Pricing your vacation rental correctly may be the most important thing you can do to grow your revenue.
But it’s also one of the most difficult things to get right—especially in an increasingly cut-throat vacation rental marketplace.
Enter Amanda Whittington and Jon Latorre. As Directors of Regional Portfolio Analytics and seasoned vacation rental marketers, Amanda and Jon specialize in revenue management for thousands of Vacasa homes across the country.
We talked to them about vacation rental pricing strategy and the evolving vacation rental industry. They shared some surprising insights for homeowners investigating vacation rental pricing management.
So if you’ve ever wondered how to price your vacation rental, consider these expert tips.
You’ve probably done it: opened your browser, searched something like “how to price an Airbnb rental,” and clicked the first link. It might have told you to evaluate what your neighbors are doing, and base your vacation rental pricing off of that.
But Jon says to be wary of that advice.
“Historically, homeowners have taken a straightforward approach to how they set their own rates. They look at their neighbor, decide how nice their house is relatively, then peg their rate to the comparable rental properties,” he says. “But just because a home looks similar to your own, doesn’t mean it’s a useful comparison.”
By vacation rental industry standards, a good comparison requires a home with similar characteristics and demand without any major pricing restrictions.
“For example, a house that’s identical to yours with high baseline daily rates or extended minimum stays doesn’t work,” Jon explains. “It’s not priced correctly relative to the market, which hurts demand—and means you could be unwittingly undercutting your own success by using its pricing as a template for your own.”
“Basically, you don’t want to copy off a ‘D’ student,” he jokes.
Instead, short-term rental owners should take the time to thoroughly research the market conditions in their area—but Jon suggests working with a professional revenue management team for the best results.
Whether you manually set your own rates or use dynamic pricing technology, your goal is ultimately the same: to get the most out of every night you book your vacation rental.
So, charging a higher price any chance you get might seem like a no-brainer. But according to Amanda, just because you can get booked at a record-setting nightly rate doesn’t mean you should.
“When demand is uncharacteristically high, market prices can skyrocket. Your home may book for that higher rate, but it could leave the guest unsatisfied,” she says.
If a guest who feels like they paid a premium for a standard vacation rental experience leaves a bad review, it might affect your business down the road.
“Middling reviews may drive off interested guests from booking in the future—or finding your home all together,” she says. “It’s all about balancing the highest optimal price with guest satisfaction,” she says.
Bad reviews happen even to the best of us—so do what you can to keep your high season pricing in sight of what your home offers. (And consult our guide to responding to bad reviews in the meantime.)
Homeowners who aren’t keen on manually fine-tuning their short-term rental pricing will often turn to a vacation rental pricing tool.
“Typically, short-term rental pricing software will use automated dynamic pricing that can respond in real time to booking conditions,” says Amanda. “A pricing tool can speed up otherwise manual calculations, and put the heavy lifting of pricing changes on an algorithm.”
Recently, more out-of-the-box vacation rental pricing tools have entered the scene, promising homeowners more sophisticated revenue management and pricing strategies. But the way short-term rental owners use these tools can impact their bottom lines.
“Let’s say a homeowner wants to know how to price a vacation rental, and they invest in some pricing software,” continues Amanda. “If they make the mistake of setting restrictive minimum daily rates or minimum stays, they’ll undo a lot of the good of the pricing software they’ve paid for.”
She and Jon agree that the best thing to do is to trust pricing professionals who understand the nuances of short-term rental pricing—and who can offer more tailored data to inform your home’s pricing strategy.
“At Vacasa, we use over 1 billion data points to craft our homes’ nightly rates, which we believe helps our homeowners earn more,” he explains. “Most out-of-the-box short term rental pricing tools have limited insights compared to our exclusive tech—it’s like the difference between a tailored jacket and one you’d buy off-the-rack.”
Short-term rental pricing is a huge topic to handle alone—even with supportive technology.
That’s why both Amanda and Jon recommend partnering with Vacasa’s full-service vacation rental management.
“Vacasa’s biggest advantage in pricing is the people behind the automation and technology. We have teams of regional analysts who specialize in knowing local markets inside and out,” she says.
“Product managers, data scientists, and engineers are all working to ensure our pricing tools and algorithms are continually improving—and that, in turn, ensures that our homes in any market can maximize their revenue potential.”
According to Jon, Vacasa’s pricing teams put their money where their mouth is.
“Our homes’ rates are dynamic, which means they automatically adjust based on market data,” Jon tells us. “To know what a market looks like—and to accurately understand changes in demand—our team has to analyze data, and a lot of it.”
“With our vast historical data sets and new research, Vacasa’s continued investment in pricing puts us in a position to make smarter choices and pass the upside back to our homeowners.”
Vacasa also invests in constantly improving its pricing technology by adding more ways to help homeowners get the maximum value out of the bookings they earn.
“Recently, we’ve developed itinerary-based pricing, which helps fill calendars more effectively and reduces the overall number of 'stranded' nights between bookings,” Amanda says. “It leverages lower rates to fill help nights that might normally go unbooked, like an open Monday and Tuesday between two existing reservations.”
Our pricing program also offers homeowners incredible responsiveness on some of the world’s largest vacation rental booking platforms.
“Our ability to manage home listings on a plethora of booking channels at the same time is what truly sets us apart,” says Jon. “Not only are we fantastic at managing those listings simultaneously, but we have established relationships with major players like Airbnb and Vrbo.”
Combined, our robust local pricing experts and collaboration with powerful booking channels help keep vacation rental owners competitively priced in an increasingly sophisticated industry.
It makes sense that Jon’s core advice to vacation rental owners is to keep it simple.
“It’s easy—let Vacasa do it.”
Dynamic pricing is a tech-forward approach to adjusting your vacation rental’s nightly rate. Much like an airline ticket, dynamic pricing algorithms respond to factors that influence demand, like seasonal booking patterns and holidays.
At Vacasa, we’ve invested in creating one of the industry’s most advanced dynamic pricing systems. We use over 1 billion data points to craft a nightly rate that helps you maximize your income and keep your home’s calendar filled.
Yes, dynamic pricing is an option on Airbnb.
If you’ve been considering how to price your Airbnb rental, Airbnb has a tool at your disposal. Their dynamic pricing system is called Smart Pricing, which hosts can turn on and off at their discretion.
So if we have similar services, what’s the difference between Vacasa and Airbnb? We’re glad you asked.
Call 888-513-1785 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 Colorado LLC; Vacasa Delaware LLC, 302-541-8999; Vacasa Florida LLC; Vacasa Louisiana LLC, Dana MacCord, Principal Broker, ph 504.252.0155 (Licensed in LA); Vacasa Michigan LLC, 947-800-5979; Vacasa Missouri LLC, Susan Scanlon, Designated Broker; 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; Vacation Palm Springs Real Estate, Inc., California DRE #01523013, 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 Maine, Michael McNaboe, Designated Broker); Vacasa Real Estate LLC (licensed in Texas, Debra Brock, Designated Broker); Vacasa Real Estate LLC (licensed in Washington, Robert Brush, Designated Broker); Vacasa Seasonals Inc., California DRE #02160171, Daned Kirkham, California DRE #01424621; 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, Cameron Bree James, Licensed Property Manager; Vacasa Virginia LLC; Vacasa Wisconsin LLC; Vacasa Wyoming LLC. In Canada, this advertisement is provided by Vacasa Canada ULC, CPBC lic. number 75826, 172 Asher Rd. V1X 3H6 Kelowna, BC.