Dynamic pricing for vacation rentals is one of the first tech solutions property managers and hosts make in order to automate revenue management. However, all solutions are not created equal, and there are additional components you should consider to get the most value out of your technology investments for your vacation rental.
For example, setting prices shouldn’t be done in a vacuum. The market changes with supply and demand variations daily. Understanding and acting on the insights from your portfolio and competitive market data is key to setting the right price. Investing in the right technology solutions makes all this possible – all while maximizing efficiency and growing your revenue.
Enabling dynamic pricing comes with a lot of questions, so it’s important to pick a provider whose interests are aligned with yours and have the right support available when you need it. Here are 10 red flags to avoid when considering your dynamic pricing provider:
1. Flat fees & hidden costs
While a flat fee per listing model may sound tempting, it provides no incentive for the provider to do consistent, quality work that improves your revenue. What’s more, you may find those fees adding up to more than you bargained for due to unexpected “gotchas” like a minimum monthly payment requirement and/or paying for each and every market data report.
With a revenue share pricing model, where your solution provider charges a percentage of bookings, the vendor only makes money when you make money - so they’re invested in your success.
2. One-size-fits-all approach
Any revenue management tool can come up with a price, but is it the right one? Look for a provider with local market experts that sense-check the pricing, ensuring that it catches the important events and trends that make you more money.
At Beyond, we hand-launch every region with our full-time, globally-based revenue management team. Our team is intimately familiar with the wide variety of markets around the world, whether they are urban areas, popular destinations, beach towns, fly-to markets, and more – even the vast Amazon region! Because of the level of data we collect and analyze before launching a region, our algorithm is more accurate than others that provide a one-size-fits-all approach to pricing.
3. Reliance on too many manual controls
While it’s important to have some customizations available to account for edge cases, be wary of any provider that relies on lots of manual inputs. Not only does this practice not scale past a handful of listings, but it is also a sign that the provider is likely overcompensating for a bad pricing algorithm that doesnt automatically catch trends and adjust rates for you.
Dynamic pricing should save you time, not add more to your to-do list.
4. Listings not certified before go-live
Enabling pricing is a big leap for property managers with many listings. You want the assurance that a pricing expert is reviewing your listings and certifying they are properly integrated and priced to avoid costly mistakes. Look for a provider that offers hands-on onboarding and listing certification prior to go-live.
5. Vague or limited support
It seems like a new issue can arise every other day – whether from owners, guests, or your own team. When you have questions about strategy or want to onboard a new property, you want answers from experts. Be wary of providers that don’t offer direct access to a support team. The last thing you want is to be stuck in an endless loop with a chatbot when you need answers now to fix an issue that is costing you money.
6. Lack of ongoing enablement and education
After onboarding is complete, you shouldn’t be left in the dark. Look for a provider with hands-on enablement and product training to help enable new employees, as well as keep existing team members up-to-date on the latest features.
7. Limited integrations
Your first priority should be to check whether or not the provider supports your current PMS, but also pay attention to the depth and breadth of their integrations as a whole. You don’t want to be locked into one technology stack as your business grows. Find a provider that can help you transition to a new PMS, or incorporate new additions to your tech stack, should your strategy ever change.
8. Relying too heavily on a single data source
Many providers will claim to have the best data sets but might be building a one-sided picture by relying on only one type of data, i.e. only scraped data or only historical booking data. Find a provider that uses both to build a comprehensive view of the market. Additionally, new data sources are always becoming available, ask your provider what other data sets they’re considering incorporating to give you more leading indicators about where the market is heading.
9. Caters only to small property managers
Don’t be afraid to ask a provider how many listings their average customer maintains. If they don’t support a large segment of property managers with many listings, it may be cause for concern because they may lack the sophistication needed to support unique listings or larger porfolios. Even if you are small today, you want someone who can scale and grow with you now and in the future. Find a provider that uses both to build a comprehensive view of the market.
Beyond is the #1 revenue management platform for short-term rental managers and owners to unlock new ways to make money with their vacation rentals. Our suite of tools has helped our partners see as much as a 40% increase in booking revenue. To date, we’ve supported over 350,000 properties in more than 15,000 locations worldwide.
We pioneered pricing for the short-term rental market, and that was just the beginning. Want to see what Beyond can do for you? Reach out to us anytime!