Pricing your vacation rental correctly is a balancing act. Your nightly rate needs to be high enough to cover your fixed and variable costs, while still being attractive for your market and earning you enough revenue to make sharing your vacation home worth it.
Finding that sweet spot takes time and practice. It can be tempting to guesstimate rates based on that popular rental down the block. But, you risk losing more bookings because you might be comparing apples to vacation homes.
The right vacation rental pricing strategy will maximize your bookings and your rental income. There are steps you can follow to do it yourself, and there are tools and software that will take it off your hands. Whichever approach you prefer, the most important thing is that you reach your financial goals.
If you want to handle the pricing process yourself, from market research to listing updates, here’s what you need to do.
When you transition your vacation home to a vacation rental, you’re effectively running a business. Knowing what you need to keep the lights on, so to speak, and keep your vacation home guest-ready will help you determine your minimum nightly rate.
Ensure all of your fixed and variable costs are accounted for—such as your mortgage payment, taxes, and utilities. Additionally, plan in case your home needs a professional deep clean or repairs. It can get expensive, but well-kept homes get better reviews, which means more bookings and a higher earning potential overall.
Your competition is full of vacation rental pricing strategy insights. Search for your city or town on major listing sites like Airbnb, Vrbo, and Booking.com, and take a look at the top results. These listing sites use algorithms to display the most popular rentals first. Owners at the top are doing something right.
Make sure you’re comparing apples to apples. Use the search filters to display vacation rentals that have the same amenities and number of rooms as yours. Pricing against a rental with extra bedrooms will price out guests looking to book a home just like yours.
The flip side is that you can raise your nightly rates by investing in premium services. For example, Vacasa homeowners make 15% to 25% more annual rental revenue when they install a hot tub.
Guests know a good deal when they see one. Your nightly rate should match the current demand, or you risk losing bookings (and income) to more competitively priced homes. Most vacation rental owners have the two prices set for peak season and slow season, which you can find by looking ahead on their Airbnb calendar.
Experienced vacation rental owners know that demand changes more frequently than seasons. It’s affected by weekly, even daily, factors ranging from weather to events and holidays. Adjusting your rates frequently will help you fill your calendar and maximize earnings on individual nights.
While the goal is to book every night, it’s highly unlikely, even in locations with a year-round booking season. According to Mashvisor, projected occupancy rates for U.S. Airbnb rentals in 2019 ranged from 21% to 75% across 30 major cities.
A strong vacation rental pricing strategy can reduce vacancies, but you need to keep a finger on the pulse of your market. The more competitively—yet profitably—you can price your vacation home every night, the more bookings and rental income you’ll generate overall.
Crafting a strong vacation rental pricing strategy takes time and due diligence. But that can take time away from attending to your guests. Vacation rental pricing software and tools help fix that.
Deciding which is right for you depends on the level of control you prefer to have. Some serve primarily as dashboards, with market research and demand data in one place to help you make more informed pricing decisions. Others handle everything automatically. Here are a few options to consider.
RateIntelligence is a free rate management tool through Booking.com. It shows you local rates and market forecasts up to 360 days in the future, all in one place. You can also set custom pricing alerts, download and share pricing reports, and stay up to date with local events.
MarketMaker is HomeAway’s rate management tool. It shows you the nightly rate averages in your market up to 365 days in the future for homes that are similar to yours. You can also view revenue and occupancy forecasts, as well as the number of searches by travelers who are looking for vacation rentals in your market.
While RateIntelligence and MarketMaker only provide data to inform your pricing decisions, Beyond Pricing provides data-driven pricing recommendations and updates your listings automatically across Airbnb and Vrbo.
Even with a vacation rental pricing software like the ones above, you risk having a situation where the right hand doesn’t know what the left is doing. Having more parties are involved in pricing and managing your vacation rental means more room for error.
Full-service property management with Vacasa allows you to have the best of both worlds while generating significantly more bookings and rental income. As a Vacasa homeowner, you get industry-leading dynamic pricing software, 24/7 guest support, and local market expertise on your side.
Our demand-driven dynamic pricing algorithm for vacation rentals automatically adjusts your rates for local market conditions in real time. And thanks to powerful machine-learning technology, it gets smarter and more accurate every day.
Plus, our partnerships with top booking channels like Airbnb, Vrbo, and Google make it easier than ever for guests to find and book your vacation home.
Ready to perfect your vacation rental pricing strategy and maximize your rental’s potential? Connect with a local Homeowner Consultant below, and we’ll be in touch with you shortly.
Call 866-668-4282 to speak with a Homeowner Consultant, who can answer preliminary questions and see if we’d be a good fit for you.
If you'd like to move forward, we’ll put you in touch with our market expert in your neighborhood to explore the financial potential of your home, outline our management fee, and introduce your local team.
Vacasa offers property management and other real estate services directly through Vacasa LLC and through Vacasa LLC's licensed subsidiaries. Click here for more information about Vacasa's licensed real estate brokerage/property manager in your state. Vacasa’s licensed real estate brokerages/property managers include: Vacasa Alabama LLC; Vacasa Arizona LLC; Vacasa Florida LLC; Vacasa Louisiana L.L.C. (licensed in Louisiana); Vacasa Michigan LLC, 947-800-5979; Vacasa Nevada LLC; Vacasa New Hampshire LLC, P.O. Box 283, Conway NH 03818, Dave Grant, Broker of Record; Vacasa New Mexico LLC, 503-345-9399; Vacasa New York LLC, 888-433-0068, Susan E. Scanlon, Real Estate Broker; Vacasa North Carolina LLC; Vacasa Pennsylvania LLC; Vacasa Real Estate Corporation, California DRE #02105811, Joseph Czapkowicz, California DRE #01380722; Vacasa Real Estate LLC (licensed in Colorado, Daned Kirkham); Vacasa Real Estate LLC (licensed in Idaho, Oregon, and Utah); Vacasa Real Estate LLC (licensed in Tennessee, 615-671-9916); Vacasa Real Estate LLC (licensed in Washington, Robert Brush, Designated Broker); Vacasa South Carolina LLC; Vacasa Tennessee LLC; Vacasa Vacation Rentals of Hawaii LLC, 3350 Lower Honoapiilani Road, Suite 600, Lahaina, HI 96761; Vacasa Vacation Rentals of Montana LLC, Patrice Tompkins, Licensed Property Manager; Vacasa Virginia LLC; Vacasa Wisconsin LLC.