One of the most difficult parts of being a short-term vacation rental owner or property manager is determining what to charge for your listing. In short, it's not easy.
Here are 5 tips to help you maximize revenue and occupancy for your Vrbo listing with proactive revenue management.
Want to see what dynamic pricing can do for your vacation rental portfolio? Request a demo today!
1. Set reasonable occupancy goals
Occupancy rates and what you can expect to get from them should differ by market. If your listing is located in a ski resort such as Vail, Colorado, for example, it’s going to be nearly impossible to attain an occupancy rate of 100%.
If you're located in a less seasonal market like a major metropolitan city, however, and you're willing to drop prices during low season, you can reach hotel level occupancy rates of 80-90%.
Do some research about hotels in your area and set your goal similar to that of any hotel occupancy if you’re managing your vacation rental full-time. Take into consideration, however, that this should be a stretch goal—vacation rental occupancy tends to be consistently lower on average than that of hotels.
2. Determine your average nightly rate
If you've been renting your vacation rental out for years, this will be easier for you. Analyze your historical prices for your Vrbo listing to help you figure out this number.
This might be difficult if you're a new host, but there are some tricks to helping you determine a good starting point for your average nightly rate.
First, find a listing on Vrbo of similar size and quality to your listing and double check that it has a couple of confirmed reservations in the coming weeks.
Next, view the referenced listing’s rate table and take the average of the various seasons. This average nightly rate price will help you add or subtract other vital vacation rental pricing metrics such as seasonality, day of week, and local events.
Finally, assess what unique or special amenities your place offers that others in your market do not—an electric car charging port, for example—that you can call out in your listing and charge a few extra dollars.
3. Analyze your market's seasonality trends
Understanding the seasonality of your market and maximizing its potential is one of the most important factors to maximizing revenue for your Vrbo listing. There might be some information you can look up regarding hotel seasonality in your market, but that takes time and effort, let alone knowing where to look.
With Beyond’s Insights tool, you can get detailed information on what’s happening in your specific market as well as your individual listings. Leverage our technology to accurately assess what the high, low, and shoulder seasons are in your neck of the woods.
4. Figure out demand trends for weekends vs. weekdays
Understanding the difference in demand for mid-week versus a weekend day is also crucial to correctly setting prices for your Vrbo listing.
If you're located in Las Vegas or Lake Tahoe, for example, you might have three times the demand on weekends compared to weekdays. However, if you’re in a major urban city such as New York City, with lots of business travelers mid-week, the demand can be close to equal when comparing mid week versus the weekend.
At Beyond, we provide a free demo so you can take your Vrbo listing (or a neighbor’s of similar size and quality if you haven’t yet created your listing) and plug it into a demo to help get a solid understanding of the difference in demand for weekends compared to weekdays.
5. Research major events and holidays that spike demand for vacation rentals
Major events can create peak demand in many markets and are the best times to maximize earnings. It's important to do some research on major events in your market, especially for events that happen consistently year over year.
An event can be defined as anything that causes a spike in demand in your vacation rental market, including conferences, holidays, music festivals, etc. It's important to note, however, that major events can sometimes have a negative effect on demand because of an increase in supply.
First-time hosts can list their home for that one event, causing an increase in supply and therefore increased competition. Because of the ever changing demand and supply for events, we recommend using Beyond so you can ensure that you’re always the most competitively priced listing in your neighborhood.
A Few Extra Tips
Unlike the hotel and Airbnb industry, Vrbo pricing relies on seasons rather than nightly prices. For this reason, it's important to utilize the weekend and event season settings for your Vrbo listing.
Vrbo provides a “Rate Calendar”, which can be an incredibly helpful resource if you’re a new host. Simply reference an experienced host in your market with lots of reviews to compare their seasons, and if they look like they have done their research, you can learn a lot about your market from the Rate Calendar of experienced hosts in your neighborhood.
If you’re also listing on other platforms like Airbnb or Booking.com, keeping your rates consistent across platforms can be labor intensive if you are doing it manually. Leveraging Beyond’s Relay tool, for example, can help keep nightly prices consistent on the various marketplaces that you list your vacation rental.
Want to get detailed information on your listings and how they’re comparing to the market? Try Insights today!