7 Things You Need to Know About Revenue Management

Starting out in the beach rental business, setting the perfect nightly rate may seem like a breeze—just pick a number and you’re good, right? Well, it turns out it’s a bit more of a puzzle than that. There’s a lot that goes into finding the sweet spot that attracts guests and maximizes your earnings, especially in a bustling market with over 16,000 beach rentals.

Firstly, the type of Emerald Coast beach rental you offer and how it stacks up against the competition matters. The beach rental market is dynamic, changing not only across different locations but also over time. Even when you think you’ve nailed down a baseline price, there’s more to be done. Setting the right price isn’t a one-and-done deal; it’s an ongoing process.

We like to call this continuous analysis and adjustment of pricing to optimize earnings “beach rental revenue management.”

What is beach rental revenue management, and why does it matter?

In simple terms, it means strategically setting the perfect price at the right time for the right guests. It involves constantly tweaking rates to ensure your pricing aligns with market conditions, maximizing your beach rental’s occupancy and revenues.

This approach can truly transform your Emerald Coast rental investment, taking it to new heights. And the good news is, there’s a method to the madness. Here are seven steps to unlock your beach rental’s full potential:

Step 1: Choose the right pricing tool

Navigating the multitude of factors influencing your beach rental pricing can feel like solving a million-piece puzzle. It’s a lot to handle. Fortunately, the tech-savvy world of our industry offers various options for beach rental revenue management and dynamic pricing software to ease the burden. These automated solutions use historical and real-time data, analyze similar listings in your area, and consider real-time demand to adjust your price on the fly.

If you’re serious about maximizing your Emerald Coast beach rental earnings, consider picking one of these tools—they’ll take 70-80% of the workload off your shoulders.

Here’s how they can help:

• Adjust rates based on beach rental demand and occupancy.
• Find the best price during both peak and off-peak seasons.
• Identify the optimal length of stay based on seasonality.
• Handle orphan days (those tricky days between bookings).
• Identify major events taking place in your beach rental area that you might not be aware of.
• Assist in managing last-minute cancellations and re-bookings to minimize revenue loss.
• With several options available, choosing the best one can be tough. Our favorites are Wheelhouse, Pricelabs, and Beyond.

Quick rundown:

Beyond: User-friendly, ideal for those who prefer a “set-it-and-forget-it” approach. While it may not offer extensive customization, it handles many adjustments effectively.

PriceLabs: Powerful and flexible, providing the most customization options. It allows you to truly maximize your revenues with some investment of time. PriceLabs also integrates with various other systems, giving you control over your pricing strategy.

Wheelhouse: Positioned in between the first two, Wheelhouse is great for revenue optimization. Expect to review and adjust settings regularly to track performance and make necessary tweaks. It also allows integration with other tools for enhanced efficiency.

Remember, any software is only as good as the user who sets it up. If you want to maximize your beach rental earnings, treat the task like a part-time job!

Also, keep in mind that these tools come with a cost, but it’s a relatively small investment. Generally, you can expect them to deduct around 1% of your gross bookings (Beyond) or under $10-20/month (Pricelabs).

2. Identify Your Competition

Creating a comp set, or your vacation rental’s squad of competitors involves pinpointing a bunch of similar beach cabins or properties that share the same vibes as yours—similar location, size, and amenities.

By zooming in on this select group, you get to measure up your beach rental against the real competition. The aim? Keep a close eye on their game and tweak your strategy to make sure your beach cabin stays in the running.

To assemble your comp set, there are cool tools in the market, like Beyond, PriceLabs, and Wheelhouse. These comp set wizards bring awesome data analytics to the table, helping you make savvy decisions.

Here are six cool things to factor in when building your beach vacation rental’s comp set:

• Amenities: Scope out the cool stuff you’re offering and stack it up against similar beachy properties nearby.

• Size and guest capacity: Check out the digs of your beach cabin and see how it sizes up against the other cool spots.

• Location: Hunt down properties in the vicinity to get the lowdown on the local scene.

• Performance: Dive into the numbers—revenue, average daily rate (ADR), and occupancy rate. The tools we mentioned spill the beans on the performance data, even for your rivals.

• Quality: Take a peek at the ratings and reviews for your place and the others in your comp set. It’s like a guest satisfaction report card.

Building a comp set is like having a secret weapon to make decisions backed by data and keep your beach rental game strong. Armed with this info, you can dial up your performance and amp up the guest experience.

3.  Establish Pricing Metrics

When you’re dialing in those pricing metrics for your Emerald Coast vacation rental, you’re essentially sketching out the game plan for deciding what a night in your cozy cabin is worth. It starts with your baseline price, and trust me, it’s not just about numbers—it’s a mix of performance metrics and a dash of gut feeling. Our beach inventory is like a batch of sunsets—once a night passes without a guest, that’s revenue sailing away, and every dollar counts. Yet, there’s also a sentimental value; you don’t want to drop below a certain price because that’s the vibe you believe your beach haven brings.

Once you’ve set a minimum rate, treat it like a sacred pact—never dip below it.

Now that you’ve got your comp set, you’re armed with the insights to fix a competitive base price. Take a step back, put on your neutral observer hat, and look at your beach cabin through someone else’s shades.

When crafting your metrics, keep in mind that the tides of occupancy change with the seasons. So, set both minimum and maximum pricing. Roll out the minimum rates during the quieter times or to fill those last-minute beachfront gaps. It’s a smart move to push it as low as you comfortably can, respecting the no-loss rule.

Beyond the ebb and flow of seasons, there are beach bonanzas like special events and holidays. Weekdays? They dance to a different tune than on weekends. This is where a dynamic pricing tool becomes your beachside assistant, automating rates across all your channels.

And here’s the golden rule: everything can, and should, be tweaked over time. Experimenting with different nightly fees is like catching the perfect wave for your pricing strategy. Once you roll out a new rate, be a detective—study the data, read the market vibes, and track the impact on your booking rate.

4. Customize with Specific Rules

When it comes to sculpting the perfect pricing strategy for your Emerald Coast rental, it’s like crafting a bespoke wardrobe—tailored to fit your unique style. Let’s dive into some personalized rules that can amp up your overall approach:

• Raise the Curtain Outside the Norm: Ever thought about cranking up the charm (and the price) for bookings that fall outside the usual booking window? Picture this: a special touch for those who plan ahead or crave a spontaneous beach escape.

• Last-Minute Love: Got some sandy spots on the calendar within three weeks of check-in? Time to sprinkle some last-minute discounts and lure in those spontaneous souls looking for a slice of beach paradise.

• Orphan Discounts—Adopt a Gap: Meet the “orphans”—those short gaps in your beach rental calendar. Show them some love by trimming the price tag. It’s like adopting a little beach break between longer love stories.

• Minimum and Maximum Stay Swagger: Set the stage with the ideal length of stay for your beach haven. If the norm is a 4.5-day beach rendezvous, but there’s a clamor for quick escapes, why not introduce a 2-night minimum stay? It’s like tailoring your offerings to suit every vacation flavor.

• Holiday Harmony: Give your cleaning staff a holiday hug by blocking check-ins on major celebrations. It’s not just business; it’s family time. And consider tweaking the minimum stay to let everyone savor the festive vibes.

• Weekday Whispers: Weekdays don’t get as much beach love, right? Time to change that narrative. Whisper sweet discounts on weekday stays to woo those seeking a quieter slice of beach bliss.

• Longer Stay Luxuries: Keen on luring in those snowbirds searching for an extended winter retreat? Extend a warm invitation with special discounts for a week or more. Not only does this cozy arrangement fill up those winter wonderland slots, but it also streamlines the operational process. Take note: Our snowbird market doesn’t witness a flurry of week-long wanderers, making this offer an exclusive gem!

Once you’ve decked out your beach rental with these personalized rules, take a step back, grab your beach hat, and analyze their impact. Fine-tune your pricing like a maestro with a data-driven symphony. Your beach rental is not just a place; it’s an experience, and the right pricing is the key to unlocking that coastal magic.

5. Connect to Channels

Alright, let’s talk beach rentals—it’s not a “build it, they will come” situation. In the digital wave, bookings ride the online tide, so casting your beach haven’s net wide is key. Listing on multiple platforms is like setting up beach umbrellas on different shores—more exposure means more guests catching those seaside vibes.

Here’s the lowdown: Online Travel Agencies (OTAs) are the gatekeepers to the beach party. They draw millions of beach lovers daily, so hitching your beach rental to these platforms is your golden ticket.

Platform Picks:

1. Airbnb: Think of Airbnb as your beach buddy that takes care of the nitty-gritty. It’s user-friendly, handles payments, and offers insurance coverage. Plus, it’s where most folks set sail when hunting for their perfect beach spot.

2. Vrbo: Vrbo, the American cousin of Airbnb, shines in the world of traditional vacation rentals. Bonus: listing here gives you exposure on Expedia and Hotels.com—talk about riding the wave of visibility.

3. Booking.com: While Booking.com is like the hotel hotspot, it’s also a solid option for beach rentals. If Airbnb and Vrbo are your main docks, adding Booking.com to your beachfront portfolio broadens your guest horizons.

Remember, when you craft your online beach rental listing, it’s like painting a picture of your coastal paradise for the world. Splash it with comprehensive and spot-on details about your beach cabin and the rental vibes.

6. Watch Your Performance Closely

Now that all the pieces are in place, it’s time to implement effective strategies to attract bookings and meticulously observe the outcomes.

• Strategic Pricing Insights: Initiate by conducting a thorough analysis of comparable rentals in your vicinity. Establish your nightly rate marginally lower than comparable properties to strategically position your beach rental as an appealing option for prospective guests.

• Promotional Boost for Initial Bookings: To catalyze momentum during the initial phase, consider offering a 20% discount on the first three bookings facilitated through prominent platforms such as Airbnb and Vrbo. This targeted promotional approach capitalizes on these platforms’ algorithms that favor new listings, particularly in the absence of reviews. Monitor booking activities closely during the initial days and make judicious pricing adjustments as needed.

• Strategic Elevation of Pricing: While maintaining competitive pricing is crucial initially, it’s imperative not to perpetually undervalue your offering. After garnering a substantive number of positive reviews, reserve the aforementioned pricing strategy for specific periods, such as the low season. Positive reviews fortify your property’s credibility, affording you the latitude to strategically experiment with adjusting prices in tandem with seasonal demand fluctuations.

In summary, let your pricing strategy be a dynamic and calculated orchestration. By adopting a professional approach, your beach rental can navigate the competitive landscape with strategic finesse, leveraging promotions and pricing adjustments to optimize bookings and elevate overall property value.

Step 7: Review everything on a schedule

As we’ve emphasized, revenue management is not a one-and-done task; it’s a continuous journey. To truly maximize your investment in that beach cabin of yours, consider it like a weekly check-in with an old friend. Set a reminder, grab your virtual beach hat, and let’s dive into some insights from our revenue management crew:

• Stay in the Beach Rhythm: Make it a weekly ritual to check in on your occupancy and rates. Take a leisurely stroll through the market, compare notes, and tweak your rates as the tide of demand ebbs and flows.

• Insider Tips from Our Revenue Beachcombers: If your 60/90 day vacancy rate is trailing behind the market, consider a slight drop in your base rate—maybe 5 or 10% to catch a fresh wave of interest.
  On the flip side, if your vacancy rate is riding the high tide, elevate your base rate by 5 or 10% to signal the premium experience your beach haven offers.
  Feeling the beach vibes for the 60/90 day stretch, but the 30-day gap is looking a bit lonely? Throw in a manual discount for the next month to fill up that beachfront calendar.

• Elevate Your Beach Oasis with a Dedicated Revenue Maestro: Navigating the sea of revenue management can get as tricky as riding the waves. While the right pricing tools give you a swell boost, imagine having a savvy companion—your dedicated revenue manager. At Emerald Coast Vacation Rentals, we’ve got a pro who dives deep into market and booking data. Her mission? To craft a symphony of informed decisions that elevate your cabin’s revenue potential.

Trust us, with a revenue maestro fine-tuning your pricing strategy, you’re not just competing; you’re soaring. Your beach cabin’s success is destined for the stars, and you’ll be riding the wave of triumph.