Taking a vacation is one of the major highlights of the year. Regardless of a customer’s job description, background or wealth, everyone loves to kick back and relax and make the most of a new surrounding from time to time.

Not every vacation has the same price and in most cases, each destination has an adjusting price throughout the year. It is now an expected fact that vacations are more expensive at certain times in the year, and as vacation rentals managers, it is the owner’s responsibility to know the ins and outs of adjusting prices.

Hiking the price too much can result in a loss of business, but doing it just right can be a good steady flow of income which can see your business through the quieter times of the year. But where to start?

Initial analytics


Before beginning to make adjustments to your prices you should first take a look at two of the most important factors which can impact your flow of business, segmentation and supply and demand.

Starting off with segmentation, it’s good to know your market and who you are catering for. At certain points throughout the year, you may be more likely to get a specific type of customer than others.

For example, during the Summer you are likely to see an increase of larger families who want a longer stay at their vacation rental property. However, through the rest of the year, there may be more small families and couples, of all ages, who require a shorter vacation over a midweek or weekend.

Supply and demand, or rather demand and supply in this instance, can also be very insightful when it comes to price adjustments. As an example to look for, if your properties are fully booked throughout the peak season and only 25 – 30 percent full at other times of the year, it is clear you can make bigger increases for the peak seasons as so many customers are purchasing those stays.

Introducing the levers

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Levers are aspects that you can play with in order to try and increase the number of capacity bookings throughout the year. Some constraints also come in to play, which we will look at in a moment, but making adjustments on the levers can see some significant changes into how much money a vacation rentals business makes every year.

Examples of levers include the length of stay, nightly rates, length of stay discounts and fees. Let’s look at each in turn.

Length of stay (LOS)

A big game-changer for some rental properties, simply changing options for length of stay can make a difference in the type of customer you are attracting. By offering shorter stays you can attract different groups of tourists who wouldn’t really be interested in a property offering just two week stays or longer.

Length of stay discounts

Discounts can be the difference between breaking even for a month or making a minus. Some months of the year are notorious for not really being vacation months but by offering discounts there is still a chance to make some money from those tourists looking for a cheaper getaway.

Nightly rates

Factors such as the uniqueness of the property, location and surrounding attractions can all make a difference to nightly rates, but a decision to be made on whether to offer fixed rates or not can make a difference on whether the property fills to capacity.


Some extra money can be made from fees, but at the same time, property managers have the power to make adjustments here in order to fill up the properties instead of having them empty for half the year.

Now we know of some of the most common levers when contemplating price changes for vacation rental properties, here are the constraints which can also affect adjustments for vacation properties.

Constraints are the factors which affect the boundaries in which the levers can be adjusted. Often boiling down to distribution, owner preferences and the operations segment, constraints restrict some of the freedom property managers have but they are put in place for specific reasons. Let’s start looking into how these elements come together to influence the price adjustments for rental properties.

Minimum stay restrictions


Offering minimum stays is an example of a practice that is influenced by the constraints of both owner preferences and distribution. Setting the number of nights per stay can make a big impact on revenue but segmentation can kick in here to get your capacity filled up.

Offering weekly bookings

Much more traditional in the countryside or coastal destinations, Saturday to Saturday bookings are a popular offering for parties who require a longer amount of time in one place. Such as groups who are heading to local theme parks.

This type of set up makes a lot of sense for some rentals businesses as it gives an element of certainty as to how the business will run. Check-in days will be consistent and the turnover will be a clean-cut procedure. Making this option ideal for repeat visitors. However, there is accelerating demand for short stays, meaning a vacation rentals business could potentially lose out on some of the income to be had there.

Segmentation and filling in the gaps

Making sense of the demand for vacation rentals can assist in making adjustments in providing minimum stay restrictions. As important as it is to cater to groups and large families looking for a longer stay, it is also crucial to make offerings to shorter stays to maximise occupancy and keep the turnover moving throughout every season.

The peak season, for example, should offer a vast amount of long-stay offerings but at the same time, leave out the restriction for a Saturday to Saturday. Offering longer stays for perhaps a fortnight can open up opportunities for larger groups at a more functional operational cost. During the off-peak season, it makes sense to offer shorter stays as there are many smaller groups of people who just want a quick escape for a few days.

Getting dynamic with dynamic minimum stays can help you to fill in the gaps throughout the off-peak seasons. With specified minimum stays in place, there can be count down deals to help fill up to capacity. Late bookers are usually parties after a last-minute escape so they are highly likely to book a shorter visit. This means that bu reducing the minimum stay, you are opening your vacation rental business to some of the potential revenue from this segment of the market.

Incentivizing longer stays


Setting prices for a length of stay can differ depending on the property itself and any of the extras provided as part of the vacation rental experience. However, there are some options to consider to help your business make the most of the facilities and operational costs which can prove to be a constraint.

Shorter bookings

It can be expensive for your business. As a whole, offering short stays can help you keep your rentals properties at capacity for longer due to the demand for shorter stays. However, as a business it can be more costly, operationally, to keep on catering towards a constant flow of new guests. One way of keeping the option and perhaps adding a deterrent is to add premiums to persuade visitors to opt for the longer stays.

Offering discounts

A method used by many vacation rentals companies, offering discounts for longer stays not only keeps your properties fuller for longer but it also makes the most of any operational costs.  Although it may mean a reduction in a daily rate for rental properties, it will be much easier for staff to maintain and operations will be able to run much more smoothly.

Avoid double bookings

At all costs, you should avoid double bookings especially if you are going to activate extensions on the current guests’ stay. Double bookings arise mostly because people use multiple vacation rental websites to list their property, and rightly so. However, the downside to this is that booking on one site may not show up on another. As a result, the dates may look to be available and an extension activated only for the cleaner to turn up and find the place occupied which is when you realise the reason the cleaner was booked is that new guests are arriving via booking on another website.

However, there is a fully automated solution to all of this and it is very easy to set up. Have a look at into what is called the automated channel manager software.

Setting nightly rates


Often a game-changing decision for customers, having the right nightly price is essential for capturing business and keeping properties at a profitable level of capacity. There are a handful of different strategies to try out so let’s look at each in turn.

Having a fixed rate

Often set or readjusted once or twice in a year, this pricing system can be easy on the constraint of distribution. Many businesses set an adjustment on their fixed rate after the peak season has finished, sometimes depending on the revenue accrued throughout that time.

In times where taking it easy doesn’t always reap in the rewards, using a fixed rate may not allow you as a business to cash in on changing trends in the market or making the most out of a local event that could bring in extra revenue for a period of time.

Getting dynamic

Not all rental businesses have the funding for a specified team of analysts but for those who can this kind of pricing can be easy to integrate.

Specially recruited team members can spend their time looking into booking patterns, or abnormal behaviours, which reflect on the amount of capacity being filled throughout a set time frame. By assessing these differences, adjustments can be made on pricing to make the most out of every opportunity presented to the business.

Advancing to automatic

Largely implemented in the modern market, automatic dynamic rates alter themselves throughout the year. Needing an initial set up by owners or property managers, data is inputted into a system regarding booking patterns and comfortable zones for pricing where the system is then switched on to autopilot.

The program will then go on to automatically adjust the prices for the accommodation to suit the demand from potential customers.

However, along with how useful and beneficial automatic dynamic pricing is for a vacations rental business, there is a word of warning to not set the limits and forget about them. Although the system is highly capable of enabling demands inputted by the property manager, the element of supervision should never be overlooked.

Computers do not have the human insight so they cannot account for or adjust to certain events or changes in the market. They simply make the adjustments they are told to make in advance. By making regular supervisions for the automatic system, owners and their teams can make necessary adjustments to compete more healthily with nearby competitors and of course account for any unpredictable eventualities.

Monitoring the business


Having a series of methods and processes in place to adjust and carry out any price changes throughout the year is of course only half of what you need to do in order to keep your vacation rentals business afloat. In addition to this, you will also need to monitor the changes and adjust accordingly at later dates throughout the year.

There are different graphs and reports to look through, many of which will reflect as year on year comparisons. This could mean looking at last August’s final figures against this year’s income. By comparing the two years, and accommodating for any price changes, you can reflect on whether the price changes have made ample changes to the amount of revenue being made. From there, further changes can be looked at to implement the following year and so on.

In a similar manner to look at the past facts and figures for the rentals business, reports for the future can help too. A useful insight is to look into current demands for the following year to see what reflections the prices have on upcoming bookings. This different report will be able to give clear indications as to where adjustments are needed to fill up the properties and make the most of any operational costs being made throughout the duration of the season.

Now we’ve been through all these need to know factors you can start making plans to accurately set adjustments. Take in each factor at a time and decide on a path that is best for your business and of course for you to see an impending increase in revenue.