By The Hospitable Team
Imagine a host, let’s call them Sarah. She wanted to optimize her income but found herself in a pricing strategy puzzle. Sarah is not alone; many hosts face similar dilemmas. That’s where our masterclass with Richie Khandelwal, Co-Founder of PriceLabs, comes into play.
Dynamic pricing strategies, driven by data and automation, are the heartbeat of revenue optimization in the short-term rental industry. As a true pricing guru, Richie delved deep into why dynamic pricing is essential and why hosts with any property type still benefit the most from it.
The synergy of wisdom between PriceLabs and Hospitable is at the tip of your fingers!
Watch the full Hospitable Masterclass on YouTube or skim through the highlights below.
It all starts with simple demand and supply. PriceLabs keeps a close eye on both the short-term rental (STR) market and the hotel market. It monitors the flows of demand and supply in these markets, helping hosts make accurate and quick pricing decisions.
“So, we’re looking at all of this data coming up with our forecast. Then, on the other side of it are events.”
Events play a significant role in pricing dynamics. PriceLabs predicts how much prices should increase, ensuring hosts capture every opportunity. For instance, for Taylor Swift’s concerts in 2024, rates are gradually adjusted higher, keeping future demand in mind.
Direct Booking Pricing Strategy
Besides saving money, direct booking brings fascinating benefits to your vacation rental guests, when integrated with dynamic pricing. Richie lists some of them:
- Rate Parity: Rate parity ensures that guests receive consistent rates across different booking platforms, including direct booking websites.
- Promotions and Discounts: Even when you maintain rate parity, you can introduce promotions or discounts on your direct booking site.
- Flexibility in Booking Windows: Dynamic pricing often involves adjusting booking windows and encouraging guests to book earlier — not only to maximize occupancy but also to offer a broader range of dates and options.
- Adaptive Pricing: During peak events or seasons, guests can expect pricing that reflects the heightened demand. Conversely, during low-demand periods, they may enjoy more budget-friendly rates.
All those pricing signals, flexibility and adaptability ensure that guests have a wide choice of options that align with their expectations and budget, making their experience more satisfying.
Launch your Direct Booking platform without breaking a sweat
Mid-Term Rental Pricing Strategy
Mid-term rentals (MTR), as Richie explained, can be efficient, but they typically yield less per night than short-term rentals. However, their profitability shines in certain markets where short-term rental demand might be lower.
This strategy is gaining traction, with hosts targeting specific guest demographics like travel nurses, remote workers and disaster relief organizations. However, Richie emphasizes the importance of careful mid-term calendar planning and stay restrictions management:
“Mid-term is a fantastic strategy and we’re seeing quite a lot of hosts focusing on it. […] It’s really important that you understand your stay restrictions well. There are a lot of strategies and plays that you can do with stay restrictions on the mid-term side and we work with quite a bit.”
What’s Next for Smart Pricing?
PriceLabs is gearing up for a groundbreaking release that’s just around the corner, promising to be a game-changer in the world of dynamic pricing. While Richie couldn’t divulge all the details (we don’t want to pry into company secrets, after all!), he did give us some enticing hints.
“We’re changing what dynamic pricing means. Just like the market and users, things have really shifted over the last three years. So, that’s all I can say. Look out in the next couple of weeks…”
Check out the full Hospitable Masterclass and get a comprehensive overview of the dynamic pricing strategy options that will change your game once and for all!
Hospitable is here to support a world where short-term hosting is just as carefree as simple property investment. Get your 14-day free trial now!
We’ve been inviting the best industry experts to our Hospitable Hosts podcast. Our guests shared their valuable insights and expertise on how to navigate the short-term rental industry and gave valuable tips that can make your life as a host just that little bit easier.
We know that being a short-term rental host can be like a game of Tetris… guests, bookings, and cleaning schedules are constantly falling from the sky and you have to fit them all together perfectly. To help our hosts slot everything into place, we organize Hospitable Masterclasses that are jam-packed with inspiration and insight.