The Future of Vacation Rental Pricing

If I have learned anything over the past 15 years in the vacation rental industry, it is that change is a constant. This might not be as evident from the consumer (guest) side as it is from the owner/manager side, however, it is the changing market dynamics and guest expectations that are really driving this change.

While certain things like smart home technology, mobile communication tools, and new software systems are great for streamlining logistics and operations, they do not really drive the needle when it comes to pure rental income growth. With all the new operational tools we’ve seen come out over the past few years, one thing that has been frustratingly missing has been something that can help optimize and adjust rental pricing on a data-driven level. That is until now.

Over the past year and a half, we have been analyzing a revenue management tool that will help us optimize our pricing specific to each home and each week of the year, with the ultimate goal to achieve maximum annual revenue and occupancy for your Topsail Island vacation home.  As you can imagine, it’s getting progressively harder to price a home out more than a year in advance. Our goal is always a full calendar with repeat guests that treat your home as their own.  However, as your professional manager, it is also our job to make sure we are doing everything possible to accurately price your home to maximize the return on your hard earned investment. So, what’s it all about?

How Does it Work?

Similar to the revenue management tools that power hotels and airline pricing, this tool allows us to set and manage participating home’s rates based on a dynamic algorithm that tracks supply and demand for every week of the year, as well as comparable market factors particular to a home: special events, seasonality, day of the week, etc. The data used to analyze and adjust pricing comes from 3 main places: 1) our own historical data for your house (i.e. rack rates), 2) similar properties within our own portfolio, and 3) similar homes from the major marketplace OTA’s (, VRBO, AirBnB).  The “rack rate” that is established is generally what we already have in place, which means it is what the increases or decreases are based off.

What Does This Mean For You?

When using a more data-driven pricing strategy, as a homeowner, your rates would be more fluid in nature based on minimum and maximum levels that we control. Rates for a given span in the future may change day to day based on the algorithm powering the pricing tool.  Be advised we can set conservative minimum pricing rules for each home in this system, so you will not see prices that fall below what we have agreed upon/what you have seen in the past.  In fact, the tool tends to price higher than we would anticipate for some periods, especially during holidays and high demand local events.

Why The Change?

We are entering a new age in the vacation rental marketplace of increasing pricing transparency and eCommerce speed expectations for consumers.  As with all change, this poses a new challenge for us, and we do not take this industry evolution lightly. There has never been a time where we have had access to some much specific data and information as we do today in the vacation rental market. By combining this data access with our oversight, we feel this combination will give us a huge competitive advantage over the rest of the field on Topsail Island.

Please note, we will have more information on this very soon. Our goal is to get everything ready for 2019 by October so we can hit the ground running and start confirming your bookings for next year!

Mike Harrington, President/Owner