Seasonal and Weekend Pricing

Short-term rentals require juggling occupancy rates and nightly prices and to do this – a dynamic pricing model and optimized inventory are key. Our software’s Seasonal and Weekend pricing module helps set a base price and then adjust multipliers to maximize revenue and occupancy. 

 

Why did we choose to address this problem?

 

Let’s look at an example to understand the need for this module: 

 

  • Assume two property managers/Operators who handle a similar portfolio: 
  • Number of units each of them has – 2000 
  • Channels they are listed on – MTL Booking Portal, Airbnb, Booking.com, Trip.com, Makemytrip, etc. 
  • Pre-requisite – Both the operators are aware of the fact that peak Seasons like the Chinese New Year, Christmas, a concert in town, and an F1 race are occasions when rates need to be high because of the high demand. 

 

Similarly, rates need to be lowered when occupancy dips to attract more tenants. 

Let’s delve into some numbers – 

 

Property Manager 1 – John: 

 

Month Occupancy Units occupied Revenue from Occupancy
January 2024 86.00% 1720/2000 $45,000
February 2024 80.00% 1600/2000 $48,000
March 2024 84.00% 1680/2000 $37,000
April 2024 79.00% 1580/2000 $56,000

 

Property Manager 2 – Clara:

 

Month Occupancy Units occupied Revenue from Occupancy
January 2024 86.00% 1720/2000 $94,600
February 2024 80.00% 1600/2000 $72,000
March 2024 84.00% 1680/2000 $84,000
April 2024 79.00% 1580/2000 $55,300

 

The only reason for the significant dip in Revenue for Property Manager 1 (John) is: 

 

  1. The challenge to constantly keep adjusting rates on multiple platforms: John failed to update the revised prices on all the platforms that they are listed on. With multiple bookings and multiple channels, the loss in revenue can be significant (as much as 65%  in this case)

 

Amidst the busy, packed days that property managers go through, manually updating all of the pricing for all the categories (Private, Twin, Studio, etc.) on all channels is cumbersome and time-consuming and certainly not the right approach. 

 

What is the ideal way to approach this problem?

The ideal solution is to set multipliers that will automatically change the price rather than the constant change in rates for every category. 

 

Property Manager 2 (Clara) achieves this by setting all of this information once using our system. Consequently, all of the platforms that she lists her rooms get updated ensuring no loss in revenue. 

 

Clara achieves this by following the below steps on our system: 

  • Creating a base price of the category on the system. Think of this as the minimum selling price of the category.
  • Since she knows when the demand is going to peak, she can set the Seasonal and Weekend multipliers over time. 

 

For example, 

1/12/2023 – 18/01/2024

Category Base Price Seasonal Multiplier Weekend Multiplier Final Price Reason 
Single  $30/night 1.4 1 $42 High Demand due to Christmas & New Year
Double  $40/night 1.4 1 $56
Studio $50/night 1.4 1 $70

 

1/04/2024 – 30/04/2024

 

Category Base Price Seasonal Multiplier Weekend Multiplier Final Price Reason 
Single  $30/night 0.8 1.1 $26 Low Demand Post Summer Break
Double  $40/night 0.8 1.1 $35
Studio $50/night 0.8 1.1 $44

 

16/09/2024 – 24/09/2024

 

Category Base Price Seasonal Multiplier Weekend Multiplier Final Price Reason 
Single  $30/night 1.5 1.5 $67 High Demand due to a concert in town
Double  $40/night 1.5 1.5 $90
Studio $50/night 1.5 1.5 $112

 

Such Multipliers can be set for multiple date ranges spread over time and the operator can choose to adjust them if the need arises. 

 

The Final price is now automatically updated on all the channels and the booking portal enabling prospective tenants to pay accordingly.  

 

How can an operator maximize the use of this module?

 

  1. If your Occupancy rate is low but your Average Nightly Rate is high, you may need to consider whether your prices are discouraging potential bookings.  
  2. Conversely, a high Occupancy rate with a low Average Nightly Rate might indicate that you could earn more by adjusting your rates upwards.

 

Ultimately the adjustment in prices will be based on significant factors such as demand, market conditions, competitive pricing etc. Using Property Management Software at least removes the complexity of setting these prices for every category every time. 

 

Calculation behind pricing:

 

Base/Default Price = $30

Seasonal Multiplier = 1.4

Total Amount customer has to pay = 30*1.4 = $42

 

Base/Default Price = $40

Weekend Multiplier = 0.8

Total Amount customer has to pay = 40*0.8 = $32

 

Base/Default Price = $50

Seasonal Multiplier = 1.5

Weekend Multiplier = 1.5

Total Amount the customer has to pay = 50*1.5*1.5 = 105

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