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.
   
   
   
Discover our Base Price Help Tool—a powerful resource designed to streamline your pricing process. For more information, check our guide here.
2. Next, we incorporate Seasonal Factors derived from historical data of rentals and hotels in the surrounding area. For our newest algorithm - Hyper Local Pulse (HLP), the seasonality factor is calculated based on your hyper-local data. For the listings on old algorithm, the seasonality is based on a broader region/city.
   
   
   

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.

3. 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
   
   
To learn more how you can adjust the Demand Factor Sensitivity, check our guide here.

4.  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.
   
   
5. 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​
   
   
   
6. 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.
   
   
7. 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!

• Related Articles

• Seasonality

  What is Seasonality? Seasonality in accommodation rental industry is how the demand at a broader market level varies with season or time of the year. For example - consider a small town which is famous for their Ski Resorts, it will see huge influx ...

• Setting your base price

  What is the base price? Base price is the average rate you would charge across the year. We use the base price as a starting price and apply all market factors, demand patterns, and customizations on top of this. The base price includes the quality ...

• What is Dynamic Pricing and how to use it?

  Dynamic Pricing: This provides automated daily rate and minimum stay updates based on market data and your listing performance. You can deep dive into how it works here. We analyze each listing and recommend daily rates based on several factors. We ...

• Understanding the Pricing Calendar

  (Watch our Pricing Calendar Playlist here) The calendar shows recommended prices for each available night in the future. You might notice that each day has a different price - and this is the magic of dynamic pricing! In general, the prices fluctuate ...

• How to revert back to the old Algorithm (Less than 10 listings)

  We have been testing our new algorithm (Hyper Local Pulse aka HLP) since 2023 with promising results (i.e. increased revenue compared to old algorithm), and is available for everyone now. But in case you think our new algorithm is not working for you ...