By The Hospitable Team
Price is one of the most critical factors that travelers consider when deciding which vacation rental to choose to book a stay. That means that your Vrbo pricing strategy can have a huge impact on your occupancy rate and your overall revenue.
To maximize your income, you must set competitive nightly rates that reflect current supply and demand and your historical data. It’s not an easy task as market conditions are constantly changing, and there are many things to consider to determine the best price for each day.
Luckily, different Vrbo pricing tools can make life easier for you, automating your work. Read on to find out how using such tools to implement dynamic pricing for your Vrbo rental can help you stay competitive 365 days a year and maximize your revenue.
Automation is the only option if you’re looking for an easier way to run your vacation rental business and scale faster. Reliable vacation rental software like Hospitable can help you automate almost all your routine tasks, saving you hours of valuable time that you could spend on doing things that matter.
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Why Should You Use Vrbo Dynamic Pricing Strategy?
In a constantly changing vacation rental market, learning how to price your Vrbo property can be difficult to master. If you set your nightly rates too low at any time of the year, you risk losing money, and if your rates are too high, you may miss out on bookings.
That means you need to focus on optimizing occupancy and nightly rates and put all the right practices in place that will help you maximize your income in every season. Here is what you can do to price your Vrbo listing effectively.
Plan for long-term success early. If your Vrbo listing is new and has no reviews, consider pricing your property 15-20% lower than your competitors to get your first bookings and some positive reviews. Over time, those 5-star Vrbo guest reviews can help you win more bookings at higher prices.
Research your competition to understand what similar properties in your area are charging, and use this information to determine your Vrbo pricing strategy. Although doing research is a labor-intensive process, it will give you real insight into how your vacation home should be priced to perform well in the local market.
Offer promotions and discounts to make your listing more attractive to travelers and get more bookings. For example, you can offer discounts for long-term stays (7+ and 28+ nights) and the Vrbo military discount.
Don’t charge the same rate all year round because fixed pricing doesn’t account for any changes in guest demand in your area. If you use this approach, you could leave money on the table when demand is high and lose out to similar properties that offer competitive pricing when fewer people are booking.
Instead, you should adjust your pricing for high and low seasons as well as shoulder season to secure higher rates when there’s demand and encourage bookings with lower rates when things are slow. You should also consider local events that may create peak demand for vacation rentals. Additionally, you may consider setting different prices for different days of the week, with higher rates on weekends.
As you see, setting the right price for your Vrbo properties can be challenging. You should consider different factors to reach the best balance between nightly rates and bookings that will allow you to maximize your revenue.
The solution is using a dynamic pricing strategy. It’s a common approach in today’s travel landscape that allows businesses to respond rapidly to constantly changing market conditions. Dynamic pricing considers historical patterns and daily changes in demand and will help you optimize your rates to increase bookings and maximize your profits.
Vrbo Smart Pricing: How Does It Work?
The dynamic pricing strategy requires access to a lot of data, so Vrbo offers hosts a free comparison tool, MarketMaker. Although this tool doesn’t match the functionalities and features of Airbnb Smart Pricing, it provides some valuable insights that can help hosts make informed pricing decisions.
MarketMaker collects and analyzes relevant real-time market data from your and your competitors’ Property Management Systems to inform you about the average rates and occupancy in your market or competitive set. It also offers rate recommendations when its algorithm detects a gap between the listing’s current rates and the market’s occupancy or rate trends.
However, you’ll need to analyze the data and make all the changes to update your pricing manually. It involves a lot of work and is time-consuming, especially if you manage multiple properties. Many vacation rental hosts use paid alternatives to Vrbo smart pricing to take care of this task.
These dynamic pricing tools can automate your pricing on Vrbo, work with listings on other vacation rental websites, and integrate with multiple vacation rental management systems. For example, Hospitable has integrations with many industry-leading pricing tools that help you automatically push dynamic pricing to multiple channels, saving you time and effort.
The Most Popular Vrbo Pricing Tools: What Can They Do for You?
Dynamic pricing tools not only help optimize your rates to increase your revenue and bookings, but they can also automatically adjust the rates in response to the changing market conditions in your area. Moreover, using a dynamic pricing tool will help keep nightly prices consistent across all booking platforms where you list your property.
Let’s look at some of the best Vrbo pricing tools that can help you simplify setting dynamic pricing for your vacation rentals by eliminating the need for calculations or guesswork.
Beyond works with listings on Vrbo, Airbnb, and booking.com. The tool offers dynamic pricing powered by real-time consumer search data. Its algorithm analyzes long-term trends and daily search patterns and automatically adjusts rates once it identifies changes.
To identify demand on any given day, Beyond uses the top 3 factors, including seasonality, local demand, and days of the week. The tool also gives hosts access to real-time market data to help them make informed pricing decisions and offers a health score that shares how well your listing performs according to the base price.
PriceLabs is a dynamic pricing tool that automates daily rate updates based on market data and each listing performance. The system analyzes each listing and recommends daily rates based on several factors, including base rate, seasonality, day of the week trends, lead time adjustments, holidays, and local events.
Hosts who want to implement specific strategies can customize their Vrbo pricing. The advanced customization options include minimum prices, last-minute adjustments, orphan day prices, days of the week pricing, and occupancy-based adjustments.
Wheelhouse offers a dynamic pricing solution that uses advanced machine learning algorithms to analyze different data points, including market trends, booking patterns, local events, and competitor pricing. The tool also allows hosts to mix rule-based or data-driven strategies to ensure their listings are perfectly priced.
Advanced settings help hosts control how aggressive they want their pricing strategies to be and align them with their overall business goals. You can tailor your Vrbo dynamic pricing strategy to focus on increasing occupancy rate, maximizing revenue, or finding a balance between the two.
Staying on top of your rates is crucial for your success on Vrbo, and a way to achieve this is to apply dynamic pricing. However, tracking down and analyzing information about local trends, seasonality, and historical performance of your listing, and adjusting prices manually can be very challenging and time-consuming.
The easiest way to optimize your pricing strategy is to use a Vrbo pricing tool that analyzes historical and market data to provide tailored, automated pricing recommendations. It can help you ensure you’re setting the right rates without spending hours of your precious time and not leaving money on the table.
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