More and more, vacation rental owners are opting to use tools to manage and enhance their pricing strategies to ensure maximized profit margins and a healthy looking booking calendar. We sat down with Ziad Noujaim, CEO of Outswitch, to talk about the growing importance of dynamic pricing, how yield management services can help make the most of your rental and what factors really affect occupancy rates.
Hi Ziad, can you tell us a bit about Outswitch? What are the main services that Outswitch offers?
Outswitch at its core is a yield management software tailored specifically for professional property managers in the vacation rental space, in order to help them optimize their prices and maximize their revenue. Given that professional managers usually list their properties on multiple channels to expand their reach, Outswitch also includes a channel manager that synchronizes prices and availability for properties on different channels.
We also offer some performance reports that are invaluable when measuring how you are doing and help you to improve your pricing continuously.
Why are services like Outswitch useful for vacation rental owners?
Given that the space is becoming increasingly crowded, mispricing properties either leads to the loss of valuable bookings or selling at a discounted price when guests are willing to pay more. Thus, for managers to compete and succeed in the space, optimizing prices is vital to maximizing their profitability. It also allows for full automation of pricing once the rules are set, to let the manager focus on client experience and free invaluable time.
What is dynamic pricing?
Dynamic pricing is the variation of nightly prices based on several factors such as seasonality, time of booking, and day of the week that affect market demand.
How can owners increase profit with dynamic pricing?
Owners can increase profit with dynamic pricing because different customers are willing to pay different prices to get what they want.
Managers can maximize profitability by:
- Configuring their prices to automatically adjust to market demand
- Optimizing their prices for each day
- Varying their minimum stays to favor longer bookings and fill the gaps in their calendar to optimize occupancy
- Continuously monitoring their performance and using the reports to constantly learn and improve their pricing.
Who is dynamic pricing most suitable for? What would be the ideal vacation rental owner “profile”?
The ideal profile of an Outswitch client would:
- Be a professional manager with local market experience that wishes to improve their revenue
- Ideally have multiple properties
- Have full control over their prices and be willing to invest a bit of time to configure and optimize them.
Why should owners choose Outswitch over competitors like Beyond Pricing or PriceMethod?
The major difference is that the other platforms are a black box model while Outswitch gives clients full control over their prices and configurations. We believe the knowledge each manager has of their local market combined with our pricing tools is more powerful than any algorithm, and this has been validated by our experience! Lastly, our connection to Lodgify allows for a very easy use of our software for Lodgify users.
How is Outswitch different to other channel manager services?
While Outswitch is not focused on channel management, it has a connection to the major channels from which most revenue comes from and particularly a two-way connection with Airbnb for prices which many channel managers don’t have yet.
What is the level of integration with certain channels?
It’s a two-way connection, except for Tripadvisor, and specifically with Airbnb – we are one of the few providers to have this connection, which allows us to push prices and sync calendars.
Can you provide some more information about Outswitch’s yield management service?
The Yield Management uses a rule-based approach – some of these rules are static (seasonal, day of the week), while others use intelligent algorithm to automatically vary the prices. We also have rules allowing you have a dynamic length of stay to push for longer stays on average.
Currently our optimization strategies don’t take into consideration competitive data as we find this is unreliable. Indeed, the vacation rental properties are usually quite unique and it is hard to compare apple for apple in terms of nightly rates.
How can big, local (or even national) events affect vacation rental pricing and occupancy?
Some regions may experience different seasonal price spikes, often relating to big, local or national events. However, a lot of new inventory gets added to the market when big events take place, so supply might surpass demand, and occupancy rates can drop. Hence it is a hard task to know what the impact will be on your inventory. With our Matrix rule, your prices will adjust depending on the demand on your inventory.
Is there any price advantage for Lodgify customers who want to use Outswitch?
We do have a transparent pricing model: we charge a flat fee per property per month based on the number of properties a manager has. However, we certainly have a special discount only for Lodgify users.
What’s the process for a Lodgify customer to get connected to Outswitch?
As a Lodgify user, you will have no manual work to do at all to import all your property information. Outswitch will request the connection of the Lodgify account and then automatically import all properties and bookings, so you can start benefitting from all the features that Outswitch has to offer right away.