When it comes to a revenue management strategy for your short-term rental business, we can all agree that pricing is the most important part. With so many options to help your pricing strategy, it can be difficult to decide which tool is right for you. The two most common are pricing tools within online travel agency (OTA) platforms, like Airbnb & VRBO, and dynamic pricing platforms.
A recent report from Transparent and Rentals United that surveyed property managers from around the globe found that almost 50% of property managers have adopted a dynamic pricing technology solution. Seeing how popular the dynamic pricing solutions are with property managers, is this the right pricing tool for you? How is a dynamic pricing solution different from an OTA pricing solution? Let’s take a look at each.
OTA Pricing Solutions, like Airbnb Smart Pricing & VRBO MarketMaker
Airbnb, VRBO, Booking.com, and most other major OTAs offer pricing help to hosts right on their platform. These pricing solutions usually take into account factors like daily trends, events in your area, seasonal shifts, and average rates of similar properties. Most of these pricing solutions promise to keep your rates competitive and keep you in control of your prices.
- Easy to use
- No integration or third-party necessary
- Can be a great way to get started on optimizing your pricing strategy
- Can easily be turned on or off
- Most OTAs only use data from one source (their own booking website), which means they do not have a complete view of pricing in the market
- Limited pricing strategy customizations
- Some hosts and property managers say that it doesn’t recognize every event in your area
- OTAs are thought to prioritize bookings (which increases the fees that hosts pay to them) over host revenue.
Dynamic pricing from Beyond is based on an algorithm that automatically positions your properties to be booked at the best price at the right time in your market. While there are thousands of factors that can be used to determine demand on any given day, we’ve identified the top three that have consistently proven to correctly gauge demand and local travel patterns:
- Local Demand
- Day of Week
Our algorithm is made up of several strains of complex logic and takes into account thousands of points to arrive at the correct price for each listing. Dynamic pricing takes away any guesswork when it comes to pricing each listing, and it removes the need for hours of research into competitor listings, events, and the many other factors that affect pricing.
Below, you can see an example of the different types of factors that go into pricing a listing. Starting with the base price, factors like seasonality, events, and day of the week (DOW), etc. provide the right price for this listing.
Why Dynamic Pricing is Better
- Easily manage portfolios at scale: Whether you're managing a single listing or thousands, we've made it easy to identify trends or issues and take action. With grid views and bulk actions, it's simple to update all prices and discounts at once, right on the dashboard. You can even set the Base Price or copy Last-Minute Discounts from one listing and apply that change to any of your other listings.
- Frees up your time: Instead of spending hours researching competitors and manually updating prices, dynamic pricing works in the background so you can focus on other parts of your business.
- Get the entire picture: Thousands of data points go into our algorithm to determine the correct, unique price for your rentals.
- Instantly know how you compare to the market: Beyond provides years of historical data to help you understand and identify market trends in time to take action. That means you won't leave money on the table and you'll be prepared for any future swings in demand.
- Complete control: With dynamic pricing, you remain in complete control of pricing each listing. With our help and expertise, you set the base price, minimum price, and maximum price. Our algorithm will fluctuate up or down from the base price, but will never go below the minimum price or above the maximum price.
Ready to get started with dynamic pricing? Request a demo for more information or sign up for an account.