How Are the Price Recommendations Calculated?

How Are the Price Recommendations Calculated?

Our algorithm integrates multiple factors, customizable inputs, and controllable settings, alongside data-driven analytics, to deliver enhanced results. When you review prices for a listing for the first time -
  1. You must first set your Base Price of your listing based on it's attributes and current performance. This is an essential and crucial step as the base price serves as the starting point to where we apply our calculations. Think of the base price as the average nightly rate throughout the year, around which we'll incorporate dynamic adjustments based on different trends. By lowering or raising the base price, we can subsequently adjust the recommended prices accordingly.
    Price Calculation

  2. Discover our Base Price Help Tool—a powerful resource designed to streamline your pricing process. For more information, check our guide here.
  3. Next, we incorporate Seasonal Factors derived from historical data of rentals and hotels in the surrounding area. Please note that the seasonality is based on a broader region. 

  4. If you prefer a more personalized approach, you have a couple of options to refine the seasonality: you can adjust the aggressiveness of our Seasonality settings, provide us with the seasonality specific to your portfolio, or set seasonal prices according to your preferences.
  5. Following that, we integrate the Demand Factor into our pricing algorithm.  This factor takes into account day-of-week trends, events, and holidays to effectively gauge the demand for your listing. By analyzing booking patterns in the market, our algorithm forecasts high and low demand periods. This ensures your pricing remains responsive to market dynamics, optimizing your earning potential.
    Day of Week Trends

    Holiday & Event Pricing Adjustments

  6. To learn more how you can adjust the Demand Factor Sensitivity, check our guide here.
  7.  In certain markets, we add the Pacing Factor. This factor comes into play when the projected demand significantly diverges from historical seasonal patterns. We calculate this deviation by assessing how far ahead or behind your market's occupancy is compared to previous years.

  8. Then we add all Pricing Customizations that are set at the listing, group, or account level, taking into account both default settings and your individual preferences (e.g. last-minute discounts, orphan day prices, adjacent factor, smoothing etc.). Furthermore, any Date-Specific Overrides you have established are factored in.
    Lead Time Adjustments

  9. Afterwards, we enforce the Minimum and Maximum Price limits you have set to ensure that prices do not fall below or exceed your specified thresholds. Additionally, you have the flexibility to establish different minimum and maximum prices for specific seasons and holidays. It's important to note that if you have set a fixed price (through your customizations or overrides) for certain dates that is lower than the lowest rate, those fixed prices will be applied.

  10. Lastly, the Final Adjustments are added. This includes the Pricing Offset wherein the additional percentage or fixed price adjustment is added very last (if you have any overrides, it is added on top of it as well).
Hope this helps get a good sense of how we calculate prices!

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