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Who Is Scared of Revenue Management Software?

Change is stressful—and yet the vacation rental industry is evolving under our feet. In this dynamic environment, those who keep up will succeed, while others will be left behind.

Changes in the Vacation Rental Industry

The biggest change driving the business is technology. Never before has something as simple as an Internet connection delivered such powerful tools to level the playing field with large hotels.

Another change is the professional management of vacation rental properties on behalf of owners. Owners expect profits, and property management companies have to deliver.

One of the most overlooked technology breakthroughs, and easiest way to increase profits, is dynamic rent pricing and revenue management software.


While sophisticated revenue management software is readily available to vacation rental property management companies, some are hesitant to use it to make pricing decisions. For example, some managers fear they will lose bookings if prices increase. Others may simply not trust the software to accurately gauge market conditions.

revenue management

In reality, a revenue management solution is one of your biggest assets. It uses facts, data, and forecasts to recommend the right price, every night, for every property. The software also attaches no emotion to the process, something that property managers would be hard pressed to duplicate in making their own pricing decisions.

Increase bookings with our definitive guide on understanding how to make revenue management work for you! Get Your Free Revenue Management eBook for Vacation Rental Managers.

Using Dynamic Pricing to Increase Revenues's "Dynamic Pricing for Vacation Rentals" shares these suggestions for adjusting your pricing methods:

  • Increase your rates and/or minimum night stay for weekend stays
  • Increase your rates during peak booking periods. (Notice this is best done during peak booking periods, not peak season for your rental. So, if your peak season for stays is July, for instance, and most of your bookings for July happen in January, you would increase your rates in January, when the bookings are actually being made, rather than in July.)
  • Lower your rates during periods of low occupancy and/or when fewer bookings are made

Beyond these simple steps, however, revenue management can become somewhat more challenging. For many property managers, this is a trial and error process which involves Microsoft Excel spreadsheets and predictions that are not supported by data. 

STR Global, a consultancy, estimates that there are 164,000 hotels worldwide. Less than 10 percent of those are using revenue management software, according to Tnooz estimates. Why is this the case? It likely has more to do with reluctance to change the way pricing decisions are made than with anything else.

In the groundbreaking book "Revenue Management", author Robert G Cross describes how the management of Compaq computer company used simulation software as early as 1994—but first, a shift in thinking was needed. He notes: "Creating the simulation software and having it accepted by the company as a decision tool was not an easy proposition. It involved changing the corporate culture, gathering and examining an unprecedented amount of data, and challenging established marketing and sales practices and decision making philosophies."

How are you making pricing decisions? Matt Landau's vacation rental marketing blog provides this reality check:

"A statistician would likely analyze the local pricing patterns and draw conclusions about demand. But unfortunately, most of us are not statisticians, nor do we have any passion for charts or graphs."

He with the best price, wins

To master revenue management, you need powerful analytics tools to set your rates for maximum occupancy and revenue. The revenue management system works within limits you determine for your properties and your markets, then analyzes and adjusts your rates in real time.

Watch this brief overview to learn more:

Our revenue management software is easy to use and gives you the competitive advantage of dynamic pricing for your properties. With functionality that eliminates the guesswork of pricing, you can be confident that you are setting just the right rates.

Are you ready to see the Kigo solution in action? Schedule a demo.

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