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Vacation Rental Pricing Strategy: The Ultimate Guide

The vacation rental industry has seen remarkable growth in recent times. With platforms like Airbnb and Vrbo emerging as dominant players, vacation rental owners have found mastering their vacation rental pricing strategy is more critical than ever.

Whether you're dipping your toes into the hosting world or you're a seasoned vacation property owner, setting the right price can mean the difference between a consistently booked space and frequent vacancies.

In this article, we'll guide you through key methods and foundational concepts to optimize your rental income, ensuring you strike the perfect balance between attracting guests and maximizing your returns.


Why pricing your vacation rental correctly matters


Pricing your vacation rental correctly ensures optimal occupancy rates, maximizes profitability and maintains a competitive edge. Accurate pricing aligns guest expectations with the property's value, fostering satisfaction and repeat bookings while preventing prolonged vacancies or undervaluing the rental's potential.

Creating a dynamic pricing strategy is important for multiple reasons:


Occupancy rates


Setting the right price ensures optimal occupancy rates. Price the property too high, and potential guests might look for cheaper alternatives, leaving your rental property vacant. Price it too low, and you might be overwhelmed with bookings, but you'll lose out on potential revenue. Balancing the price ensures that you have a steady flow of guests while maximizing income.


Guest satisfaction


Overpricing can lead to elevated guest expectations. If they feel the experience doesn’t match the price, this can result in negative reviews, which can deter future bookings. Conversely, underpricing, although it might attract more guests, can devalue your property in the eyes of potential renters, who might question the quality or safety of your place.


Positioning in the market


Your price directly reflects where you see your rental in the market hierarchy. Is it a luxury vacation rental property, mid-range accommodation, or budget-friendly stay? 

The pricing should align with the amenities, location, and overall guest experience you offer. It not only determines your direct competition but also shapes the perception of your brand in the minds of potential guests.


Vacation rental pricing strategy: 8 key steps


Creating a pricing strategy for your vacation rental is crucial to ensure maximum profitability and sustained demand. Here are eight key steps to consider when creating vacation rental pricing strategies:


1. Market research


Market research is vital for a smart short term rental pricing strategy. Before deciding on a rate, owners need to study the market data. This means checking out nearby properties, noting their size, facilities, and place. By looking at the competitive vacation rental market, especially during different times or events, owners can see where they fit in. 

Recognizing changes in what travelers want is also key. Thorough research helps set competitive pricing and gives clues for seasonal changes and offers. This ensures rentals remain both attractive to guests and profitable.


2. Define your base rate


Setting your base rate is a crucial step in vacation rental pricing. This rate is your property's starting price, which can change based on different factors. It's set after studying the market and adding up costs like upkeep, utilities, and any mortgage or management fees. 

The right base rate covers costs and stays competitive. Even if it changes with the market, it's mainly your pricing's anchor, ensuring a balance between making money and staying booked — key for ongoing success.


3. Seasonal adjustments


Seasonal rates are vital for an effective pricing strategy. Rental demand changes with seasons, holidays, and local events. Spotting these trends lets owners raise rates during busy times for more profit. In the low season, lower rates can keep guests coming, but you can earn more in the peak season as people will still need somewhere to stay. 

By adjusting prices based on seasons and events, owners stay competitive and in tune with the market. So, seasonal pricing ensures a good balance of income and consistent bookings all year round.


4. Factor in length of stay


Considering stay length is a great way to determine vacation rental pricing. Giving discounts for longer stays helps owners in two ways: it boosts guest loyalty and cuts turnover costs. Longer bookings fill calendar gaps that short stays might create. Plus, fewer ins-and-outs mean less wear and fewer cleanings. Encouraging guests to stay longer not only streamlines operations but also builds better guest relationships. This can lead to great reviews and more repeat bookings.


5. Dynamic pricing tools


Dynamic pricing tools revolutionise vacation rental pricing. They use real-time data to auto-adjust prices based on market trends, competitor rates, local events, and even weather. This helps owners keep their prices competitive and aligned with the market. These tools remove the guesswork from pricing, predicting the best rates for busy times and steady bookings during slow periods. Using this tech simplifies pricing choices and boosts earnings.


6. Consider additional fees


In vacation rental pricing, it's vital to think about extra fees. Beyond the main rate, owners often have other costs, such as cleaning, utilities, or special amenities. Guests might face charges for added services, late check outs, or pets. It's key to clearly state these fees early to avoid later disagreements. While these add to the main earnings, they must be fair to keep guests happy. Smartly including extra fees helps owners cover all costs and gives guests a clear picture of value, building trust and a smooth rental journey.


7. Regularly review and adjust


Consistently checking and updating prices is key in vacation rental pricing. The rental world changes due to things like travel trends, economic changes, and local happenings. By regularly checking prices, owners stay on top of these shifts. They can raise rates for busy times or lower them during slow periods. This way, properties don't lose money or stay empty for too long. Regular tweaks, based on market info and guest opinions, ensure rentals keep making money and stay popular.


8. Guest feedback


Guest feedback is a vital final step in vacation rental pricing. Guests directly share if the property's price matches its experience. If many find it good value, rates might go up a bit. But if many feel it's too costly, it's time to rethink. Feedback can also point out areas for better amenities or services, affecting future prices. By using guest opinions, owners make sure their prices are just right, competitive, and meet market hopes.


Vacation rental pricing software and tools


Vacation rental pricing tools and software help property owners optimise their rates based on real-time data and market dynamics. Here are three popular options:


Beyond Pricing


Beyond Pricing is specialised software for vacation rental stakeholders, leveraging real-time market insights for dynamic pricing. It auto-adjusts rates daily, targeting optimal occupancy and revenue outcomes. The system factors in elements like seasonality, local events, and differing rates between weekdays and weekends, as well as booking lead times. Users can navigate its intuitive dashboard to view their property's metrics, track booking patterns, and anticipate revenue. 

Ultimately, Beyond Pricing empowers property owners to fine-tune their rates, harmonising potential profit with maintaining a strong market presence.




PriceLabs, a data-driven pricing solution tailored for vacation rentals, provides rate recommendations by analysing factors like holidays, events, and seasonal fluctuations. It allows owners to adjust settings, balancing between peak revenue and ideal occupancy. Seamlessly integrating with various property management systems, PriceLabs ensures real-time price modifications. 

The platform's straightforward dashboard illuminates market tendencies, enabling property owners to stay competitive and fully optimise their revenue potential. With PriceLabs, achieving the sweet spot in pricing becomes an attainable reality.




Wheelhouse is a dynamic pricing tool crafted for vacation rentals. Combining machine learning with deep industry knowledge, it offers tailored pricing suggestions considering market shifts, seasons, and local happenings. It analyses extensive data to balance profitability and occupancy in setting rates. 

The user-friendly dashboard showcases insights, rivals' data, and vital metrics, guiding property owners' choices. Wheelhouse's adaptability ensures hosts maintain a competitive stance in the ever-changing market, making listings appealing to guests.




Effective pricing is key in the fast-paced vacation rental market. Tools like Beyond Pricing, PriceLabs, and Wheelhouse help owners set the right price to attract guests and boost earnings.

But there's more to it than just pricing. Once you've set a good rate, the next step is managing the rental smoothly. Here's where Hospiria shines. We specialise in providing a one-stop solution to solve all your property management needs. We've got it covered, from communicating with guests and fixing problems to ensuring a clean space. With Hospiria's support, a competitive price draws guests in, and an excellent stay makes them return and leave positive reviews.

After following this guide and you're ready to start uploading your short-term rental listings, you can sign up to Hospiria’s website to help you out. Simply get in touch with one of our experts, and we will talk you through the process and provide you with a demo, where we can both get to know each other a bit better.


Our technology is a game changer

Our powerful, custom built software will super-charge your business and streamline your processes
  • Full listing and expert price setting on 40+ platforms to take your occupancy and profits to the next level
  • The dashboard lets you see how your portfolio is performing at a glance