, and some have their calendars open three to six months in advance.
Future Prices and Occupancy
With Neighborhood data, you can analyze the future prices and occupancy for the following year. It will help you hold a magnifying glass on your standing in the market. With the Market Dashboard, you can choose the date range and compare your prices with the others in the market.
You can also understand your market’s future cancellation trends. With Portfolio Analytics, you can compare the various dashboards you have created to understand your vacation rental portfolio. You can understand which properties are performing or underperforming, evaluate your pricing decisions, and alter your strategies and customizations accordingly.
Minimum Stay for Far-Out Bookings
In our Market Dashboard, you can clearly understand your guests’ booking patterns using Length of Stay and Booking Window patterns. Understanding this is useful to fill up your calendar far out in advance. With this information, specify a minimum night and how far out you want this to apply.
For example, if a guest books your property three months in advance, they might book it for a minimum of 5 days. Specifying how long a guest should book your property will ensure that you are prepared for any situation in the future. One of the major benefits of applying this customization is that you can avoid any gaps that might occur due to smaller bookings in your calendar. These gaps might be difficult to fill later on. Rather than struggling, you can fill out your calendar the way you want with this customization.
Here you can specify the minimum night’s length and how far out the restriction should be applied. You can add up to 3 far-out booking rules here.
Minimum Far-Out Pricing
When you’re thinking too far ahead, you’re thinking without a crystal ball. It is possible for your pricing to go lower than the demand at that time. This customization ensures that prices for data beyond a particular data (that you set) do not fall below the price you set.
We gradually increase prices far out to ensure you get a fair share of the market.
NOTE: While our algorithm automatically applies this feature, you can customize it. You just have to contact us at firstname.lastname@example.org, and we will enable it for your account.
You can also turn this filter off and use Occupancy Based Adjustments to set custom far-out premiums.
Occupancy-Based Adjustments and Portfolio Occupancy-Based Adjustments
With Occupancy-Based Adjustments, you can set certain adjustments to your pricing based on the occupancy of your individual listings. With Portfolio Occupancy Based Adjustments, you can set certain price adjustments based on the average occupancy of groups of listings with different time windows in your portfolio.
For example, say in your portfolio, one listing has an occupancy of only 35%, but the market has an 80% occupancy, then a 25% discount could be applied to increase occupancy. At the same time, sometime later in the week, if your occupancy is higher, your prices will increase.
#2 Understand last-minute bookings
More often than not, most of the last-minute bookings that you get might be for shorter durations. In an interval survey, we found that only 30% of property managers and vacation rental owners optimize their stay restrictions according to lead time.
When you look at market data, you might see that many property managers are reducing their prices to get last-minute bookings. So should you join the race? Or wait and watch? There are cases where giving a hefty discount might help. In some cases, you might be offering a discount to a guest that might be willing to pay full price.
Here you need to understand two things:
1. How much demand is left in the market?
2. What percentage of the inventory is still available in the market?
You can use the competitor calendar to analyze how your competitors are pricing themselves in the market.
You also need to understand your guests’ booking patterns and plan accordingly. The Length of Stay by Stay Date graph shows the typical duration of bookings made for any given date on the selected dates – past and future (predictions). The graph below shows that long-term stays were famous for this particular property in May. The Length of Stay and Booking Window Trends graph analyses booking trends for future dates.
You can use Trends by Stay Date and Length of stay and Booking Window Trends in Portfolio Analytics to better understand your guests’ booking patterns and adjust your last-minute pricing strategies accordingly. In the Length of Stay and Booking Window Trends, you can analyze LoS and Booking Window trends for your whole portfolio. And you can analyse the occupancy for your whole portfolio as well here.
Last Minute Prices
By default, we apply a gradual 30% last-minute discount over the next 15 days from today, whenever today is for you. However, you have four options: Flat %, Gradual %, Fixed, and None. You can use this customization to optimize the prices you want to set for your last-minute bookings.
NOTE: The prices you set here will not go lower than the minimum price. If your discount goes below the minimum price, then the minimum price will be applied.
Minimum Stay for Last-Minute Bookings
While you understand the price you want to charge for last-minute bookings, you need to also look at the length of the bookings you want to allow for your property. Turning your property around for new guests takes a lot of work. You can set up three different rules depending on the booking patterns of your guests.
Orphan Day Prices
When there is a last-minute booking, there is a high chance that it will create an orphan booking. For example, say you got a booking for Friday and Saturday. Your property is already booked for the next week of the previous booking except for Sunday. Now, one day in the middle is left orphaned. An orphan booking is an unbookable gap in your calendar. You can apply a discount to incentivize this booking further. By default, we apply a 20% discount to gaps of two nights or less. However, we do leave control in your hands as well.
There are two options that you can choose from:
- % discount/premium
- Fixed discount/premium
Another cool feature is that you can differentiate your orphan day prices for weekdays and weekends. If you tick the box ‘Apply on the weekend,’ the customizations will apply for the weekend.
NOTE: If an Orphan day becomes a last-minute day and discounts are set, we will apply the more considerable discount of the two.
You had a birthday weekend booking, and the Monday after that, you have a business traveler book your property. You need to turn the property around in a very short period of time. Maybe you want to charge a premium to consider the workload. Or you have just rented your property for a discount (a huge one), and you want the one you got before this to be at a premium? Whatever your reason, you can use this customization to adjust the pricing of bookings right before and after you have a registered booking in your calendar.
Minimum Stay for Adjacent Day before/after a Booking
You might want to control how you get your bookings before and after a booking. Whatever your reason, you can use this customization to implement Length of Stay restrictions after and before a booking.
Minimum Stay Settings
You can set minimum stay settings to ensure you are protected even if an orphan gap happens. This way, guests will not be able to book your property for fewer nights than you are comfortable with, preventing unnecessary gaps.
You can choose a custom minimum-stay profile here or one of the minimum-stay profiles you already set. With minimum-stay profiles set, you need not replicate the same combinations of customizations repeatedly. Once you have a profile, save it and use it across the PriceLabs platform.
#3 Know your weekends, events, festivals, and high-demand seasons
Weekends, the period around events and festivals, are among the high-demand seasons. It has the most competition. While you can add custom rates for busy seasons, holidays, or special events in your locality, you can go the extra mile for your guests. You can offer unique amenities such as a special candlelight dinner during Valentine’s day for couples.
You can use our Neighborhood data and our Market Dashboard to understand the demand and market trends during the high-demand seasons. You can use our Market Dashboard to understand the amenities your guests are looking for and are being provided by your competitors. Understanding this can help you provide your guests with what they are looking for or maybe even go ahead during high-demand seasons.
Custom Seasonal Profile
Remember the minimum stay profiles we set earlier; they are helpful in more than one case.
So, you might be a person who constantly changes their base price. Good for you, you should! We recommend revisiting them every two or three months to ensure they are on par with the market trends. Or do you have multiple high-demand seasons? Creating multiple customizations each time the demand increases will be tedious. So, set up seasonal profiles and let the platform take care of the rest.
While you set up custom seasonal profiles, remember to turn off PriceLabs seasonality. You can contact our support team for help. This is to avoid seasonality by applying twice to your pricing.
When would you need this customization?
- Your high-end property is located in a heavily seasonal area
- You don’t have much flexibility in pricing
- You manage luxury properties that have a small comp-set
- You like having more control of your pricing
NOTE: Cover every date of the year from Jan 1 to Dec 31, as these seasons are not for a specific year. They will carry over from year to year.
Demand Factor and Seasonality
As and when there is an increase in demand, we apply automatic fluctuations to your pricing. Various factors impact our price recommendations. One of them is daily demand trends. These things change from one stay to another depending on the demand for a certain stay date. These fluctuations could be because of holidays, events, days of the week, etc.
Two other factors impact our price recommendations:
- Broad trends that change drastically from one stay date to the other such as base price, seasonality, etc.
- Lead-time-based trends change the price depending on how far out the booking date is. These can be minimum-night restrictions, last-minute restrictions, far-out premiums, etc., or other customizations.
We give the baton to you to fine-tune the variations you require at your prices according to market trends and your expertise for the big holidays, festivals, events, and/or special occasions. You can achieve this by using our dashboard’s demand factor aggressiveness feature.
Seasonality is the cyclical variance in demand throughout the year. This is unique to each market. For example, Miami experiences maximum footfall during winter. Mostly February to April might not have an overwhelming fill of tourists. Except during spring break, the city is filled with party people this time of the year. With historical data, we might be able to predict the cyclical variance in demand. This can help you plan in advance according to demand trends.
We, by default, consider Friday and Saturday as the weekend. However, there might be cultural and regional differences:
- Your property is a travel destination where the weekend is a little stretched!
- Or you’re in a location where the weekend is different from the western calendar, like in Jordan or Egypt(Friday and Saturday)
In both cases, you can set your own weekend.
Minimum Weekend pricing
Now that you’ve defined the weekend for your listings. It is also important to set the prices for your weekends. As demand increases, your prices should be competitive to bring you profit. This can be used to set a different minimum price for weekends. During low seasons, your minimum weekend pricing might also become last-minute pricing.
Day-of-Week Pricing Adjustments
Understanding how each day of the week performs would help in strategizing accordingly. While PriceLabs already accounts for the day-of-the-week trends, any adjustments made to this customization will be applied on top of our default settings.
- If you’re just starting with PriceLabs, this Getting Started Guide can be helpful.
- You can learn about our customizations in-depth here.
- There are various date-specific overrides that you can apply further to these customizations. This customization can help you specifically alter and control the prices.
- Customizations are applied in a hierarchy. You can learn more about that here.
- Sometimes, the price at PriceLabs might differ from what it is at your PMS; you can read more about it here.
- It is not necessary to use all the customizations provided here. You need to understand your market and listing before making pricing alterations. We are already dynamically pricing your property as per market standards. If you have any questions or queries on how to use our software, look into our knowledge base, attend our free training sessions, and get in touch with our support team at email@example.com
Static pricing is a fossil at this point in the revenue management journey. Setting up a dynamic pricing strategy that can constantly listen to the subtle conversations of the market to amp up your pricing is the need of the hour. Adapting your rates will boost you to be competitive and increase your profits.
Contact us if you have a question, story, or feedback. We love hearing from you.