Depending on where your properties are located and several other variables the daily price of your property could vary from day to day quite a bit. Having a service that automatically updates your daily rate to stay competitive is one less thing you have to do to run your business.
What Is Automated Pricing Software?
Automated pricing software is a service you can buy for your rental business in order to maximize your monthly profits by always selecting the best price for your particular market.
The software benefits are twofold. The first being further automation of your business operations, which allows you to focus on other more important things such as expanding your portfolio.
The second benefit is that this service will actually make you more money automatically. Some services like Beyond Pricing claim to increase monthly revenue by up to 40 percent—just by passively using the service. This obviously will vary from property to property, but it does in fact work.
How Does It Work?
The way automated pricing software works is by tracking and updating your daily rate using three primary metrics—the first being “seasonality.”
Each market will have different seasons in the year that your properties will be more profitable. This usually means more traffic and tighter supply. To maximize your profit in this season, your prices will most likely go up automatically to stay current with the market.
For example, if you are operating your rental business in a vacation market like Hawaii, then you will probably get higher daily rates in the summer months when people are regularly going on vacation.
The second factor is “day of the week.” Again, each market is different, so which day of the week is more busy will depend on where you are located.
Markets like Las Vegas charge higher daily rates on the weekdays than most weekends. This is because most big events take place on the weekdays and not so much on weekends. But it does vary. Your city may be a very business-oriented market that can demand a premium Monday through Friday but slows down on the weekend. Other markets may be the exact opposite.
But in any case, having automated software control this pricing fluctuation for you is essential—especially once you have more than three properties.
The third factor is for “special events.” You better believe having a major sporting event, music festival, or business conference in your city is going to make an impact on short-term rental prices.
Hosting the Super Bowl in your city or another similar event could triple your profits for that month—or more. If you don’t take advantage of this pricing metric, then you’re leaving thousands of dollars on the table each month.
By now you probably realize that it’s hard running a business, growing a business, and trying to keep track of everything that’s going on in your market each week. This is where automated pricing software will come in handy.
Instead of having to constantly stay updated on every little thing that’s happening in your city, you can get back to business. This is the benefit of automation. These three pricing services will help you do just that.
The Most Popular Automated Pricing Services
The most popular automated pricing service for short-term rentals and Airbnb is called Beyond Pricing. They provide all of the above pricing strategies and integrate well with Airbnb, VRBO, and Booking.com. Beyond Pricing allows you to link multiple properties through an online portal, where you can manage your accounts and calendars.
Beyond Pricing allows users to sync their calendar with the pricing software, making the entire process 100 percent automated. Your prices will be adjusted daily to maximize your profits and reduce vacancies each month. Beyond Pricing offers several different “pay as you go” plans that cost between 1 and 1.25 percent.
Another popular dynamic pricing software for your short-term rental company is Wheelhouse Pricing. This service offers pretty much the same features as Beyond Pricing. Wheelhouse also offers a pay-as-you-go plan that costs between 0.75 and 1 percent per booking while you’re using the software. Wheelhouse Pricing is available in over 300 markets. Check their website to find out if they’re in your city.
Both of these services are great, and both of them offer 30-day free trials so you can find out whether or not it’s a good fit for you and your business. I personally recommend Beyond Pricing, as most people who have used the service would also. However, it is a little more expensive, so this may be an issue for you, depending on how you run your rental business.
Either way, you’re going to be much better off using a pricing software because of the automation aspect of the service. The more you can automate the daily operations of your business, the faster you can grow.
p.s. I’m not affiliated in any way with these companies and do not benefit from them in any way.
Do you automate your business in any way? How so? What software do you use?