VRS106 – How Dynamic Pricing Works with Evan Hammer of Smart Host

The story of how startup Smart Host came into being is a metaphor for the innovation we are experiencing in the vacation rental industry.

When the Startup Bus left New York in early 2014 heading for San Francisco, today’s guest Evan Hammer was at the start of a 72 hour trip that would culminate in winning the annual competition.

During that trip Evan, and the 3 others he met on the bus, developed an app to aggregate and analyse the market for short-term rentals leading the way to a dynamic pricing model. They called it Smart Host.

So what exactly is dynamic pricing?

This was the question I posed to Evan and he did a great job of explaining it. I then went a step further and spent an hour on the phone with one of Smart Host’s business partners, Nick Persico, who explained how it worked, along with the benefits owners and managers could expect to get.

Putting it simply,

‘the goal of dynamic pricing is to allow a company that sells goods or services over the Internet to adjust prices on the fly in response to market demands.’

It’s about predicting what a customer is willing to pay for a future period based on the data gathered from competitors (comps) over a period of time.

So, let’s say there is an annual event that brings people into your area. You know the demand will be high and you will easily rent that period. A dynamic pricing model can help you to set that price based on the historical data from similar properties.

Got it?

tweetTweet: Do you use #dynamicpricing for your #VacationRental? @evanhammer talk with @cottageguru http://ctt.ec/GSzHb+

Listen to this episode as Evan explains:

  • About the Startup bus and how winning the competition launched Smart Host to the market
  • What dynamic pricing, yield management and revenue management really means
  • Where the data comes from
  • Who can benefit from using dynamic pricing
  • How an owner/manager can define a ‘competitive set’

Definition of dynamic pricing

Where to find Smart Host

Where you can find Evan:

http://vr.smarthost.me/

Website

@EvanHammer

Twitter

https://www.facebook.com/evanhammer

Facebook

https://www.linkedin.com/in/evanhammer

LinkedIN

Evan Hammer

Heather — thank you for having me on the podcast! I had a great time chatting with you.

I’d love to answer any questions folks have about increasing revenue, figuring out optimal prices, or researching their competition.

Cheers,
Evan
evan@smarthost.me

Brian Barlow

Great podcast. I always had doubts that I was pricing my vr incorrectly (either too high or too low). I went to the smarthost website and setup a demo for tomorrow.

Heather Bayer

That’s great Brian – glad you enjoyed it and am sure you will get a great demo.

Heather Bayer

It was great to talk to you Evan – what a great concept.

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