Short-term rental operators don’t always need to set higher nightly rates to make more money.

New data from Hospitable found that properties using a dynamic pricing tool lowered average daily rates by 2.3 percent over a 12-month period, yet increased revenue per available rental by 11.6 percent and occupancy by 13.4 percent compared with a similar group using manually adjusted pricing.

“The instinctive reaction to a lower nightly rate is that you’ve sacrificed revenue. Our latest data tells a much more interesting story,” Pierre-Camille Hamana, CEO and founder of Hospitable, told REWire Media exclusively.

The findings suggest that small, timely changes in price may produce stronger annual returns than holding firm on a higher target rate.

“Revenue management is often thought of as finding the highest rate a guest is willing to pay,” Hamana said. “In reality, it’s about finding the price that delivers the strongest commercial outcome over time, and those aren’t always the same thing.”

Hospitable said the results for hosts using their dynamic pricing tool did not come from steep discounts.

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The average rate difference between the two groups was just 2.3 percent across the full year.

Dynamic pricing can also raise rates when demand supports it.

The tool responds in both directions, making adjustments based on changes that may be difficult for operators to spot manually.

“What’s particularly interesting is how little pricing had to change,” Hamana said. “

We’re not talking about slashing rates or competing on price.”

The results may also reflect changing guest behavior as travelers compare more properties and become more sensitive to even small differences in price.

“Sometimes the most profitable price isn’t the highest one,” Hamana said.

“It’s the one that delivers the strongest financial return by the end of the year.”

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