Automatic, data-driven pricing updates ensure you’re listing your accommodation at the best price at any given time – especially now – during the COVID-19 pandemic. Price management is a daunting task.
Many accommodation providers are in fear of their own existence due to a large number of canceled reservations. However, the question is how long this “frozen” market situation will last. What is certain is the fact that humans need to travel won’t stop. In order for you to adjust asap, we have released a trend tracker that helps you monitor the hospitality industry recovery based on live data.
For large hotel chains, price management usually involves an entire department of revenue management experts sweating over the latest consumer reports and market trends to pinpoint that sweet spot for their prices. But what about small vacation rentals, hostels and boutique hotels who are struggling to afford cleaning staff, let alone an army of pricing experts? Naturally, they weren’t able to keep up with them up until now.
Here’s what Rentlio’s newly forged partnership with PriceLabs, a data-driven pricing tool, means for you.
The Booking Game Has Changed, and You Need to Keep Up
The recipe for success of every service industry, despite all modern technologies, remains the same; attract, serve , and satisfy the end customer.
Before completing the reservation, a potential guest will take into account a whole range of information about the property that caught his or her eye. Price is, of course, an inevitable factor.
Besides, popular meta-search engines such as Trivago or Google Hotel Ads will help the same guest book their desired place to stay at the cheapest rate, all in just a few clicks.
To make matters worse for vacation rental owners, the new generation of travelers is also becoming increasingly flexible — they want to be able to cancel their booking up until the last possible moment.
This, in turn, prompts the competition to offer lenient cancellation policies, with guests allowed to cancel their reservation for free often a few days before the arrival.
It is no wonder then that those properties whose rates aren’t updated regularly (and whose policies don’t meet the market demands) end up vacant.
Lowering the Price When Times are Rough
An ounce of prevention is worth a pound of cure, especially when you’re dealing with price management.
Instead of tweaking the price when you start noticing your occupancy going down, you should take preemptive action to predict the rate at which your property is likely to sell in a certain time period.
Easier said than done, we know. You are likely juggling multiple tasks to manage your property, from hiring a cleaning service to easing your guests’ concerns about their parking space.
Working out the ideal fixed rate is probably at the bottom of your to-do list, provided it’s there at all.
A whole lot of effort goes into this reckoning. Calculating your base price, determining the profit margin, doing market research and defining the optimal price for each month is time-consuming.
Throw the long-stay and short-stay variations as well as special events (music festival, marathons, or sporting events) to the mix and you’ll see how you could easily hire a person or two to deal with this job year-round.
So, we don’t blame you for waiting for a trigger to change things up. We understand just how much work goes into manual price-per-night optimization.
The Guest Dictates Your Price-Per-Night
Understanding it is your customer, not you, who is commanding the price is the first step towards successful price-per-night optimization.
Let’s remind ourselves of the world-famous Ultra Music Festival, a global event that drew in more than 150,000 ravers to the coastal city of Split, Croatia in its second year.
If Ultra has shown us anything beyond the region’s acquisitive spirit (some accommodation providers have tried quadrupling their nightly rates to squeeze the most out of the situation), it’s that sooner or later, the market will balance itself.
Sure, rental owners have been getting away with their near-criminal price increases at a time Spit could finger-count its available properties. Still, once new renters have entered the game to get a piece of the action, everything went south quickly.
Perplexed and frustrated, renters who sold ramshackle apartments at 400 Euro per night in 2014 couldn’t understand why they were struggling to rent their ”beach houses” at the same rate in 2017.
Once they got burned, they finally understood why their exorbitant prices drew no attention anymore. They finally decided to take their competition seriously and adapt to the market — what a nightmare!
So they substantially cut their prices, and with that, their losses.
Had they predicted the rise in supply sooner, they could’ve set competitive rates, and fill the same rooms without dumping the price at all.
If you glance over the listings on the popular Online Travel Agencies (OTA) today, you’ll find a range of modern, fairly-situated properties selling at 80 Euros per night at the time Ultra is expected to be held.
This means the price-per-night in the Ultra week has fallen five times, although the number of festival-goers has doubled in its seven years of running.
The key takeaway here is that negligence of market trends, and price adjustment can seriously damage your business, if not cause you to go out of it.
Rentlio + PriceLabs = The Best Price for You and Your Guests
Using Rentlio means managing your property more easily, be it running your day-to-day operations or adjusting your upcoming availability and policies.
But this is nothing new.
The real game-changer we have introduced revolves around the very topic we’re discussing today — price management.
So far, you could manually set the price in Rentlio for any of your properties based on your observations and predictions. That’s pretty sweet, and it has saved managers a ton of time, but we thought of a way to make it even better!
By joining forces with PriceLabs, US revenue management software for vacation rentals, we have made it easier for our users to tailor their pricing strategy and optimize their rates for any given period.
How does it work? Essentially, the smart algorithms at PriceLabs never rest to ensure you’re not leaving any money on the table.
They continually analyze your neighboring supply and demand in real-time, automatically updating your prices as the market trends change.
The system also takes a deep-dive into the past market trends, analyzing four years of local booking data to make forecasts about the future.
This data-driven pricing calculation is based on a range of factors, including:
- Location and type of accommodation
- Seasonality (high or low season)
- Historical trends
- Day of the week trends applicable to your neighborhood
- Holiday & event demand nearby
- Urgency (time interval from today until check-in day)
Monitoring these values and doing the math yourself would take months, even if you’re exceptionally good at crunching numbers.
To get started, sync your Rentlio account with your Pricelabs account following the steps below. Not using Rentlio yet? No sweat – start your free trial today and try us out!
The Price is Always Set the Way You Want it, Never Too Low
Will Rentlio make sure my price is never lower than a certain limit?
We’re not in the business of making commissions on guest bookings. That also means we won’t tinker with your prices.
When you use Rentlio (and by extension, PriceLabs), you are always on top of your price management policies.
Don’t want your price to drop below a certain rate? Simply define the minimum price below which you’re not willing to go. You can do this for any time of year or even type of day (specific limits for Fridays and Saturdays, for example).
Last Minute Discounts, Designed to Sell When it’s Urgent
Two types of last-minute discounts are available:
- Fixed discount – If your guest is arriving in 14 days, he or she will be able to take advantage of the discount you set within those 14 days, whether it’s on the first or last day.
- Gradual discount – If your guest is arriving within seven days and you’ve set a gradual discount of 35%, the sooner the guest books his reservation, the lower the discount.
Orphan Days, Adopted
Orphan days or the days in between your reservations are usually more difficult to sell because of their limitations. PriceLabs has a neat feature that will help you fill those days with more bookings by automatically identifying orphan days and offering a discount to potential guests.
As soon as there’s a gap in your calendar, PriceLabs will mark it and set a discount you have predefined.
Adjust Prices for Specific Days of the Week
Dynamic pricing algorithms recommend the best price for each day of the week.
However, if you want to set a decrease or increase on a specific day in addition to the recommended price, you can do so by entering a percentage value in the box.
An example above shows that a price increase of 20% above the recommended PriceLabs price will apply on Fridays and Saturdays.
Increasing the price per night on weekdays can be beneficial to real estate companies that have high occupancy on weekdays due to frequent visits by business travelers.
Make the Most of Your Min Stay Restrictions
- Minimum stay for last-minute bookings – Setting a minimum stay limit of one night for all days within the next seven days greatly increases your last-minute booking chances.
- Minimum stay for far-out bookings – To fill your calendar with long-stay reservations, you can specify a minimum stay that will apply from a specific day in the future. For example, set a minimum of 4 nights for periods beyond 180 days into the future.
- Minimum stay for gaps between bookings – For any unsold gap between bookings, which can be from 1 to 4 days long, Pricelabs will level the minimum stay limit with the number of unsold orphan days. If you have set a minimum stay of 3 days, and the gap between reservations has two unsold days, PriceLabs will automatically reduce the minimum stay to two days and allow for filler reservation.
Start Growing Your Revenue with Optimized Pricing
Perhaps the greatest benefit of our new integration with PriceLabs brings forward is the ease of mind.
And as you know, Rentlio is all about making property management less stressful, be it in the peak of your season or during the quiet days.
By blending these two automation tools, you can rest easy knowing your property rates are automatically updated every day per the current state of your market.
Not only will data-driven dynamic pricing save you the nail-biting ordeal of manually adjusting your prices based on gut feelings and inaccurate Excel spreadsheets, it will also help you maximize the revenue potential each of your properties holds.
If you’re a Rentlio user, you’re welcome to try PriceLabs free for a month to see how dynamic pricing affects your sales and overall efficiency.