Seasonality is a crucial aspect of the rental market that property owners, property managers, and revenue managers cannot ignore. For instance, seasonal vacation rentals in beach towns tend to be in high demand during the summer months, while ski chalets experience their peak season during winter.
Action points
- Seasons are like weather seasons. They occur during the same time period every year, but there might be slight delays or urgency.
- You can use Portfolio Analytics, Market Dashboard, and Neighborhood Data to analyze your market and listing season.
- It is important to update prices according to season to optimize occupancy and increase revenue.
- Custom Seasonal Profiles can help you set up seasonality in your pricing
- You can use Custom Seasonal Profiles to dynamically adapt different Minimum Stay settings for different seasons.
- Bulk settings are easy with ‘upload CSV’ and Account/Group level features
How to understand seasons and define them for your rental portfolio?
Seasons highly depend on the location of seasonal vacation rentals. However, they can be loosely defined as those sections of the year when your property’s demand fluctuates year-on-year.
Seasons can be
- Climatic conditions of your locality – summer, winter, spring, autumn, and rainy seasons.
- Demand fluctuations in your locality
For instance, you may picture a ski town with a winter peak and low during other climates. However, some of the ski towns have successfully capitalized on year-round demand. It is essential to know how your market is performing that year and how your property is performing compared to the market. Consider setting different prices during annual events or festivals in your locality.
Should you look at past data or future data to understand seasonality?
Let’s combine both. Past data will tell you how your market and property have been performing. With this, you can confirm how your property has been performing for a particular period of time. Do you want to check how Christmas might work for you? You can check how it performed last year. This data is proven; you know this is a fact and will repeat if the performance is not linked to a one-off event.
However, future data is inconclusive. Say, you are checking how Christmas of 2023 is going to perform. The problem with this data is that there is a solid 9-month booking window. The chart might not show much fluctuation for you to decide on your seasonality.
You can combine this with past data to understand the action you should take for that period. PriceLabs’ Market Dashboard and Neighborhood Data will help you to gain valuable insights into the market and property pricing. You can use this data to support your strategies and demonstrate the performance of your properties.
Pricelabs Portfolio Analytics includes a real-time reporting system that tracks your property’s important financial metrics, providing quick insights into its performance. With deeper analysis at the listing level, you can use our data to make informed decisions when setting your pricing strategy.
Why should you update your prices according to season?
An obvious answer to this question is revenue optimization – increase revenue and/or increase occupancy. Let’s dissect this:
Base Price Help is a neat tool recommending the base price you should set for your listing. But it goes deeper than that. It also shows you price projections for that year with that Base Price.
Note: This represents the Base Price Help feature of PriceLabs to help deliver the context presented below.
The above screenshot shows that the market Base Price is € 132. With seasonality applied, your prices can go as high as € 196.
If you notice the top right box, you can see a recommendation of a -11% drop in your base price. This is shown because this listing’s historical occupancy is low. Since occupancy is low, the algorithm is recommending a reduction in prices.
However, this dip in occupancy might not be a normal phenomenon. It might be a seasonal effect. Hence, it is recommended to make a base price change in custom seasonal profiles.
While setting your Base Price, look at the Market Based or Recommended sections to understand the price you need to set. You can either choose our recommendation or set a manual base price.
(More on Custom Seasonal Profiles below)
The Vermont A-Frame increased its occupancy to 85% using Custom Seasonal Profiles in a highly seasonal vacation rental market.
As a property manager, Becca managed an extensive portfolio. She segregated her year into 14+ custom seasonal profiles to optimize prices and witnessed a 50% increase in the ADR of her clients’ seasonal vacation rentals.
How to adapt prices according to each season?
PriceLabs, by default, applies seasonality to your pricing. You can check that in the pricing tooltip:
Under Market Factors, you can find Seasonality, Demand Factor, and Pacing Factor.
You can either let the default settings work their magic on your pricing or take things into your hand and add your customizations in Custom Seasonal Profile and other settings in PriceLabs.
You can learn more about setting it up here – Seasonal Minimum, Base, and Max Price Settings
Use cases for Custom Seasonal Profiles
- The year has been going well, but September shows a different projection. You might not want to change your base settings here because it is just a one-month performance. A Custom Seasonal Profile can help here.
- You see that the snowbird season is starting in a few weeks, and you want to change your minimum stay settings with a specific change to your pricing. Create a Custom Seasonal Profile with specific Minimum Stay Profiles for that time period.
- Your property has a rigid pricing strategy. You know precisely what you want and how you want it to be. You can use Custom Seasonal Profile to create as many profiles as you want to take control of your pricing.
Best Practices for Setting up Custom Seasonal Profiles
- When you have a lot of listings, you may have created groups for them. You can create Custom Seasonal Profiles at three levels: Account, Group, and Listing.
- One thing to remember when you make changes at the group or account level is to set Custom Seasonal Profile as a percentage rather than a fixed number. This is because each listing might have a different Base Price, Minimum Price, and Maximum Price, and a fixed Custom Seasonal Profile might complicate things.
- Try to apply flexible Custom Seasonal Profiles in your low-demand seasons and stricter Custom Seasonal Profiles during high-demand seasons. For example, in a few markets, when it is the low season, you might want to get month-long bookings, and in the high season, look at driving revenue through shorter stays. In this case, you can apply a Custom Seasonal Profile with a flexible minimum stay profile.
- Do not touch Base Price at all unless it becomes absolutely necessary. You can use Custom Seasonal Profiles to adjust your minimum price seasonally. We do not recommend adjusting your Base Price.
- If you have multiple listings and need advanced Custom Seasonal Profiles, you can set them here, download them, make changes, and then upload them to PriceLabs.
Using PriceLabs to understand your market’s seasonality
PriceLabs automatically calculates and identifies seasonality for your seasonal vacation rentals market. We also dynamically price your property to match your property’s seasonality. However, you want to understand what seasonality is for you and plan accordingly. You can also do that using PriceLabs.
You can look at the following charts on the PriceLabs Market Dashboard to understand your market’s past performance:
You can create a comp-set and analyze the performance of your competitor listings. Select and customize the listings you want in this comp set. Give it a name, click ‘Generate Comp set”, and you’re ready.
Now, you can use your comp sets or any of our pre-loaded comp sets to filter the data shown in the rest of the dashboard.
You can use the multiple month-on-month graphs available to track the performance of your competitor’s listings in that seasonal vacation rental market.
You can cross-check this data with your listing’s performance data using Portfolio Analytics.
You can also use Neighborhood Data and cross-check with the Comp Set created in the Market Dashboard.
You’ve gone through all of these charts but want a macro look at how your 2-bedroom listing in Kansas is performing? Let’s look at what you can do here.
Go into Review Prices. And into your calendar. Go into each month and see how your prices are working for you. Are April prices supposed to be higher? Change your customizations accordingly. (More on this below, keep reading)
Note: The black on the calendar is Date-Specific Overrides.
How do PriceLabs price recommendations work?
We scrape data from Airbnb and Vrbo every 2 days from existing listings in these Channels and every 15 days for new listings.
You can read our full article on how we recommend prices and in which order our customizations are applied here – How are the price recommendations calculated?
We update your pricing based on the above factors every 24 hours, and the updated price is pushed to your PMS every 24 hours. You can read about this in detail here: How often are my rates synced to my PMS, and how does “Sync Now” work
Conclusion
Understanding seasonality and implementing dynamic pricing strategies accordingly can help property managers maximize revenue and occupancy rates throughout the year. PriceLabs can help you understand and analyze seasonality in your market and listing.
Features that can help you understand seasons:
- Neighborhood Data
- Base Price Help
- Portfolio Analytics
- Market Dashboard
- Pricing tooltip
- Review Prices Calendar
How can you use Custom Seasonal Profiles?
- Adapt Minimum Stay Settings for different seasons
- Control pricing for one or two low months in a year
- Adapt pricing for a highly seasonal market
- Make changes for bulk listings using CSV sheets.
- Update these settings for bulk listings in the account/group/listing level
