Dynamic Pricing Engine for vacation rentals


Airgreets uses Dynamic Pricing algorithms from tetrel to set optimal prices for vacation rentals and increase revenue.

Situation and challenge

Airgreets manages short-term rentals for apartment owners. As a full-service provider, Airgreets guarantees the best possible rental - including pricing that ensures maximum returns for the owner.

The optimal price for an apartment depends on several factors: Size, amenities and location are among the driving factors for the market price of apartments. If seasonal markups, such as those for Oktoberfest, are not taken into account, the owner will miss out on valuable revenue as a result. And finally, the optimal price is also determined by the desired occupancy rate - 100% occupancy does not always correspond to maximum revenue. This is where tetrel was asked to help.

Dynamic Pricing based on market prices and seasonality

Based on an analysis of over 15,000 apartment ads in relevant cities, tetrel's Dynamic Pricing Engine determined the influences of location, amenities and seasonality on market price and occupancy. To estimate the attractiveness of the apartment's location, more than 50,000 relevant locations such as cafés, restaurants and landmarks were identified and their distance to the apartment calculated.

A machine learning model predicts possible price points and expected occupancy rates for given apartments. Based on this, the optimal price for the apartment is determined.

This allows Airgreets to offer landlords optimal pricing for new apartments from day one.

Daily
accurate calculation of the market price for all apartments
<10%
deviation of the median market price prediction
Optimal
price suggestion for desired occupancy rate