Revenue management for independent owners

Revenue management for independent owners

Revenue management for independent owners 900 382 The Innova Room

A market exists when an economic transaction occurs between two parties in exchange for a good or service. Traditionally, exchanges between individuals were governed by simple rules at a local level.

And then Airbnb arrived to break these paradigms in the tourism sector, facilitating the connection between supply and demand of individuals. But the traditional tourism industry still had the technological advantage when it came to mastering the art of establishing dynamic prices based on supply and demand in real time: revenue management. Who has not suffered the rise in the price of a desired flight, as there were fewer seats?

Consequently, it was only a matter of time before the growing private business would drive the development of complementary technological tools. A sample of this is Beyond Pricing, which already operates in Barcelona and Madrid, and will soon arrive in Seville.

Beyond Pricing: the highest possible price for your home on Airbnb

The operation of the revenue management tool offered by Beyond Pricing is very simple. Thanks to its technology, any user who hires its services will be able to ensure an automation of the prices at which their property is offered for rent. This means that, after an exhaustive analysis of the environment, the tool will calculate the maximum that can be requested per night, ensuring occupancy. In other words, the software analyzes a series of factors such as: the season, the arrival of tourists, the events that are held, as well as hotel occupancy, to offer its client the maximum price that the tourist would be willing to pay. In this way, the benefits obtained from the property are maximized, ensuring that the cost will not lead to a negative response from the traveler.

As shown in the images below (sourced from the Beyond Pricing blog), finding the balance between price and occupancy is critical to business success. But this point not only varies constantly depending on seasonality or events, but is also affected by what the competition is doing at that moment. That is where Beyond Pricing comes in to manage all this aggregate information to offer it to the user through a simple interface.

It is also interesting to discover that the Beyond Pricing website acts as a gateway to an expanded ecosystem of services, presenting other partners with complementary business proposals for this same client (the owner operating at Airbnb). For example, real estate services, cleaning, maintenance, check-in/out or 24/7 commercial management so that the business does not depend on a single person.

The tool has a cost of 1% on monthly net sales (on total revenue, minus the 3% commission that Airbnb charges for its platform). In Beyond Pricing they affirm that individuals see their sales increased in a range of 25% to 40%, so in that case the commission would be more than compensated. It would be necessary to know the information of the owners to know if this assumption is realistic. Does anyone share their experience?

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