Last week we released our latest report in the Skift Trends series, The Vacation Rental Technology Ecosystem.
Below is an extract. Get the full report here to get ahead of this trend.
Nightly rates have the potential to make or break the performance of a vacation rental. If rates are too high or too complex, fewer travelers will book the home. If rates are set too low, owners are likely to leave money on the table.
Most start the old-fashioned way by researching their competition, reviewing listings for similar properties to gauge how much the competition is charging.
Adjusting your rates based on traveler demand—often called dynamic pricing—is the best way to optimize rental income. For example, owners benefit from charging higher fees during peak season, holidays and weekends. In addition, most owners also offer discounted rates for longer stays.
“It’s essential to be brilliant at pricing,” said HomeStay CEO Alan Clarke. “Over time, in a world of perfect information, platforms could and should make recommendations almost at a street level. There is no reason why marketplaces can’t help hosts determine their price. It’s incumbent on platforms to make it intuitive and easy.”
Then comes the trickiest part. Once a host has connected with a guest, it’s imperative that the host can offer safe and secure payment options.
HomeAway offers instant booking and payment processed internally, assuring secure payment arrival and automatically insuring that payment for up to $10,000. For homeowners or managers who take payment through TripAdvisor, the company will look after damage deposits, leaving enough time for the homeowner to report any damage and claim deposit money after the stay.
Vacation rental payment processing challenges have brought forth an emergence of companies offering horizontal needs to vertical platforms. Companies like WorldPay and MangoPay have been developed to solve payment challenges and now can provide payment solutions that can be deployed across any vertical.
“As the marketplace matures, entrepreneurs will find ways to create value for that ecosystem,” said Clarke