5 Most Common Property Manager Pricing Mistakes

Time after time we see property managers making the same errors in revenue management strategy and missing out on opportunities to optimise their revenue. Are you making any of these common mistakes?

1. Wrong target metric

Do you gauge your success purely by achieved ADR or occupancy? This is a key mistake that many property managers make, resulting in counterproductive methods.

Let’s have a look at 2 identical units over 30 days. Property 1 achieved its target ADR of $175/night, but only achieved 50% occupancy. Property 2 achieved its 90% occupancy target but charged $100/night. Property 1 focused on ADR and received $2,625, whilst Property 2 focused on occupancy rates and received $2,700. 

So what is the best way? By aiming to maximise RevPAR, you can strike a balance between ADR and occupancy.

For example, if you only achieve the middle ground between the 2 examples’ targets (an ADR of $137.50 and 70% occupancy), you would still net a whopping $2887.50.

High revenue isn’t just about high rates or high occupancy and so your performance targets shouldn’t be either. Achieving a balanced view will help you to optimize revenue.

2. Pricing too low

At one time or another, you may have come to the painful realisation that you have left money on the table: anyone can achieve high occupancy with an underpriced unit, and high occupancy rates far in advance should be as alarming as low occupancy rates too close to the check-in date.

Have you opened availability for your listing and has it booked out too far in advance of check-in and your booking curve? If so, the chances are that your rates were too low. 

Although it is true that your pricing won’t be perfect at all times, tracking, forecasting, and pacing are all essential to a successful strategy. If you recognise that bookings are pacing too fast after selling 10% of your availability, you can adjust your rates accordingly and make much more profit on the remaining 90%.

3. Flat rate or pricing without data

Are you using data? Are your rates informed? Are your rates accounting for the factors underpinning dynamic pricing? If the answer is no to any of these questions, you are almost certainly losing revenue. 

Even if you manage to price as close to a property’s ‘true’ ADR, the average rate is not the price a unit is most commonly booked at, it is only the mean of all booked nightly rates. In other words, every time you advertise or sell your listing at exactly the average, there is a high possibility that, with so many factors affecting demand or value, you are either reducing your chances or a booking or missing out on potential revenue. 

If your rates are not informed, your revenue will suffer.

4. Set and forget

Setting your prices and not adjusting them is outdated. Even if the initial rates are accurate, there is no fluctuation as a check-in date approaches and demand changes.

Additionally, if you are not analysing your performance and reviewing your pricing, you cannot recognise if you are overpricing and losing occupancy or underpricing and leaving money on the table.

5. Starting at your target ADR

New listings have a short-lived ‘promotion’ in OTA search rankings, but this is hard to regain if you don’t maintain it. In order to preserve increased exposure, your clicks must be converted into bookings. The best way to maximise this conversion is to initially set sub-maximal rates, which will increase the perceived value of a listing.

Moreover, a new listing’s potential maximal daily rate will be inferior to its long-term maximal daily rate due to lack of ratings and reviews and this should not be forgotten. The majority of OTAs will have settings for introductory offers to exploit this situation. 

Reduce your rates for the initial bookings to maintain your listing’s visibility. Long-term prosperity from a listing’s increased exposure will be sure to make up for lower revenue on initial bookings.


The fragmentation of the short-term rental industry has meant that revenue management is still in its infancy. Your revenue management strategy should be based on selling your property to the right person at the right time for the right price. Occupancy and optimal rates come hand in hand: it is crucial to get the best balance of high rates and high occupancy and so make sure you are staying up to date on performance and market trends.

For more help on pricing read up on data use cases here. Are you interested in becoming a revenue management expert? Complete our short-term rental revenue management course and learn how you can maximise the revenue from your inventory.