How To Price a Vacation Rental | Our Revenue Strategy

How We Price a Vacation Rental: The Data Behind Our Pricing Strategy

If you own a vacation rental, you’ve probably asked yourself one deceptively simple question:

What should I charge per night?

Maybe you pull up Airbnb, look at a few nearby properties, find something comparable and price yours accordingly. Sounds reasonable, but it’s not really a pricing strategy.

A vacation rental doesn’t have one value. A Saturday night in June can have a completely different value than a Tuesday night in September. Holidays, local events, booking patterns, seasonality, supply and demand, and how far in advance someone is booking can all affect what a guest is willing to pay.

That’s why at Nomad, we don’t simply “set the rates.” We actively manage revenue.

A Full Calendar Isn’t Necessarily the Goal

This is one of the most important concepts for vacation rental owners to understand.

It feels really good to look at your calendar and see every weekend booked. But what if those guests would have paid more?

If your property books every Saturday three months in advance while comparable properties are commanding higher rates, filling the calendar may actually mean you’ve priced too low.

On the other hand, charging a premium rate doesn’t do you much good if nobody books it.

The goal isn’t maximum occupancy.

And it isn’t the highest nightly rate.

The goal is finding the right balance between rate and occupancy to maximize the property’s overall revenue.

At Nomad we target 70% occupancy and that’s where revenue management comes in. (What does that translate to in dollars? See what a Jacksonville Beach home actually generates.)

Why We Use Dynamic Pricing

Demand for vacation rentals changes constantly, so our rates do too.

We use PriceLabs to dynamically adjust rates based on factors such as seasonality, day of the week, local demand, booking windows and market conditions.

That gives us a strong starting point, but here’s something else we think is important:

A pricing tool is still just a tool.

We don’t turn on an algorithm and walk away.

Market Data Gives Us Context

We also use AirDNA to understand what’s happening in the broader short-term rental market. This helps us look beyond one property and ask questions like:

• What’s happening with demand in this market?
• How are comparable properties performing?
• Is occupancy changing?
• Are average daily rates moving?
• Is supply increasing?
• Are we seeing seasonal shifts?

That context matters.

If bookings slow down, lowering the price isn’t automatically the answer.

We first want to understand why.

Sometimes the Problem Isn’t the Price

This is where things get especially interesting.

Imagine your property is getting plenty of views on Airbnb but relatively few people are actually booking it.

Is the price too high?

Maybe.

But what if guests are clicking on the listing and something else is stopping them from booking? Maybe the first five photos aren’t compelling. Maybe the title isn’t communicating what makes the property special. Maybe your amenities don’t compare well with competing properties.

Lowering the nightly rate wouldn’t necessarily solve any of those problems.

This is where SherpaData comes in. Sherpa Data is a short-term rental operating system built by our co-founder, Josh, after we ran into a problem within our own property management business: we had plenty of data, but it lived in different places, across different software products. 

Our property management system knew one thing. Our pricing software knew another. Airbnb had its own data. Market data lived somewhere else. Getting a clear picture of how a property was actually performing meant piecing all of that information together.

Sherpa brings those systems and their data together so we can see the bigger picture.

This means with SherpaData’s revenue management tool, RateAlpha we can look beyond simply asking, “Is our nightly rate too high?” We can examine how the property is pacing, how rates compare with the market, how the listing is converting, and other performance signals that help us understand why a property may be underperforming.

Instead of immediately lowering the price, we can ask the much more useful question:

What’s actually preventing this property from performing better?

Then There’s the Human Layer

We love data and we love technology. That’s why we built some of our own. But vacation rental revenue management still requires human judgment.

Technology can identify patterns incredibly quickly. An experienced revenue manager can add context, interpret what’s happening in the market and decide which levers actually make sense to pull.

Our pricing strategy therefore isn’t one tool.

It’s layers:

Dynamic pricing + market data + our own performance analytics + experienced human judgment.

Why Does All of This Matter to an Owner?

Because seemingly small pricing decisions compound.

Imagine leaving $50 on the table for one Saturday night.

Not a huge deal.

Now imagine doing it across multiple high-demand nights throughout the year.

Or consider the opposite problem: holding rates too high and allowing nights to sit empty that could have generated revenue.

Both have a cost.

Good revenue management is about continually looking for that balance.

What We’ve Learned

After years of managing vacation rentals, one of the biggest lessons we’ve learned is that pricing can’t happen in a vacuum.

You have to understand the property.

You have to understand the guest.

You have to understand the market.

And then you have to pay attention to what the data is telling you.

Sometimes that means raising rates.

Sometimes it means lowering them.

And sometimes it means realizing that pricing wasn’t the problem in the first place.

The Bottom Line

If your vacation rental is consistently booked, that doesn’t automatically mean you’re maximizing its potential.

If it’s sitting empty, that doesn’t automatically mean you need to lower your rates.

The better question is:

Is this property generating the return it should be generating?

That’s the question we’re ultimately trying to answer when we manage revenue for our owners.

Because the goal isn’t simply to get bookings.

It’s to help the investment perform.

Want a number for your own property? Run it through our free rental calculator for a real projection based on comparable local homes.