One of the most difficult parts of being a vacation rental owner or property manager is determining what to charge for your vacation rental. In short, pricing your VRBO or Homeaway listing is difficult, but here's 5 tips to help you maximize revenue and occupancy for your listing.
1. Set reasonable occupancy goals
Occupancy rates and expectations should differ by market. If your listing is located in a ski resort such as Vail, Colorado, it is going to be nearly impossible to attain an occupancy rate of 100%. However, if you are located in a less seasonal market such as San Francisco or Miami and you are willing to drop prices during low season, you can reach hotel level occupancy rates of 80-90%. When determining your goal for occupancy throughout the year, do some research about hotels in your area and set your goal similar to that of any hotel occupancy if you are managing your vacation rental full-time. However, that should be a stretch goal because vacation rental occupancy tends to be consistently lower on average than that of hotels.
2. Determine your average nightly rate
If you have been renting your vacation rental out for years this will be easier for you. Simply analyze your historical prices for your VRBO, Stayz, or Homeaway listing which will help you figure out this number. This might be difficult if you are a new host, but there’s some tricks to help you determine a good starting point for your average nightly rate. Simply find a listing on VRBO of similar size and quality to your listing, and double check that the listing you are referencing has a couple confirmed reservations in the next month or two. View the referenced listing’s rate table and take the average of the various seasons if that host has multiple throughout the year. 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.
3. Analyze your market's seasonality trends
Figuring out the seasonality of your market is one of the most important factors to maximizing revenue for your VRBO or Homeaway listing. There might be some information you can look up regarding hotel seasonality in your market, but at Beyond Pricing we’ve created a helpful resource for you to determine trends in your market’s seasonality. Check out our Plotly page to check if we’ve published your market’s seasonality based on historical booking trends, and if you can’t find your market, shoot us a note to email@example.com and we’ll upload your market soon!
4. Figure out demand trends for weekends vs. weekdays
Understanding the difference in demand for mid week (say, Tuesday) versus a weekend day (say, Saturday) is also crucial to correctly setting prices for your VRBO and Homeaway listing. If you are located in Las Vegas or Lake Tahoe, you might have 3x the demand on weekends compared to weekdays. However, if you are in a major urban city such as New York with lots of business travelers mid week, the demand can be close to equal when comparing mid week versus the weekend. Luckily enough, we provide a free no-commitment 3 month demo, so you can take your VRBO or Homeaway listing (or a neighbors of similar size and quality if you haven’t yet created your listing) and plug it into our demo to help get a solid understanding of the difference in demand for weekends compared to weekdays.
4. 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 is 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 is important to note, however, that major events can sometimes have a negative effect on demand because of an increase in supply. We noticed this effect in Philadelphia for the Pope visit, as well as in most cities that host the Superbowl. 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 Pricing so you can ensure that you are always the most competitively priced host or property manager in your neighborhood.
VRBO and Homeaway Pro Tips!
-Unlike the hotel and Airbnb industry, VRBO pricing relies on seasons rather than nightly prices. For this reason, it is important to utilize the weekend and event season settings on your VRBO listing.
-VRBO provides a “Rate Calendar”, which can be an incredibly helpful resource if you are a new VRBO 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 list on both Airbnb and VRBO, keeping your rates consistent across platforms can be labor intensive if you are doing it manually. For this reason, we highly recommend using a 3rd party pricing service provider such as Beyond Pricing to help keep nightly prices consistent on the various marketplaces that you list your vacation rental.
Want to learn more about how Beyond Pricing can help maximize revenue on your Airbnb? Demo your listing for free using our dynamic pricing software!