For seasoned VRBO hosts, pricing strategy is often the defining factor between a full calendar and an underperforming listing. Smart Pricing, when optimized correctly, serves as an essential tool in managing competitive rates while reducing manual effort. However, simply enabling the feature won’t guarantee success—it’s about knowing how to customize and adapt the system to meet your property’s specific needs and market dynamics. This guide will help you navigate the process step by step, offering advanced insights that go beyond the basics.
Understanding the Core of Smart Pricing
VRBO Smart Pricing isn’t just about automation; it’s about utilizing real-time data to optimize nightly rates. This feature dynamically adjusts your rates based on demand trends, seasonality, and local market conditions. As a seasoned host, your goal is to fine-tune these settings to reflect your property’s unique value.
The following steps will guide you through the setup and optimization process, helping you maintain a balance between automation and your personal strategy.
How to Set Up Smart Pricing on VRBO
Activating the Feature
Begin by logging into your VRBO dashboard and navigating to the “Calendar & Pricing” section. Locate the Smart Pricing toggle and enable it.
Once activated, you’ll be prompted to set a minimum and maximum price range for your property.
Setting a Price Range
The minimum price should reflect the lowest acceptable rate for your property—accounting for costs such as cleaning, utilities, and maintenance. Meanwhile, the maximum price should remain competitive within your market, particularly during peak demand periods.
Action Tip:
Review historical booking data to establish a realistic price range. Look at periods when your property performed well and identify any trends or pricing anomalies.
Refining Your Smart Pricing Rules
To get the most out of VRBO’s Smart Pricing, customization is key. Here’s how to refine the default settings:
Adjust for Seasonality
High and low seasons are critical for determining your pricing strategy. Use Smart Pricing’s flexibility to create distinct rules for different times of the year. For example:
During peak travel seasons, raise your minimum rates to capitalize on demand.
In off-peak periods, set lower minimums to attract budget-conscious travelers.
Special Event Pricing
Local events such as festivals, sporting events, or holidays can significantly influence demand. By monitoring local calendars, you can proactively adjust your maximum rate for dates likely to experience higher bookings.
Pro Tip:
Set calendar reminders to manually verify your rates around major local events.
Smart Pricing doesn’t replace manual calendar management. Always block out dates for personal use, maintenance, or other non-rental purposes.
Stay Requirements
Set minimum and maximum stay requirements for your property. Longer minimum stays (e.g., three nights) during peak weekends can help reduce turnover costs and maximize earnings.
Monitoring and Adjusting Smart Pricing in Real Time
Even with Smart Pricing enabled, you’ll need to stay involved in managing your property’s pricing strategy. Regularly reviewing performance ensures the algorithm aligns with your expectations.
Weekly Audits
Set aside time each week to review how Smart Pricing has adjusted your rates. Pay close attention to dates that have been priced unexpectedly low or high, and make manual corrections when necessary.
Analyze Booking Trends
Look for patterns in your booking history to understand how guests are responding to your rates. If you notice a sudden drop in occupancy, it could indicate that your minimum price is too high for current demand.
Adjust for Cancellations
When last-minute cancellations occur, consider temporarily reducing your rates to attract new bookings quickly. Pair this with the “Special Offer” tool to incentivize travelers searching for deals.
Integrating Smart Pricing with Promotions
Smart Pricing doesn’t operate in isolation—it works best when combined with targeted promotions and guest retention strategies.
Attracting Early Bookings
Offer discounts to guests who book several months in advance. While Smart Pricing adjusts rates dynamically, an early-bird promotion can lock in bookings before demand spikes.
Filling Gaps in Your Calendar
For short gaps between bookings, use limited-time promotions to increase visibility. These can be paired with Smart Pricing’s last-minute adjustments for optimal results.
Building Guest Loyalty
Manually override Smart Pricing to offer personalized discounts to repeat guests or direct bookings. Guests appreciate exclusivity, and this approach encourages them to choose your property over others in the future.
Advanced Strategies for Experienced Hosts
To maximize the effectiveness of Smart Pricing, you’ll need to employ some advanced techniques:
Use Third-Party Pricing Tools
For hosts managing multiple listings, integrating Smart Pricing with third-party tools like Beyond Pricing or PriceLabs can provide more granular control.
These platforms analyze deeper market data and allow for multi-platform synchronization.
Optimize Cleaning Fees
Instead of setting a high cleaning fee, adjust your nightly rates to incorporate some of this cost. Smart Pricing will automatically balance your adjusted rates, making your listing more attractive to potential guests.
Monitor Competitors Closely
Regularly check competitor listings for changes in pricing, amenities, and guest reviews. This information can help you refine your Smart Pricing settings to maintain a competitive edge.
Common Pitfalls to Avoid
Even experienced hosts can encounter challenges when using Smart Pricing. Here are a few to watch out for:
Overriding Too Often
Constant manual overrides can confuse the algorithm, leading to unpredictable adjustments. Use manual interventions sparingly and only when absolutely necessary.
Ignoring Guest Feedback
If guests frequently mention that your property is overpriced or doesn’t match their expectations, it’s a sign your Smart Pricing rules may need revision.
Setting Inflexible Price Ranges
Overly rigid minimum and maximum rates can hinder the algorithm’s ability to adapt to real-time demand. Strike a balance between automation and control to achieve better results.
Staying Ahead of Market Trends
As markets fluctuate, staying informed about trends can help you make smarter pricing decisions.
Stay Updated on Local Events
Subscribe to local event calendars or community newsletters to anticipate periods of increased demand.
Use Analytics Tools
Platforms like AirDNA or Mashvisor offer valuable data on market performance, including occupancy rates, ADR, and competitive benchmarks. These insights can help you refine your Smart Pricing strategy.
Experiment with Pricing Tiers
Test different pricing tiers for specific property features, such as premium views or additional amenities. By adjusting rates for these features, you can attract specific types of guests while maximizing revenue.
Final Thoughts
Smart Pricing is a powerful tool, but its effectiveness depends on how well you understand and manage it. By setting clear price ranges, customizing rules, and actively monitoring performance, you can create a strategy that aligns with both market demand and your personal goals.
For seasoned hosts, the key is not just automating pricing but mastering the art of adaptation. Stay informed, test new approaches, and remain proactive in your management efforts. With these steps, you’ll turn Smart Pricing into a valuable ally in optimizing your rental business.
