.png)
In today's fast-paced business world, it is essential to make data-informed decisions in order to keep up with your goals. In the vacation rental industry, this means analyzing historical data and competitors to make the best possible pricing decisions. But, which is the better option: data insights or pricing tools? In this article, we will discuss the benefits of each tool, the insights you can gain, and how to decide which is best for your business.
What Are Dynamic Pricing Tools?
Most dynamic pricing tools available utilize software to analyze scraped data market trends and demand to set prices. They are designed to help vacation rental owners optimize their pricing strategy to increase occupancy and revenue. These tools, like PriceLabs and Wheelhouse are excellent for setting up a pricing strategy that responds to the demand in real-time.
However, there are some limitations to pricing tools. For example, a pricing tool cannot pull comp sets and a rental projection to help you grow your business. Similarly, it cannot pull an owner report and market data to help you quickly communicate with your current homeowners. While pricing tools are great to save time for Revenue Managers, they cannot always provide a deeper insight into why a trend is occurring or provide that information to other company members.
What Are Data Insights?
Data insights, like those provided by Key Data Dashboard, offer a comprehensive view of a vacation rental business. By analyzing the direct source data provided, revenue managers can identify trends and patterns that can inform your pricing strategy, as well as your overall business strategy.
For example, you can compare your performance to local competitors based on KPIs like average daily rate, occupancy rates, and RevPAR. Then, that data can be used to adjust your pricing strategy to stay competitive and even attract more guests and increase your revenue.
In addition, data driven insights can also be used for future pricing strategies with forward-looking data. With the insights provided by historical data, real-time performance, and future projections, you can identify booking patterns and demand trends to adjust your pricing strategy accordingly.
But, insights from Key Data can be used for far more than revenue management. For example, owner reports can be used to communicate regularly with homeowners. Marketing departments can utilize insights on feeder markets to target their advertising efforts. With automated reporting, you can even schedule weekly reports for your entire team to stay up-to-date on market trends.
Understanding Why to Price Properties Differently
One important thing to understand when it comes to pricing is why properties are performing the way that they are. One way to do this is to compare different units in your inventory across several metrics like average daily rate and nights booked while looking at property attributes. This information can help you identify why certain vacation rental properties can bring in more money, so that you know what to upgrade or add to your inventory.
For example, if you have two vacation rental properties that are identical in terms of location and amenities, but one is consistently earning more than the other, you can analyze data insights to determine why.
Tips For Utilizing Rental Data Driven Insights
By using data, you can identify areas for improvement and make data-informed decisions that can help grow your business. Here are some tips on how to use data insights to optimize your vacation rental pricing strategy:
- Analyze demand trends: Look at historical booking data to identify trends in demand. Are certain times of the year more popular than others? Are there specific events or holidays that drive demand? Use this information to adjust your pricing strategy accordingly.
- Compare performance to local competitors: Analyze data on your local competitors to see how your vacation rental properties stack up. Are they charging more or less than you? Are bookings down across the region? Comparing your properties is essential to staying competitive.
- Identify peak booking times: Analyze booking data to identify peak booking times. Knowing the most common booking seasons can help you to identify when a price increase or decrease might be necessary.
- Monitor occupancy rates: Keep track of occupancy rates to ensure you are not leaving money on the table. If your occupancy rates are consistently low, it may be time to adjust your pricing strategy or see if there is another problem present.
- Utilize rental projections: Generate projections for new and existing business based on current market data. Save time and gain a better understanding of what’s to come in your business.
- Unit Level Homeowner Data: Share unit level projections with homeowners for increased satisfaction and loyalty.
Which Is Better to Use?
Each tool has its own strengths and they can be used to complement each other as well. Pricing tools can be useful when automating pricing for strategic goals. This allows property management companies to save time while helping to maximize revenue. Revenue managers may require a pricing tool once they have a large enough inventory for logistical reasons.
Meanwhile, data from Key Data provides a well-rounded tool that can help you gain a deeper understanding of the market and what is causing impacts on pricing. These insights can be used not only by Revenue Managers to create a well-rounded pricing strategy, but also across departments for marketing strategy, guest services, and even housekeeping. Key Data can be used in harmony with pricing tools to create the ease of automation without leaving behind any insights as to what is causing changes in the market.
If you’d like to learn more about how to utilize data for future planning, competitor analysis, and pricing strategy, click the link to book a personalized demo. See how Key Data can work in unison with dynamic pricing tools or as a substitute to help maximize revenue and provide a comprehensive view of the market.
