How Are the Price Recommendations Calculated?

How Are the Price Recommendations Calculated?



Our algorithm considers a number of factors, some inputs and settings that you can control, and our data-driven analytics layered on top of it. When you review prices for a listing for the first time,
  1. We estimate a base price for the listing you based on it's attributes and current performance. Think of the base price as the average nightly rate for the year, around which we'll make fluctuations based on various trends. Reducing or increasing the base price will reduce or increase the price recommendations
  2. We then apply seasonal factors estimated from historic rentals and hotels in the area. Note that the seasonality is for a broad region - if you want to fine tune your seasonality, it can be done in a few ways (providing us the seasonality based on your portfolio, or by setting seasonal base prices)
  3. Next we apply day of week adjustments. These are also based on historic performance in a very localized area. These can also be fine-tuned using customization options on the UI.
  4. We then apply lead time adjustments based on how far out a date is (think last min discounts and far out premiums). These can be controlled/adjusted as well.
  5. Next we apply event/holiday factors - note that we don't do this using a calendar of events and holidays, but based on abnormal booking behavior (occupancy levels and prices for vacation rentals and hotels for future dates) in a very localized area - this helps identify demand surges caused by events that are not well publicized online. 
  6. Any customizations (e.g., decrease prices for 2 night gaps by 20%) and date specific overrides (for example, to further increase prices for New Year's eve by 20%) are applied next.
  7. Lastly, we make sure the price doesn't go below the minimum price, and above the maximum price you set. You can also set different min and max prices for certain seasons and holidays.
    Do note that if you chose a date override and set a fixed price for some dates lower than the lowest rate, then those fixed overrides will still get used.
Hope this helps get a good sense of how we calculate prices!

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