How to price in a competitive market

In the past, vacation rental managers used to set prices for their properties on a month-to-month or week-to-week basis, which is known as Set Pricing. This meant that the same price was set for many dates, regardless of the level of demand. For example, July would be priced at one point, while December would be priced differently. As the vacation rental market grew, managers learned to capture demand more precisely by pricing holidays differently.

Today, the majority of vacation rentals use Dynamic Pricing, which involves using software to measure the market and adjust pricing to match the average price point of competitors. Dynamic Pricing has been found to perform better than Set Pricing, but since most managers now use it, the competition has become more difficult.

At Hygge Hospitality Partners, we leverage our years of pricing experience to help our clients implement and build on Dynamic Pricing, allowing them to exceed competitors and deliver higher returns to their homeowners. After selecting the appropriate pricing system for their business, such as PriceLabs, Wheelhouse, or Beyond Pricing, the real opportunity lies in adjusting pricing in real time. By overpricing the market during holidays, underpricing during low-demand seasons, and other strategies, returns can be increased significantly.