There has been a lot of recent buzz in the vacation rental industry around revenue optimization. In short, revenue optimization means getting the most revenue for your vacation rental considering market conditions. There are even a few companies who now specializes in revenue optimization. These companies offer addd-on software solutions that connect to your API channels and adjusts your rates based on some special formula.
At Tokeet we believe that revenue optimization is a great idea. However, we differ in opinion on how that can be achieved. The most notable companies who offer revenue optimization scrape the internet or various channels for comparable prices and, given other market conditions like events and conference in your city, determine the optimal price for your vacation rental each day. While this sounds exciting at first the results are not always stellar. There are a few key problems with this approach.
- No two vacation rentals are created equal. In the case of hotel rooms the product being offered is very homogeneous, sometimes painfully so. So the approach of blindly price comparing works well. Also, in large urban environments where your rental is an apartment or condo then it may be easier to compare your apartment to another. However, this is never an apples to apples comparison as your rental may have some key and important features which others lack. When you move into less urban areas where your rental is a house or villa then this approach completely breaks down.
- It lacks sufficient user input. Most of these solutions do not allow for sufficient input by the owner or property manager when determining the price and thus the resulting price is often well off the mark.
Our approach is completely different and rooted in the idea that the simpler solution is often the best. We believe that you know best what you can and cannot charge for your rental. We also believe that, if you've been renting long enough, you know your market better than any computer program. Tokeet's Dynamic Rates feature allows you to set the price range for your rental across any period of time and decide how this price changes as your inventory changes. This results in a solution similar to what airlines use to fill seats. You start with a lower price then, as your inventory changes and you hit a specific occupancy threshold, your price is automatically increased to the high price.
Tokeet handles all the hard work for you. We are already linked to your channels so we know your exact occupancy rate. We use this to immediately determine your new price based on your specifications and push this new price to your channels instantly. As a new booking is received your new price is calculated and all of your connected API channels are updated.
You can create Dynamic rates for any period you wish. This means that you can have different price range and threshold configurations for key times of the year. Even better, you can always override your Dynamic Rate for specific days of the week. So, for example, you can set the dynamic rate for weekdays only and use a set rate for weekends.
You have total control and flexibility when creating and managing your rates with Tokeet. If you have any questions about this or about any of our other features please let us know.