Bring More Money into Your Short-term Rental Business with right revenue management strategy
Short-term rental pricing is crucial to property management. As a property manager, managing multiple doors across locations is no cake walk when it comes to setting rental pricing. Lower rates means higher occupancy but high nighty rates typically results to higher profitability. The real challenge is to have competitive pricing that also meets your revenue goals. The struggle does not end here. There are numerous factors that affects the optimal rate of your property. Be it length of the stay, seasonality, holiday, market demand, or discounts — a well thought revenue management strategy is a must-have to boost your bottom-line.
In this blog post we would cover elements, factors that go into the building of revenue management strategy. You will also get to know how you can automate and implement rate rules across bulk properties.
How do you choose the right price for your short-term rental?
Temporary housing market is dynamic and sensitive. So, how to get the right price?
Choosing the right price for your property is not straightforward as it seems. While you are in the process to fix base rate, it is important to consider the market conditions, competitor’s rates, or unit rate competitive to units with similar specifications & demand for maximum profitability and success.
Now you have the base price for your listings. But it does not mean you are done with your property pricing. Rather you have to constantly check whether your rentals are priced in accordance to local market demand or are the rates yielding the right margins. That’s why you need to create an effective revenue management strategy to have competitive edge when pricing your rentals.
Why to have dynamic pricing over flat pricing
Now you have optimal pricing for your listing where you have taken into consideration all the factors. You can easily set flat rate across all similar availability throughout the year.
If you think it is that simple? Think again.
Let’s do some math to understand it better.
A unit in New York with 2 bedroom has ADR $150 for every available night. But as per the market data, ADR for similar listings in January showed $120 and July pricing showed $200. This means that the rental business is over charging in lean season resulting in low occupancy. Also, rental business is losing $50 per day when compared to average bookable listing in july, accounting to $1500 every month(if booked for 30 days).
Would you like to leave your hard-earned money on table or would you like to see your units vacant? You need to have dynamic pricing but the real challenge is how to set the right price for the property. How frequently you need to update the price? What factors to consider when setting the ADR?
Factors that affect rental property pricing
We know temporary housing pricing is dynamic. You can’t just have a flat price for all the units throughout the year. Most often property managers tend to update rates monthly or even less frequently. But set the rates and forget it not an effective way to manage pricing.
The bottom line is to have optimal pricing for your listing and boost profitability. There are numerous factors that contributes to competitive & optimal rate for your listings. ADR is also affected by seasonality, peak season, local market demand, availability of the listings, days of the week and days before arrival.
Dynamic pricing & discounts
Moreover, rental units pricing also depends on discounts you offer to your guests when a defined condition is met. Be it minimum stay or occupancy level requirements being met, setting discount rules not only boost profitability but also reduces manual work for staff.
How you can automate update bulk rates with ZENYA
As you grow your portfolio, it is hard to update rates across multi-location properties frequently. The real challenge is to update rates in real-time as it takes lot of admin time. Updating rate rules to your rate plan like Min. stay, Max. stay, availability is crucial for rental business as it helps you reach your prospects faster. But manually applying rate rules for every building or units is frustrating and error prone. Automated pricing tools can update the optimal rates in real-time.
With rental property management software like Zenya, you can easily create rate strategy, discount rules, and update bulk rates of your rental inventories with few clicks. All these rates are shown in real-time for direct website booking.
In 3 simple steps, you can automate bulk pricing of rental listings. Firstly, create a discount template based on length of stay and offer % discount or set a flat fee rate. Secondly, get all buildings and units within one-time frame or rate type or city etc. to be shown on one single screen using the rate filter. At last, select properties and bulk assign rates, and discount rules to all the selected properties. All these rates get shown.