When it comes to pricing and revenue, at Pensacola Beach Properties, we always advise owners to avoid the 'set it and forget it' approach. That's because we know very well that if you really want to make the most money out of your beach rental investment, you need a proper revenue strategy.
Instead, we suggest you take a dynamic pricing strategy, much like major airlines and major hotel chains do. Dynamic pricing for Pensacola Beach vacation rentals works just as well, and it entails keeping a close eye on market factors, competition, and demand fluctuations.
As professional vacation rental managers in Pensacola, FL, we rely on a team of revenue managers who perform in-depth analysis of the market conditions and continuously fine-tune rental rates across all our properties.
With years of experience, we can safely say that we have developed a good approach to revenue management that really helps us to perform above the market standard.
Today, we're bringing this approach to you. In this blog, you'll get to know our fundamental dynamic pricing and other revenue rules.
Let's get started with what we practice to maximize Pensacola Beach rental income.
1. Occupancy is our primary factor.
Occupancy is our primary determinant at Pensacola Beach Properties.
To achieve this optimal occupancy, we closely monitor the competition to ensure our pricing is competitive compared to rentals similar to ours. We understand that different rental types have different pricing dynamics, so we focus on analyzing competitors with similar sizes and amenities, as they directly influence our booking trends.
Moreover, we pay attention to demand patterns. When there is a surge in bookings, we quickly adjust our rates to match the increased demand. During high seasons and popular events, we always adjust our rates accordingly.
We also consider variability in our strategy. Given that our typical booking lasts about 4.5 nights, a single booking in a month can swing our occupancy by 10-20%. Therefore, even if our target is 75% occupancy for the next month, we don't stress too much when we are at 50%. Instead of worrying, we take a flexible approach, analyze the situation, and make necessary adjustments for timely bookings.
Pro tip: at Pensacola Beach Properties, besides proactive thinking for revenue maximization, we rely on fantastic software tools to monitor demand and competition. Two of them are KeyData and AirDNA.
At Pensacola Beach Properties, we never suggest you take the "set it and forget it" approach. To stay ahead in the revenue game, it's important to keep an eye on market trends and on your competition.
Pictured: Stella Marris Home Rental in Navarre Beach.
When we talk about "booking windows" in vacation rentals, and in the hospitality industry as a whole, we are referring to the timeframe between the moment someone books your rental online and when they actually check in at your property. Monitoring this timeframe is an important part of income and occupancy optimization.
For our condos and homes in Pensacola Beach, this window is typically three to four weeks. This means it's perfectly normal not to see bookings pop up four or five weeks in advance.
On the other hand, if you're noticing that there are too many bookings happening outside your booking window, this probably means that you're selling yourself short and that you can raise your prices a bit.
As you can probably tell by now, optimizing your Pensacola Beach rental revenue is directly linked to knowing how to react to different demand patterns, including the way they are affected by the seasons throughout the year.
Florida is blessed with good weather, and its delightful sub-tropical climate attracts visitors year-round. Still, there is the seasonality factor to think about in the Sunshine State.
You must understand these patterns too; during slow months, for instance, charge rates that are lower to attract more bookings. Keep moderate rates during the shoulder season and save those premium prices for when the demand really heats up.
For most of Florida, we'd say these peak months are from May to February. Let's not forget those snowbirds who flock to our shores looking for warmer temperatures.
Besides adapting to seasonality with our rates, we also adjust them for holidays and local events, where we have more leeway to charge higher figures. We like to think that our vacation rental inventory is time-sensitive; if the opportunity passes, we will never get those heads in beds. So, if we must, we don't shy away from giving last-minute discounts. The truth is that several discounted days a month still add up to a good amount at the end of the year.
In many short-term rental markets, people look less for rentals during weekdays. It's no different here in Pensacola Beach; from Sunday to Thursday, you might find that demand is lower, and it's a good idea to price your rental lower than on weekends if you want to reel in more bookings during these quieter days.
Likewise, don't be afraid to upcharge on weekends.
Building a good revenue optimization strategy is much about looking at demand and competition, but it's also about looking inside — meaning evaluating your own property. Your price should be in line with what you offer in terms of comfort, decor, and amenities.
Regarding amenities, a modern and well-equipped kitchen is expected by most guests. Nowadays, hot tubs are almost a must-have amenity for home rentals, but the larger your property, the more amenities you should consider. Private pools or pool access for condos really help boost your rates.
And you should also put some effort into your decor. A rental with sleek decor will invariably perform better than one that's uninspiring. It's also a good idea to incorporate some Instagram-worthy details in the interior design. They can work wonders and grab viewers' attention when they browse for rentals online.
For more tips on how to stand out, visit this blog and learn the tactics we use to differentiate ourselves in a crowded market.
Good amenities and Instagram-worthy decor will also boost your rates. Pictured: Sand Heaven Shores rental in Navarre.
When it comes to vacation rentals, many factors that are not exclusively related to revenue optimization are intertwined.
Here are some additional things you can have in mind that will contribute to your overall success:
In a way, focusing on high occupancy can actually mean you are charging lower rates, and as most of us already know, this can attract the wrong type of guest—people who will not respect your property as it should be respected. Learning how to vet potential guests is a useful skill, a topic we will discuss in another post. For now, let's just say that less than 1% of guests will cause trouble to the point that you will need to file a damage claim. This is even less of an issue if you follow our approach: we monitor trends in our competitive landscape and set our rates roughly 10% higher while maintaining our occupancy between 70-80%. This results in less wear and tear while maximizing daily rates. It works for us!
Many aspects will affect how you rank on OTA platforms, including your price, quality score, Superhost status (if you have it), the amenities you offer, and so on. Another factor is the way you work on your listing descriptions. As people look for specific features while browsing, it's a good idea to have SEO optimization in mind. This means paying attention to your title, photos, and copy in a way to boost clicks and conversions.
This one is rather obvious but still worth mentioning. You should really strive to gather as many good reviews as you can. This is very important. Just think that if you fall below 4.7 stars, there is a 9% decline in booking revenue. If your score drops beyond that, you'll need to lower prices to secure bookings, and that's not ideal.
Dynamic Pricing & Other Revenue Rules to Follow with your Pensacola Beach Rental
There's no doubt about it; if you follow these data-driven averages and maintain a consistent pricing strategy, you'll give your rental revenue a great boost and end the year with a large smile.
For more property management tips for your Pensacola Beach rental, head to our blog. At Pensacola Beach Properties, we love sharing industry insights and practical knowledge about our industry.
