Vacation rental property managers know that hotels, airlines, and successful property management companies use revenue management software to increase occupancy rates and billings, but don’t think they possess the knowledge or have the budget to implement it themselves.
The book “The Theory and Practice of Revenue Management” states the true innovation of RM (revenue management) lies in the method of decision making – a technologically sophisticated, detailed, and intensely operational approach to making demand-management decisions.
The truth is, a basic understanding of revenue management fundamentals combined with easy-to-use software that integrates with your property management system is all it takes to achieve the highest possible rates for your properties.
Revenue Management Software for Vacation Rental Properties Gives Competitive Edge
Some may contend that proper RM involves only three basic components: supply, demand, and price point. But this article on Revenue Management Essentials asserts that it more accurately encompasses pricing, product selection, expense reduction, and marketing.
Revenue management software helps increase occupancy while maximizing the revenue from every property.
The purpose of revenue management, then, is to balance all these components and realize optimal revenue for every available property. For vacation rental managers, this means that each component can be modified at certain points to get a true competitive edge in the marketplace.
Therefore, if RM was performed manually it would resemble a chess game with all the pieces in constant motion. Luckily, vacation rental property managers have a simple solution.
Revenue Management Software Eases the Way
With the advent of technologies that enable instant booking, rapid price comparisons, quick-as-lightning review and feedback, and mobile browsing, old methodologies no longer provide a competitive advantage in the vacation rental business.
To boost bookings and billings, while simultaneously managing a property and looking after guests, property managers need revenue management software to automate the process.
1) It enables real-time analytics
Do you really need real-time analytics? The answer is “yes”. Access to real-time data makes the manual process of market research obsolete. With no more need for tedious comparison of rates, think of the time-savings.
2) It enables automatic price optimization
Up-to-the-minute comparisons allow more effective setting of another component of revenue management: your rates. With revenue management software, you can set pre-determined parameters based on your break-even points. Then, the software can automatically adjust your price points up or down depending on an analysis of current market conditions, your existing inventory, and your pre-set parameters. In this way, your prices are always competitive, without the need for you to manually change prices with every market fluctuation.
3) It integrates with your channel partners and vacation rental website
Effective revenue management must occur across the board to have an impact on your overall profit. This means that any modifications and adjustments you make in pricing must carry across all booking channels. Software can enable that process, thereby streamlining your efforts to best effect.
4) It is responsive
Travelers expect and demand booking capability and easy information retrieval from their desktops, laptops, tablets, or smartphones. A TripAdvisor study revealed that just under half of U.S. travelers, and even more in Europe, are “Connected Travelers” and twice as likely to make travel bookings on a mobile device.
Whether it be your vacation rental website or a rental listing portal such as tripadvisor.com, not only do prices have to be competitive and uniform, the platform must deliver the same experience regardless of the computing device used to make bookings.
The Revenue Management Software Takeaway
To gain a competitive edge in the vacation rental market, revenue management software should be one component of a comprehensive vacation rental management solution that integrates online booking, accounting, channel management, and marketing.
It removes the need for manual analysis of rates, market research and time-consuming changing of rates. Kigo Revenue Management is a sophisticated, automated tool that takes the time and guesswork out setting the optimum rates for your properties and updates them across your properties, websites and portals.
Want to read more? Download our ebook: The Kigo Guide to Revenue Management. It’s the definitive guide on understanding how to make revenue management work for you! To see the Kigo integrated vacation rental software solution in action, request your free trial today.