One of the most important aspects of managing a successful rental business is pricing your properties competitively. Although it may appear simple, it is far from it. Renting out a property efficiently requires time, effort, and money. You don't want to lose money by charging too little or too much in rent. If you're not sure how to put a price on a rental property but would like to learn the basics, keep reading.

Dynamic pricing software tools analyze historical numbers, industry trends, and even competitor data to help retailers set prices more accurately. With short term rental and Airbnb pricing, this may mean having pricing specific to seasonality, day of the week trends, or actual sales in the market. Dynamic pricing is now the norm across many industries.

These methods can be used to improve pricing strategies. Let's investigate what the potential benefits of these automated aids are for your company.

save time

Perhaps the biggest benefit of utilizing dynamic pricing software is that you can adapt to changes in market trends with ease. Price changes will happen automatically, rather than you having to manually adjust pricing. This will help to ensure that you have a profitable online shopping presence and will save you time, allowing you to focus on other areas of your business.

boost your sales

Some people view dynamic pricing as an easy way for businesses to raise prices. While this may be true to some extent, it's important to remember that this method can also be utilized to bring down prices. A price cut may be all that's needed to revive slow sales and keep a company afloat for a few extra days, a few extra weeks, or even a few extra months. A flash sale is a simple technique to increase the adoption of dynamic pricing on a regional scale.

CREATE HIGHER LEVELS OF DEMAND

Dynamic pricing is often used for property rentals because vacant units equate to zero revenue. If the guest needs to book at the last minute and the unit is still available, it may be offered at a lower price to some consumers. That allows you to still maximize profits, giving you access to whatever revenues may be available.

TAKE EVENTS AND HOLIDAYS INTO ACCOUNT

Events and holidays are taken into account in the forecasting efforts. Big holidays like Christmas, Easter, Ramadan, and Thanksgiving can skew current hotel trends in unexpected ways. In many cases, these events will move the demand curve to the right.

However, dynamic pricing is not a miracle cure in every scenario. All the advantages mentioned above are not without drawbacks, though. Property managers in the rental industry can encounter other unanticipated market developments that the program isn't designed to recognize. Therefore, it is crucial to have a Revenue Manager that can adapt to shifting market conditions and ensure that prices remain competitive. It's important for those working in hotel management to have access to accurate forecasts so that they may better prepare for the future and make strategic decisions based on data rather than guesswork. Predicting future demand with the help of forecasting allows you to make the most revenue as possible out of a consumable inventory. Read along to discover the benefits only Revenue Managers can provide:

KEEP AN EYE ON INDUSTRY TRENDS

The overall direction of the market should also be closely monitored. For instance, have there been fewer visitors to the area where your vacation unit is located? Do global events, like the COVID 19 epidemic, influence bookings? All of these factors should be taken into account when making predictions.

INTERPRET THE DATA

It is not enough to simply have access to data; analyzing that data is the critical step that must be taken for improved and more efficient decision-making. A comprehensive data interpretation and analysis is carried out by the Revenue Manager, during which time Key Performance Indicators (KPIs), alternative criteria, and movements in the industry are all taken into consideration in order to reach at the best possible solution.

INTERVENE MORE FREQUENTLY

With the help of a Revenue Manager, you will be able to discover what is happening in real time with your units and monitor the performance of your business on a daily basis. In turn, this enables you to make quick decisions that guarantee increased profits, decreased losses, and unquestionably an increase in the number of satisfied customers. With the capacities at hand and skills acquired, a revenue manager can make more frequent decisions as per the status-quo of the properties and fluctuating needs of the market; hence do last-minute interventions for the benefit of the client.

A PERFECT COMBINATION

The best course of action for your company would be to incorporate revenue management (RM) into a PMS, since these forward-thinking solutions deliver a more refined and modern hospitality experience alongside improved management and high-caliber care for guests, with optimal costs and a narrower spectrum of potential losses.

QUICK MATH: EVALUATE YOUR OPTIONS.​

Let us take a look into how property managers can make use of dynamic pricing tools, as well as an incorporated Revenue Manager in their PMS.

Consider the following scenario: a property manager has more than 50 units to manage; what benefits can we predict if they use dynamic pricing tools, or opt for a revenue manager instead.

Mr.alfred offers a comprehensive solution for property managers, managing their properties with a customized PMS and using the appropriate pricing strategy with a dedicated revenue manager team to assure the best prices and maximum profits.