Running a vacation rental is a lot of work, including communicating with guests, marketing, keeping the property clean, running efficiently, attracting guests, and so much more. Managing the revenue of your vacation rental is complicated but one of the most crucial tasks in ensuring your vacation rental business is thriving is growing occupancy and revenue.
Revenue management is the use of data analytics and strategy to predict consumer behavior in order to optimize product availability to maximize revenue growth. In the vacation rental industry, revenue management means proactively maximizing your revenue by ensuring your property is listed at the right price at the right time and marketed to the right guests on the right channels. This requires an inordinate amount of flexibility and understanding of data on your part, to strategically change your property pricing depending on where you are marketing it, to whom, and when. This component of managing your vacation rental can be made easier by using revenue management software that simplifies the process.
While the vacation rental industry has picked itself up from the slowdown of the global pandemic and begun growing again, the COVID-19 crisis has nevertheless upended some aspects of the vacation rental landscape, including revenue management. Relying on historical data and its understanding to design your revenue management strategy for the new era will simply not cut it anymore. While seasons remain for the most part, booking windows, lengths of stay, rates, types of property found attractive, and even services expected have all changed.
To compete in this new scenario, you need greater insight into how your market is behaving, closely monitor changes, and work proactively to continuously adjust for conversion and maximizing of revenue.
As revenue management gets increasingly more complicated, requiring more time and effort, even as you must compete harder on other aspects in a crowded vacation rental market, you risk stretching yourself too thin and not doing well at any of your responsibilities. You can always hire an analyst to handle your revenue management needs, but this is unlikely to make fiscal sense. And while Airbnb does offer a Smart Pricing tool that is free to use, its incentive is to offer guests the lowest price. In contrast, revenue management software automates the entire complex process including dynamic pricing, to automatically maximize your profits.
There are six main competitors in the vacation rental revenue management software space. They are driven by data-fed dynamic pricing algorithms and generally offer fairly similar features. Most offer a trial period during which customers can test out the software for free.
Here are the best revenue management software for vacation rentals:
A pioneer in dynamic pricing software, Beyond services over 340,000 listings in over 7,500 cities worldwide. A comprehensive revenue management platform, Beyond offers a dynamic pricing tool; Signal, a website builder and direct booking engine; Insight, search-powered market data and analytics; and Tally, a payment processing tool. Its team of specialists also provides expert guidance, from reviewing individual listings to personalized pricing strategies.
According to Beyond, the revenue management platform can deliver a 12% higher occupancy rate, 21% more reservations, 2X repeat bookings from the direct booking site, and up to 40% more revenue per night.
Offering portfolio analytics, dynamic pricing, and market dashboards for locations worldwide, PriceLabs recommends daily rates based on factors including market supply and demand, season, day of the week trends, special events and holiday predictions, and the number of days left to book. Rates are updated and built upon the base rate calculated for each listing based on historical and future performance data.
PriceLabs offers a suite of customizations including minimum prices, discounts, premiums, and occupancy-based adjustments. It also allows for bulk adjustments and showcases performance indicators.
Wheelhouse is the only revenue management software team with Ph.D. data scientists. The Wheelhouse Pricing Engine analyzes over 20 billion data points and 21 million listings, daily, and the platform claims an average revenue increase of 20.6%. Wheelhouse offers a comprehensive suite of revenue management features, personalized recommendations and customizable settings including base price, risk tolerance, price range, minimum nights, etc. It also delivers a complete overview of your market, performance data, and 18 months of forward-looking pricing.
Wheelhouse is available in over 1,500 markets across more than 100 countries across 6 continents.
Rented offers Art (Automated Rate Tool) as well as revenue management services from its team of experts. Art helps vacation rental managers create an optimized pricing structure by delivering dynamic pricing recommendations based on sophisticated pricing models. For vacation rental managers who need hands-on support, Rented provides a dedicated revenue manager who will provide manual oversight and expertise.
An AI-driven dynamic pricing tool for vacation rental owners and managers, DPGO analyzes over 120 data parameters and claims to deliver average increases of occupancy rates by up to 30%, earnings by up to 50%, and reduction of time spent on price management by 8X.
With access to local insights into over 5,000 markets particularly in the US and Canada, DPGO uses machine learning to analyze billions of data points to react to market changes in real-time. It allows you to expand on its AI recommendations via custom or standard strategies including More Aggressive or More Conservative and use its growth performance tracking features and pricing forecasts up to a year ahead.
A dynamic pricing software created by vacation rental managers, Nightpricer utilizes AI and an ADR based revenue management strategy to deliver what the company refers to as the sweet spot between revenue maximization and occupancy.
The platform considers season, day of the week, and week of the month; booking frequencies; and events to provide a “smart price”. It also includes a “Fire Sale” feature to discount last-minute rates to boost occupancy.
In keeping with its mission to partner with property managers in growing their business by providing solutions to achieve their goals, it is no surprise that Hostaway fully integrates with the best revenue management softwares.
As an all-in-one vacation rental software provider, Hostaway’s purpose-built PMS and channel manager enable property managers to streamline and manage from one place, marketing, sales, accounting, reporting, payment, and communications, driving efficiencies and growing revenue. In addition, Hostaway offers a marketplace of over 100 software integrations that help forward-thinking property managers grow their businesses even further.