In property rental, lowering rates might seem counterintuitive to increasing profits, but it’s one of the most effective strategies for ensuring long-term success in the competitive property rental market. By embracing a dynamic pricing strategy, property owners can adapt to market fluctuations, secure more bookings, and keep revenue flowing—even during low-demand periods. Lower rates don’t just prevent empty nights; they position your property for better visibility, improved rankings, and greater profitability in the future.
Hi, I’m Jason, a business journalist at Bukit Vista, a leading property management company in Bali. At Bukit Vista, we help property owners reach their full potential through tailored strategies, including dynamic pricing.
In this article, I’ll explain why lowering rates strategically—especially during low-demand periods—is essential to achieving higher profits over time. We’ll also explore a real-world comparison between two properties to illustrate the power of dynamic pricing.
Understanding Dynamic Pricing
Dynamic pricing is more than just adjusting rates. It’s a data-driven strategy designed to:
- Maximize occupancy rates by adjusting prices based on real-time demand and market trends.
- Optimize revenue potential during both high and low seasons.
- Enhance visibility on booking platforms like Airbnb, which prioritize properties with frequent bookings.
While dynamic pricing often involves raising rates during peak seasons, there are times when lowering prices is the smartest move. Even when rates drop to seemingly unfavorable levels, it’s still better to secure bookings than to leave your property unoccupied.
The Power of Dynamic Pricing: A Real-World Example
This real-life case study examines the performance of two identical villas—Villa Bukit and Villa Vista—located in the same area, offering the same amenities, and targeting the same market. Despite their similarities, their pricing strategies couldn’t be more different.
Villa Bukit embraced a flexible dynamic pricing strategy, allowing rates to drop below the average—even to the lowest in the competitive market—to secure bookings, maintain high occupancy, and generate consistent revenue.
Meanwhile, Villa Vista followed a conservative approach, keeping rates higher and avoiding significant reductions, aiming to protect its perceived value.
These contrasting strategies led to strikingly different outcomes. Let’s take a look at their performance.
| Metric | Villa Bukit | Villa Vista |
|---|---|---|
| In-Month Occupancy (%) | High (63%-84%) | Low (33%-49%) |
| Expired Dates (%) | Low (13%-30%) | High (42%-53%) |
| Monthly Revenue ($) | Higher ($7,764 - $8,736) | Lower ($4,184 - $4,672) |
What the Data Tells Us
Higher Occupancy = More Revenue
Dynamic pricing enables properties to adapt to market demand, and Villa Bukit exemplifies the benefits of this strategy. By adjusting its rates dynamically, the property captured demand even during low seasons, achieving significantly higher occupancy rates. This proactive approach ensured steady revenue generation every month, even when market conditions were less favorable.
In contrast, Villa Vista adopted a more conservative pricing strategy, which limited its ability to attract bookings. As a result, the property experienced lower occupancy rates and a higher number of expired dates, translating into missed opportunities and reduced revenue potential. The comparison underscores the value of flexibility in driving both occupancy and profitability.
Lower Prices, Better Outcomes
Lowering prices during low-demand periods isn’t a setback—it’s a strategic move that ensures consistent performance. For instance, Villa Bukit embraced flexibility by reducing rates, successfully securing bookings that would have otherwise been missed. This approach not only generated revenue but also kept the property visible and active in the competitive rental market.
On the other hand, Villa Vista held firm to higher price limits, leading to unsold nights and lost revenue opportunities. Empty nights don’t just mean zero income—they also reduce the property’s activity level, impacting its future visibility on booking platforms.
The lesson is clear: a lower rate is far better than no bookings. It’s a proactive strategy that drives occupancy, sustains cash flow, and positions your property for long-term success.
The Expired Dates Impact
Expired dates serve as a clear indicator of missed opportunities and lost potential revenue. Villa Vista’s high expired dates (42%-53%) reveal the consequences of failing to adjust pricing dynamically. By holding rates too high, the property missed out on attracting guests during low-demand periods, leaving many nights unbooked.
On the other hand, Villa bukit minimized expired dates (13%-30%) by embracing flexible pricing. This approach allowed the property to fill more nights and maximize its revenue potential, even in challenging market conditions. The stark contrast highlights the importance of dynamic pricing in reducing unutilized inventory and maintaining a property’s competitiveness.
Why Lowering Rates Makes Sense
Managing property revenue effectively requires both flexibility and strategic insight. Lowering rates is sometimes the smartest move to protect a property’s long-term success. A thoughtful approach to dynamic pricing, like the strategies employed by industry leaders, can help property owners navigate challenges while maintaining consistent growth.
Optimizing Dynamic Pricing for Long-Term Gains
A well-executed dynamic pricing strategy, as demonstrated in Bukit Vista, focuses on:
Dynamic pricing isn’t just about setting rates—it’s about using smart strategies, backed by expertise, to adapt to market conditions, capture opportunities, and ensure consistent performance year-round.
Final Thoughts: Why Dynamic Pricing Matters
The comparison between Villa Bukit and Villa Vista demonstrates one critical truth: flexibility in pricing is a long-term win. By adopting dynamic pricing and adjusting rates strategically, you can:
- Capture more bookings and reduce empty nights.
- Maintain steady revenue, even during low-demand periods.
- Strengthen your property’s position in the competitive rental market.
Dynamic pricing isn’t just about setting rates—it’s about transforming challenges into opportunities and unlocking the true potential of your property.
At Bukit Vista, we are the trusted partner for property owners in Bali, helping them achieve excellence in the short-term rental market. Our tailored strategies, market insights, and dedication to innovation empower property owners to reach the top 1% of the rental market. With Bukit Vista, you’re not just navigating the property market—you’re rising to the top.
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