This is a guest post from PriceLabs‘ Aishwarya Iyer.
Property managers and owners are constantly trying to set prices competitively to maximize the revenue of their portfolios. As time passes, you either increase your prices as you see demand hiking up or provide a considerable discount to your potential guests to compensate for the dying demand.
Short-term rentals are expiring commodities. As the day passes, the demand for that property also passes by. It is not a product that you can stock on the shelf in the hope of selling it another day. The perishability of rental nights pushes revenue managers to start the last-minute discounting process sometimes a little too early.
How to know when to add a discount and when a premium
You need to understand two factors: surplus demand in the market and the properties available for potential guests to book.
Surplus demand will help you understand if you will get bookings from now until the date you are looking for. Knowing this will help you win the race with the other property managers and owners.
Sometimes, a 20-day window might mean lower chances of getting a booking. For example, a 20-day window might be too short if your primary focus is long-term bookings. However, if you’re in the short-term rental market, a 20-day booking window is exactly when people would start booking a 2-day or a 3-day stay.
When you understand the demand left in the market, you will know if you still have a chance of selling.
Properties left in the market
Let’s imagine this, the demand is high for your property, and potential guests’ have multiple properties to choose from. You realize that you only have 12 days to get your property booked. Now, you offer extensive discounts. Just as you thought, your property gets booked. But, you learn that your competitor booked theirs for twice your rate just by waiting it out.
If there are about 100 properties in your area and only 20% have been booked, then offering a discount makes sense – the demand is less, and people would need the incentive to choose your property. At the same time, if only 10% of those 100 properties are available, then you know that demand is skyrocketing. You may still want to offer them the incentive to book your property but realize that most will be in a hurry to book any property.
You can use PriceLabs’ Market Dashboard to understand the demand and market trends during the high-demand seasons. Also, be aware of the amenities your guests are looking for and are being provided by your competitors. Understanding this can help you provide your guests with what they are looking for or maybe even get ahead of the market during high-demand seasons. You can also create competitor sets to compare the prices of your competitors. Use Length of Stay and Booking Window functions in our Market Dashboard to clearly understand your guests’ booking patterns.
Utilizing these tools will help you fill your calendar far in advance. With this information, you can specify various customizations according to your market knowledge.
How to attract last-minute bookings to your short-term rental
While it’s a common goal to want your property to book all the time, 100% occupancy comes with its own limitations. You will always face a booking gap in your calendar.
1. Set last-minute discounts on OTAs
Suppose you’ve decided that you want last-minute bookings. In that case, placing proper deals in the proper places is important, especially as your competitors are also likely to apply price reductions to book their expiring listings.
Setting a reasonable last-minute discount has multiple positive ripple effects:
- Any booking is better than no booking; any revenue is better than none.
- Discounts can help you rank in OTA.
- A feature in merchandise pages of OTAs, for example, the deals pages.
You can set these discounts on Airbnb and Booking.com directly.
2. Send your last-minute deals to your email list
As a property manager or owner, staying in touch with your guests is important. You might:
- Constantly be working on improving your property to suit your guest’s needs
- Offer discounts based on holidays
- Have guest-based deals and discounts
You need a way to communicate this to your guests. Newsletters are the best way to do that. You can connect with your guests via email and communicate all your special deals, discounts, and other important things.
A smart option is to have a special email blast for last-minute discounts scheduled around the last few days of the month. Staying in touch via newsletters and providing special offers is an excellent way to increase repeat bookings and last-minute stays.
While staying in touch with past or potential guests, you are also letting them know that you care for their needs, and build loyalty and brand awareness.
A small pro tip is to create an enticing subject line with the discount right there! This will push your readers to open your email and read more.
3. Use social media to promote your last-minute deals
Just like building an email list, it is important to go out there and market your property as much as possible. This way, potential guests would remember your property whenever a need arises.
Whenever you need a last-minute booking, create an enticing deal and publish it on your social media pages. Your guests will now have another reason to book your property because who doesn’t love a good deal?
Another pro tip, create special discounts and packages for guests to book through your social media pages. As an added bonus: Take advantage of the visual media – pictures, videos, etc. – to explain the kind of property you are offering to your guests.
4. Automate your pricing!
In the vacation rental industry, tech gives you a competitive advantage. When you use tech solutions to manage your pricing, you simultaneously analyze your competitors and the demand. A dynamic pricing tool analyzes historical and market data to provide tailored automated pricing recommendations.
PriceLabs is an artificial intelligence-based dynamic pricing solution for vacation rentals. Property managers, vacation rental hosts, and owners globally utilize PriceLabs to use data-driven pricing suggestions and automate pricing to optimize revenue.
You can review present, future, and historical data once you import your listing on the platform. The calendar in our dashboard will show you prices we recommend by taking data from the market for each available night in the future.
PriceLabs bases its price recommendations on:
- Day-of-week trends
- Supply and demand fluctuations
- Booking windows
PriceLabs Dynamic Pricing is about changing the nightly prices of the vacation rental and taking complete control of your pricing. You can also set minimum night restrictions for your vacation rental. Understand how your property performs compared to your competitors using the Market Dashboard and analyze how your entire portfolio performs using our Portfolio Analytics. You can utilize our various customizations to ensure that your pricing constantly fluctuates according to the market requirements.
How to make last minute discounts work for your properties
Last-minute discounts might not always be the way to go, but knowing when and how to apply them is important. Take your time to analyze what you want and also try and understand how the market is situated at that moment.
Only when you have all the information will you be able to ensure that you are not losing out on a booming market.