When is It Time to Hire a Revenue Manager for Help with Pricing?

Rebecca
Rev and Research - COO

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November 19, 2024

As a short-term rental owner, pricing your property is one of the most important decisions you’ll make. It’s not just about filling your calendar—it’s about maximizing revenue, protecting your investment, and ensuring long-term success in a competitive market. If you’re wondering whether it’s time to bring in a revenue manager, here are key signs to look out for.

1. Your Bookings are Either Too Low or Too High

Booking rates can tell a lot about your pricing strategy. If your calendar is wide open, it might be a sign that your rates are too high, discouraging potential guests. On the flip side, if you’re fully booked months in advance, you might be undercharging and leaving money on the table. A revenue manager can analyze your performance and help you strike the right balance—filling your calendar at the most profitable rates.

2. You’re Spending Too Much Time Managing Pricing

Pricing is not a “set it and forget it” task. Market conditions change rapidly, and staying competitive requires daily or weekly adjustments. If you’re spending hours tweaking rates, monitoring competitors, and tracking trends, you may be losing time that could be better spent on other aspects of your business. A professional can take over this time-consuming task, freeing you to focus on what you love—whether it’s improving guest experiences or expanding your portfolio.

3. You Don’t Know How to Respond to Market Changes

Whether it’s seasonal fluctuations, local events, or sudden market shifts (like a pandemic or economic downturn), knowing how to adjust your pricing can be overwhelming. Revenue managers monitor market trends in real time and make data-driven adjustments to your pricing strategy. They know when to push rates during peak demand and when to lower them to avoid vacancies in slower periods.

4. You’re Unsure How to Use Data to Set Rates

Successful pricing isn’t guesswork—it’s a science. To get it right, you need to understand data points such as average daily rate (ADR), occupancy rates, lead time, and market pacing. If these terms sound unfamiliar or you’re unsure how to apply them to your property, it’s a clear sign that hiring a revenue manager could be beneficial. They’ll take the guesswork out of the equation and provide you with clear insights based on data.

5. You Manage Multiple Properties

With a growing portfolio, managing the pricing for multiple properties becomes exponentially more complex. Each property may have different demand curves, guest profiles, and local market conditions. A revenue manager can optimize pricing across your entire portfolio, ensuring each property performs to its fullest potential without requiring your constant attention.

6. Your Competitors Are Outperforming You

If you notice neighboring properties with similar features are charging higher rates or maintaining higher occupancy, it may be time to reassess your strategy. A revenue manager can evaluate how your property stacks up against the competition and make recommendations to enhance your pricing, marketing, and overall appeal to guests.

7. You Want to Grow, But Don’t Know Where to Start

You may have ambitious growth goals—whether it’s improving revenue year-over-year, expanding into new markets, or increasing guest loyalty—but without a clear strategy, it’s hard to know where to start. Revenue managers don’t just help you price for today; they help you plan for the future. By identifying trends, forecasting demand, and budgeting for long-term success, a revenue manager becomes your strategic partner in growth.

8. You’re Experiencing Revenue Plateaus

Even if you’re not struggling, you may feel like your income has hit a ceiling. Revenue plateaus can be frustrating, especially when you’re putting in the effort but not seeing higher returns. A revenue manager can perform an in-depth analysis of your property’s performance, identify missed opportunities, and provide fresh strategies to push through that ceiling.

9. You’re Having Trouble Explaining Rates to Homeowners

One of the toughest aspects of managing short-term rentals is maintaining strong relationships with homeowners—especially when it comes to explaining pricing decisions. If you find it difficult to communicate your rates or justify pricing adjustments to homeowners, it may be time to seek professional help. A revenue manager not only provides data-driven strategies but also helps build trust by creating a transparent plan for the future. By partnering with property managers, revenue managers instill confidence in the pricing strategy, fostering a stronger relationship between you and your homeowners.

Conclusion: Time to Call in the Experts?

Hiring a revenue manager can be a game-changer for your short-term rental business. They’ll take the stress out of pricing, ensure you stay competitive in your market, and help you make data-driven decisions that maximize both occupancy and revenue. If any of the above signs resonate with you, it may be time to bring in professional help. Your property—and your peace of mind—will thank you.