Typically, the top concern of most of the people interested in your Vacation Rental property is the nightly pricing. To a traveler, it is the most important determinant of whether your property is worth booking or not. This does not always mean that the lower the price, the greater the number of bookings. The price needs to be ‘right’ instead of being too high or too low.
Further, your price will vary from time-to-time and season to season. You need to analyze the market and price your VR accordingly. Weekday vs. Weekend, Peak-time vs. Off-peak time, Time of special events, etc. all are important considerations when you are determining the price of the property. The balance is being competitive AND profitable at the same time.
During a high-demand period, you may be able to even charge as high as four to five times your normal rates. Therefore, knowing what to charge, and when is of great importance. The AirDNA calculator and their whole suite of related product offerings such as the AirDNA Rentalizer is a powerful platform that comes to the rescue.
AirDNA is a vacation rental pricing tool that helps you analyze the competitive pricing scenario, demand, and many more metrics. These metrics will even help you decide the right price to charge on a specific day of the year. If you do not analyze the vacation rental data correctly, you could be missing out on a lot of profits or you may even accidentally set your price so high that you won’t get enough bookings. So, let’s explore this tool in detail. When you’re ready to check out the AirDNA tools for yourself, just click here to be instantly redirected.
What does AirDNA’s dynamic pricing tools offer?
AIRDNA provides analytics into the short-term vacation rental space. Naturally, the approach is data-driven. It offers the MarketMinder tool which gives deep insights into properties listed on Airbnb and VRBO which are two of the largest online travel agencies (OTA’s). It also offers interactive maps that help in understanding the performance of different neighborhoods and properties so that you can get an idea of the price charged by similar properties and competitors in the area. This is the first step in properly pricing your property.
It is a real-time dynamic pricing tool that recommends the best price each day. This recommendation is customized to your property’s performance. Further, it also incorporates the competition. It has data of more than 80,000 cities in the world. Therefore, no matter where you are, you might be able to find relevant information on competition and market.
Not only does it tell you about past and current prices, but it also gives projections of future prices for Airbnb. You can understand how the price will move and price your property accordingly. These projections are for six months in the future. You can compare the same to the previous year’s performance which will help in formulating your future pricing strategy.
The second tool that the platform provides is rentalizer. This is a browser-based tool. You input property features such as the street name, number of bedrooms, bathrooms, and people accommodated. Based on this information, the tool analyzes the property. This tool is used by those who are in the process of converting their property into a VR.
This vacation rental pricing tool is used to calculate the potential earnings from such a conversion. It uses the Airbnb’s data to calculate the expected profits but not the exact figure but will rather give an accurate ballpark. Along with the profit numbers, annual revenue, average daily rate, occupancy rate, 12-month cost projections, and competitive analysis are also provided.
Metrics offered by the AirDNA’s pricing tools
Close to 25 Metrics are offered in the Marketminder and Rentalizer tools. Some of these metrics are as follows:
This is simply the revenue per available room. It is calculated by dividing the total revenue by the total number of rooms. This tells us the revenues generated by the property after incorporating the vacancy rate. This number can be calculated for the past to understand the trend and for the future to determine a pricing strategy.
It shows the movement in price per night over the year. It helps in understanding, what time of the year will lead to higher revenues. It also tells how are competitors pricing throughout the calendar. This will help your property stay relevant. If the current market rate is higher than what you are charging, then you will be missing out on profits. You can add your property here and price it using the demand score and market-rate metrics.
You will input details such as your region, bedrooms, and other information. The results will show which is the best month for your property and it will show past monthly trends of RevPAR ranging from high to low. Further, it will also show the weekend vs weekday price per night. This gives you an idea about the peak and off-peak seasons so that you can charge a higher price in the peak season and lower prices in the off-peak season.
This is a trend analysis metric. It compares two metrics, Available Rate and Booked Rate. The greater the difference between the two, the higher nightly pricing is out of parity. The available rate is the rate your property is currently charging. Booked rate is the rate at which similar properties are getting booked. If mispricing is very high, then you are missing out on profits and bookings by charging a rate that is too high or too low.
This is a demography analysis tool. It helps in understanding the type of guests who prefer your property based on metrics such as domestic or international, social medial presence and language spoken by them. This gives you an idea of target audience. If the guests are from an affluent region, you may charge a higher rate and so on.
This is a property-specific metric. Once you receive access to the tool, you can upload your properties and you can analyze the demand score for your home on different dates and at different price points. This helps you figure out how to increase the demand score for your property based on price and enable you to formulate a future pricing strategy.
There are many such metrics, data, and reports provided by these tools. However, don’t get boggled by so much information. Use only the metrics that are relevant for your property. You may even use the auto-generated prices if you don’t want to stress about the details. At least that will prevent you from going too far off the market rate. Gradually, you will be able to understand what works well for your property as bookings increase or vacancies become a problem.
Subscriptions and Charges of This Vacation Rental Pricing Tool
There are some free offerings, while there are a few paid offerings too. Let’s explore both.
This only requires you to register and login to the website. It gives you the performance metrics of existing properties in 80,000 cities. It also gives you unlimited searching capability on the rentalizer tool. However, you don’t get any reports. You might have to analyze the data yourself. It could be time-consuming, and the comparison might not be very thorough.
These range between $19.95 and $99.95 per month based on the number of active listings in your concerned market. You get real-time pricing insights, historical trends, property revenue, and occupancy information, and Airbnb benchmarking. This also includes reports, analysis, and other supporting materials. This makes your pricing much more accurate and our recommendation is that you get a subscription since mispricing just one or two nights per month, can easily pay for the relatively small cost. Information is KING!
Suppose your property pricing requires a different combination of metrics. Here you may request a quote to create a customized package which is useful if you have many properties. This method enables AIRDNA to create a bundle as desired and will charge you accordingly.
Additional Offering of AirDNA Tool
Those looking for real estate investment in the VR space can make use of the Investment Explorer tool. This gives a regional analysis of revenues, profits, and occupancy rates of the properties. This is useful for those people who want to choose a particular market in the US and abroad.
There are state-wide subscriptions, whole country subscriptions, and Enterprise offerings. Each has a different subscription charge ranging from $199 to $499 per month. As the cost suggests, this is more suitable for bigger VR investments.
Limitations of AIRDNA
One small drawback of using AIRDNA tools is that it specializes in short-term vacation rental properties. Therefore, you might not gain meaningful insights if you want them for long-term VR properties.
However, as per the claim of AIRDNA, short-term rental properties are three times the number of long-term properties. Further, the data set of AIRDNA includes booking activity of more than 10 million properties across the globe. This is a sufficient sample for any thorough analysis.
Our hope is that we were able to familiarize you with the key features of the tools offered by this vacation rental pricing tool. We believe it is an extremely valuable tool that will easily pay for itself as you choose the correct price or analyze the market. You can combine the research offered by the tool with your own analysis and come up with the best suitable pricing scenarios. To go directly to the AirDNA site, please click here.
Remember, your revenue depends on the price and profits on revenues. Make the most of the peak-seasons. However, the most important metric is the rate analysis. If you combine the rate calendar information and the booking trends, you will come to meaningful conclusions about your pricing strategy.