How to build a strong revenue management strategy?

Revenue management is a key concept within the short and mid-term rentals sectors. Effective revenue management enables property managers to respond to market demand and optimise rates, ensuring their pricing is competitive and their occupancy and income are as high as they can be.

Hospiria users are able to use two different revenue management methods: dynamic nightly pricing, and seasonal pricing (also know as Length of Stay pricing).

Here we'll take a look at how to make the most of dynamic nightly pricing.

Dynamic pricing constantly reads the market data on prices, occupancy, and bookings trends for similar properties close to your property location. This provides users with the most up-to-date view of the market.

Just as importantly, dynamic nightly pricing automatically adjusts the nightly price within the criteria that you set for a property. This enables your prices to constantly respond to changing demand, pushing prices higher to reap higher nightly rates or making them softer to drive more booking.

The combined advantage is that the rates of your properties are constantly optimised to suit market conditions, and the regular updates show major platforms like Booking.com and Airbnb that your listings are frequently optimised. All of which helps your listings to come higher in their search results.

For our Software + Service Partners

One of the major benefits of our Service Suite is that we can execute a pricing strategy that is agreed with a Partner. As part of your onboarding, we will agree your minimum rates, base rates, and target income and build the best revenue management strategy to achieve your aims.

We will then oversee the execution of the revenue management strategy, and review it with you regularly - weekly to start with, then monthly once the strategy has been proven to be successful.

One of the major advances of this approach is that we can manage the complexity of executing a good revenue management strategy and bring all of our experience to help get it right first time.

One further bonus of this approach: your Pricelabs subscription is included within your Hospiria subscription. So you get the benefits of dynamic nightly pricing, and no extra cost.

In our experience, the core advantage of dynamic nightly pricing beyond the market data and automated updates is that it will “stretch” your prices lower and higher than you otherwise would. This strategy will increase the occupancy rate during lower demand periods as well as nightly rates in higher demand periods, therefore, maximizing revenue.

The benefit of using a dynamic pricing strategy is the competitiveness of your rates generating more bookings and increasing occupancy overall. Some Hospiria partners have seen gross profit increase by 40% because of introducing the dynamic nightly pricing.

You should consider some key factors, such as your typical guest stay, where they book, and your type of market. But dynamic nightly pricing can really help make a big difference to your revenues.