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Getting vacation rental pricing right is an art. Ask for too much, and you might end up with more gaps in your calendar than you’d like to see. Ask for too little, and you risk leaving money on the table. 

Technology has made the lives of property managers easier in countless ways, and setting rates is no exception. Using dynamic pricing tools to generate automatic rates is a great way to get ahead of the competition, boost your revenue and maximise your occupancy.  

Let’s look at the best dynamic pricing solutions on the market and how you can add them to your revenue management toolbox.

Jump to: The limitations of manually setting your rates | How does dynamic pricing work?How the world’s most successful property managers use dynamic pricing | How can you implement dynamic pricing solutions? | Top 5 dynamic pricing tools for vacation rentals

The limitations of manually setting your rates

Demand is extremely volatile – it can plummet or skyrocket unexpectedly at any given time.

Up until a few years ago, property managers used to rely on fixed prices that didn’t take into account changes in market demand, save for seasonality. This approach doesn’t work anymore.

If all you had to take into account were the differences between high season and low season, setting rates for your vacation rentals would be a simple matter. What makes it difficult is that demand within those periods fluctuates drastically.

You can tinker with your pricing manually to a certain extent. Maybe you’re aware that there’s usually a spike in demand during a holiday or a local event. You might even have historical data to back up your assumptions. 

However, demand is extremely volatile – it can plummet or skyrocket unexpectedly at any given time. There’s no guarantee that this year will be the same as last year.


If you’re basing your predictions solely on experience, unforeseeable changes in demand can quickly render them worthless. And you can end up setting your prices too high or too low. 

Then there’s the question of mapping your rates against your competitions’. It’s not impossible to do the research manually – but doing it multiple times a year, trying to cover your entire competitive set is very time-consuming. 

Enter dynamic pricing. 

How does dynamic pricing work?

Dynamic pricing is a response to dynamic demand.

Dynamic pricing solutions allow you to optimise your rental’s performance by frequently adjusting your nightly or weekly rate based on real-time market data.

The price adjustments are automatically generated by algorithms that leverage machine learning to understand fluctuations in supply and demand. 

This data-driven approach takes into account multiple factors that help to determine the perfect pricing for your vacation rental, analysing your competition as well as real-time demand, occupancy, performance, etc.  

Think of it this way: dynamic pricing is a response to dynamic demand.

Using dynamic pricing software to adjust your rates can significantly boost your revenue. Leading dynamic pricing providers claim that their data-driven solution can increase your revenue by as much as 40%. 

Implementing automatic pricing based on real-time market data is also a great way to avoid low occupancy rates. The more competitive your prices are, the more likely it is that someone will book your rental. 

How the world’s most successful property managers use dynamic pricing

Some property managers build their own pricing solutions in-house. Others use external tools integrated into their main software. 

In the vacation rental industry, technology gives you a competitive edge. And using sophisticated tech solutions to take care of your pricing and revenue management is no exception.

According to the Short-Term Rental Tech Report 2020, one-third of all property managers use some kind of yield management or dynamic pricing software.

And it’s not just the biggest players. In fact, 25% of property managers with 1-99 rentals use pricing and yield management tools, only a trifle less than property managers with more than 100 units (32%). 

Some property managers choose to build their own pricing and revenue management solutions in-house. Others, who don’t have a large enough tech team or simply choose to focus their efforts elsewhere, use external tools integrated into their main software. 

We’ve seen examples of property managers acquiring dynamic pricing providers and making them a part of their business to be able to take full advantage of their solutions. 

In 2018, Evolve Vacation Rental purchased Everbooked and brought their dynamic pricing platform in-house. 

In a similar strategic move in mid-2019, City Relay acquired Outswitch – which continues to operate as a separate brand while also providing City Relay with a bespoke yield management system. 


As for property managers who build their own solutions from scratch, Sykes Holiday Cottages is a great example. 

As CEO Graham Donoghue told us in a Secret Sauce interview, Sykes’s yield management system currently makes around 2.5 million automatic price changes a year across the company’s 17,500 properties. But it didn’t start out that way. 

A few years ago, Sykes was still using a printed-out, 52-week pricing brochure to manually adjust their prices. Since then, they’ve built their own yield management model.

And today, Sykes’s team of 14 people handles all the work involved in optimising prices with the help of their bespoke software.

After seeing these examples to aspire to, you may be wondering: how can you start your dynamic pricing journey?

There are two ways to start automatically adjusting your prices today, and we’ll cover both in the next section. 

How can you implement dynamic pricing solutions?

1. Use a PMS with a revenue management module

While there is no all-in-one vacation rental software solution on the market that could cover 100% of a professional property manager’s tech needs, there are quite a few hybrid platforms that combine a variety of different features. 

For example, some of the top property management systems (PMS) have built-in revenue management modules that you can use to automatically adjust your prices.

So if you’re not ready to commit to a dedicated dynamic pricing tool, check whether your PMS has a pricing feature with advanced capabilities.

In our ebook, the Who’s Who of Property Management Systems, you’ll find 19 PMS providers along with everything you need to know about them, including a list of their built-in features and the tools they integrate with.

If you don’t use a PMS yet or you’re planning to make a switch, this ebook will help you find the perfect software with dynamic pricing and yield management capabilities. 

2. Use an external dynamic pricing tool

The other option is to work with a company that specialises in dynamic pricing.

There are several dynamic pricing platforms on the market that integrate with other vacation rental software – top PMSs and Channel Managers – as well as listing sites. 

These companies have been doing outstandingly well in the past few years, continuously improving their product and growing their customer base.

Some of the leading providers have sparked the interest of investors, with Beyond Pricing raising $42 million in funding in September 2019.

Let’s take a look at the best dynamic pricing solutions out there. 

Top 5 dynamic pricing tools for vacation rentals

1. Beyond Pricing

Beyond Pricing has built an advanced dynamic pricing solution that accounts for changes in demand on a daily basis to help you maximise revenue and occupancy.

The software assigns a pricing Health Score to your properties to make sure you’re always aware of opportunities for optimisation. 

You get detailed insights with every price recommendation, so you don’t need to wonder why prices are going up or down in your area on a given day. The tool also helps you plan ahead by providing a preview of pricing recommendations for the next year. 

The Beyond Pricing platform connects seamlessly to the most popular property management systems as well as the Rentals United Channel Manager. 

In mid-2017, Beyond Pricing acquired competitor Smart Host to leverage their technology and bring more sophistication to pricing in the vacation rental market. 

Pricing: 1-1.25% of total revenue. 30-day free trial available. 

Learn how to connect Beyond Pricing with the Rentals United Channel Manager. 

2. PriceLabs

PriceLabs offers customisable data-driven pricing to help boost your vacation rental revenue. Their price recommendations take into account market supply and demand, seasonal and day-of-week trends, special events/holidays and lead time. 

They pinpoint dates that are in high demand by looking at data from nearby listings and hotels, track seasonality based on historical data and analyse your listings’ performance to suggest pricing tweaks.  

Customisation options include setting dynamic minimum stays, enabling occupancy-based adjustments and more. 

PriceLabs connects directly to over 30 PMSs and Channel Managers, including Rentals United. 

Pricing: Starts at $19.99/month in the US, Canada and Europe and $9.99/month in other countries (for 1 vacation rental property). 30-day free trial available. 

Learn how to connect PriceLabs with the Rentals United Channel Manager. 

3. Outswitch

Outswitch is a dynamic pricing tool that was built with the needs of professional property managers in mind.

It helps you optimise your prices to match market demand, maximise your occupancy and insure against gaps in your calendar, as well as control your length of stay and incorporate longer bookings into your strategy for more revenue. 

The platform is all about giving you control. Outsiwtch’s approach to automatic pricing is based on smart rules, which allow you to configure your own pricing parameters and combine your knowledge of your local market with their intelligent algorithm. 

Outswitch seamlessly integrates with tools that you likely already use – like the Rentals United Channel Manager – so there’s no need to migrate or manually enter your data. 

Pricing: Starts at $50/month (for 1 vacation rental property). 30-day free trial available. 

Learn how to connect Outswitch with the Rentals United Channel Manager. 

4. Wheelhouse

Wheelhouse helps Airbnb hosts, vacation rental owners and property managers run their business more efficiently with tools like dynamic pricing, powerful data insights and a personalised revenue management strategy.

They help you stay competitive throughout the year with more than 240 unique rates per year. 

Wheelhouse’s team of PhD Data Scientists has built a software solution that can help you harness the power of real-time data insights to understand pricing once and for all. 

Advanced settings help you control how aggressive you want your pricing strategy to be and align it with your overall business goals.

Wheelhouse integrates with several popular PMS providers

Pricing: 0.75-1% of total revenue. 30-day free trial available. 

5. AirDNA Recommended Rates (Beta)

Leading vacation rental data company AirDNA has developed its own dynamic pricing tool called Recommended Rates. The tool is currently in beta mode and can be used free of charge by all AirDNA MarketMinder subscribers. 

With this tool, AirDNA has taken its Market Rates calendar, which allows users to filter daily prices of similar rentals, a step further.

The Recommended Rates calendar uses artificial intelligence to analyse a rental’s past performance with local market dynamics to generate price recommendations. 

The team is currently live testing the already sophisticated algorithm to allow them to further optimise it. 

Pricing: MarketMinder subscriptions range from $19.95/month to $99.95/month.

Editor’s note: This post was originally published in March 2016 and has been updated for accuracy, depth and comprehensiveness.

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  • If you are interested in Airdna’s new Copilot Pricing tool, you may also want to check out my review of it. I age it a try using real Airbnb data from the Bali market, where I own 2 properties. I got very interesting insights about my market, as well as nice ideas on how to compete with the best Airbnb listings out there. Here’s the link:

  • thanks for posting your analysis Thibault!!

  • KironSmith

    Nice one!! I guess we’ll have to have a “How to price your Vacation Rental part 2″!

  • Internet is big media to rent your vacation rental property quickly with your options because websites drive unlimited leads which will track for you…

  • Any thoughts on Wheelhouse? Their pricing suggestions for my property seem extremely high. I am already the most expensive rental in my region, so I am having a hard time thinking I am leaving that kind of money on the table.

  • Hi Lisa, I’m not familiar with Wheelhouse but thanks for pointing them out. I guess we need a 2017 update!

  • I am sure you know this, but many of these pricing apps can look great on the surface. However, it really depends on your goals for your property. If you rent you second home as a true second home, their strategy may not work well, because the primary focus is on revenue. I would love to find one that actively monitors the year’s average stay duration for taxes – maintaining an average of 7 nights or less – and help rent the home at a price that optimizes income and bookings so the owner can attain their goal for personal days. These are attributes not often discussed as it relates to these programs.



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