Managing vacation rentals isn’t like managing a hotel. There’s no such thing as a “standard room” you can easily compare to the competition. Every rental is unique—with its own character, location, target audience, and even seasonal demand.

That’s why smart property managers rely on one key component of their pricing strategy: the base price.

Think of the base price as the foundation of a house: invisible, but critical. Everything else—event surcharges, seasonal minimums, long-stay or last-minute rules—are like windows and doors that open and close as needed.

Defining a solid base price for each of your units allows you to make faster, more strategic decisions and adapt your pricing dynamically as market conditions shift.

But how do you assign a fair price to each property, especially when you’re trying to factor in things like amenities, décor, recent renovations, or even better reviews?

That’s exactly what this article is here to help with: we’ll explain what a base price is, how to determine it, and how to adjust it over time to maximize your earnings.

What is a base price?

The base price (or starting price) reflects the inherent value of each unit across different periods of the year.

It’s not the final selling price, but the reference point—your baseline—for calculating all the final rates.

When setting your base price, you should factor in:

• The amenities provided (A/C, equipped kitchen, etc.)
• The property's location and style
• Past performance (occupancy rate, ADR, seasonal demand trends)

A common mistake is assigning the same base price to all units just because they have the same number of rooms. But even two apartments in the same building or neighborhood can have very different value.

For example, a two-room unit on the top floor with a view and designer furnishings can command a much higher price than a similar one on the ground floor that’s outdated and lacks natural light.

Or: a beachfront apartment without A/C and with late-night noise might be worth less than one that’s a few blocks away but quieter, better equipped, and has glowing reviews.

That’s exactly what a base price helps capture—these subtle but crucial differences.

The most common mistake: treating your base price as a fixed number

One of the most frequent mistakes among hosts and property managers is setting a base price once—usually when the listing is first published—and then never touching it again.

But a vacation rental isn’t static: your reputation can change (a few negative reviews are all it takes), services evolve (like new appliances, A/C, or a smart TV), the neighborhood changes (local events, new businesses), and so does demand (more international tourists, fewer business travelers).

That’s why using your base price as a fixed rate exposes you to several risks. Let’s take a closer look.

1. Lost revenue and missed bookings

An inaccurate base price can hurt your performance in two opposite ways.

If it’s too low, you’ll fill your calendar easily, but leave money on the table, especially during high-demand periods. Even with full occupancy, low rates can cost you hundreds in missed revenue each month.

If it’s too high, your calendar might stay empty in slower periods or when bookings are last-minute. Even a €20 difference from your competitors can cause you to lose key reservations.

The base price should be balanced and adjustable—not fixed. It’s a starting point, not a ceiling.

2. Lower visibility on booking platforms

One less obvious side effect of a poorly set base price is reduced visibility on OTAs.

Booking platforms tend to promote listings that get regular views and bookings when demand is active. If your base price is too high and doesn’t attract enough attention during key booking windows, your listing may drop in search rankings.

Conversely, if the price is too low and your calendar fills up too far in advance, your listing might disappear from results once it runs out of availability and the algorithm stops pushing it.

How to determine the base price for your vacation rental

To set the right base price for your property, you need to start with the data—both internal and external. Here are three key pillars to help you define a base price that’s both competitive and sustainable.

1. Analyze your property’s historical performance

If your listing has been live for at least a year, you already have the data you need. Look at:

• The average daily rate (ADR) in high and low seasons
• Occupancy rates by month
• Which price points brought in the most profitable bookings

Example: If you consistently sell at €120 in summer and your lowest sustainable price in the off-season is €80, then a base price of around €100 could be a solid starting point for dynamic adjustments—both upward and downward—throughout the year.

2. Study your local competitors

Looking at comparable listings is essential, but needs to be done carefully. Focus on listings with:

• Similar number of bedrooms and sleeping capacity
• Comparable amenities (balcony, A/C, full kitchen, etc.)
• Similar location and visual quality (photos, reviews, décor)

Don’t just look at the prices: check how booked their calendars are. If a similar unit is filling up fast at a certain price, that’s a strong signal.

Avoid blindly copying your neighbors. The value of your listing also depends on less visible factors like guest experience, attention to detail, or your review history.

3. Use data to position yourself in the market

To set a realistic and competitive base price, it’s not enough to look at your past performance. You also need to understand your position in the current and future market.

Useful data points include:

• Seasonal demand trends in your area: know which months are strong, which are slow, and how bookings are distributed across the year.
• Local events and holidays: trade shows, concerts, long weekends, and school breaks can boost demand. Your base price should account for these periods, at least in the surrounding weeks.

How to determine the base price for a new property (with no booking history)

Even if you don’t have any historical data yet, you can still estimate a base price by starting with:

• Comparable listings online: Search for properties in your area with similar features (number of rooms, amenities, aesthetics, location). Analyze their prices and identify market trends, including minimum and maximum rates. To speed things up, you can use our free tool Smartfree: simply select your property, and the software will automatically generate a list of the most relevant competitors for you, showing their price trends over a 12-month period.
• Perceived value of your offering: After analyzing the competition, ask yourself whether your property offers more (e.g. recent renovation, stylish design, added services) or less (e.g. dated furnishings, less central location) than the average. This will help you position your base price fairly, without necessarily being cheaper.

How often should you review your base price? What should you monitor?

While your base price doesn’t need constant tweaking, it shouldn’t stay the same for too long. Markets evolve, your property changes, and traveler behavior is anything but static. So you should regularly ask: “Is this property’s base price still accurate for this period?”

In fast-moving markets or areas with strong seasonality, reviewing your base price once a month is ideal. In more stable contexts, a quarterly review might be enough.

Here are some key signals to monitor:

1. Selling prices are consistently far from your base price

If you’re often discounting by 25–30% just to sell certain nights, your base price is probably too high for that timeframe. Maybe it’s stuck at a level from a past high-demand season, or no longer reflects a drop in demand or property reputation.

On the other hand, if you’re filling up easily without discounts and getting lots of early bookings, your base price may be too low. In that case, you have room to increase it gradually—at least for the following quarter.

2. Changing KPIs

Beyond dynamic pricing trends, it’s crucial to keep an eye on performance indicators that might signal when it’s time to adjust your base price:

Falling RevPAR

If revenue per available night is dropping despite stable occupancy, your base price may be too low for the property’s value.

Very high or very low occupancy

If you’re consistently above 85% in advance, you may be able to support a higher base price. If even strong weeks are slow to fill, the base price might be discouraging demand.

Shorter booking window

If bookings are coming in much closer to check-in, guests may not see your offer as good value for early planning. Consider offering earlier discounts or rethinking your base price positioning.

3. Seasonality and demand cycles

It’s not enough to just differentiate between high and low season. Even within a season, dynamics can shift:

• April may start slow and end with an Easter rush (or vice versa). You’ll want a base price that reflects these micro-trends—or plan a mid-month price review.
• Local events, festivals, or trade shows can spike willingness to pay for a few nights. In these cases, slightly raising the base price just for those days allows your dynamic pricing to start from a more relevant level.

Example: If your area hosts a popular music festival every July, attracting visitors for 3–4 nights, it’s smart to set a slightly higher base price for just those dates. This ensures your pricing algorithm starts at a level in line with expected demand.

Base, minimum, and maximum price: what’s the difference and how to use them together

If your goal is to build a dynamic pricing strategy, setting a base price isn’t enough. The system also needs clearly defined boundaries—so final selling prices can move based on demand, without going off track.

These boundaries are your minimum and maximum prices.

• The minimum price is your floor—going below it no longer makes sense. It should cover operational costs and maintain your property’s quality perception. Undercutting might fill your calendar, but it harms your margins and your brand.
• The maximum price protects you during high demand. It keeps your pricing from getting out of hand and becoming uncompetitive—even if your calendar is filling fast.

Example: If your base price for August is €140, you might set a minimum of €100 (to ensure costs are covered and remain competitive in slow periods) and a maximum of €200. All dynamic pricing will then move within this range, depending on real-time demand and the rules you’ve set.

You can go even further with custom rules, using your base price as a reference point for:

• Progressive last-minute discounts, e.g. –5% at 10 days, –10% at 5 days
• Automatic increases once occupancy reaches certain thresholds, e.g. +10% after 60% of nights are sold
• Variable pricing based on length of stay or day of the week (e.g. weekend vs weekday rates)

How Smartpricing’s base price works

Smartpricing is the dynamic pricing and revenue management software from Smartness. In Smartpricing, the base price is referred to as the starting price, and it’s the reference value upon which your entire pricing strategy is built.

In other words, it’s the “static” component of your strategy, used by the algorithm as a baseline to constantly calculate dynamic rates.

As discussed earlier, setting the base price manually is possible—but risky: even a small misjudgment during setup can compromise the entire strategy. With Smartpricing, your starting prices are suggested by a dedicated algorithm that generates an initial proposal by analyzing:

• Historical booking data: at least one year of historical and future bookings, pulled from your connected PMS
• Market price trends: collected by analyzing your competitors in the local area

Based on this data, the algorithm calculates starting prices for each unit and each timeframe, up to 500 days in advance, as shown in the sample screenshot below.

Of course, Smartpricing allows you to manually adjust your starting prices at any time with just a few clicks—great for fast updates across multiple room types.

Once your starting prices are set, the algorithm applies the most suitable dynamic strategy for your property by adjusting prices based on:

• Day of the week
• Impact of holidays and local events
• Your property’s current performance
• Market occupancy rate
• Booking window (lead time before check-in)

Clicking on any date within the Smartpricing calendar lets you see the full breakdown of factors that influenced the final price calculation.

How to use Smartpricing to analyze market occupancy

To keep both your starting prices and dynamic rates competitive, Smartpricing doesn’t just compare your listed prices, it also analyzes real market occupancy.

Thanks to the Strategic Market feature in the Market Analysis section, Smartpricing compares your occupancy trends with a selected group of competitors. You can accept the suggested competitors or manuallycustomizethelist to focus on properties you know are relevant.

The algorithm uses this comparison to define your starting prices and dynamically adjust your final prices in real time.

You can also control how much this parameter impacts pricing through the Market Occupancy Influence setting in the Strategy section. This gives you full control over how strongly market demand should influence your pricing, ensuring that your strategy always reflects real conditions.

Smartpricing isn’t just the easiest way to set your starting prices and build a dynamic pricing strategy that increases your revenue by an average of +30%.

Thanks to full integration with your PMS or Channel Manager, your final prices are automatically synced across all sales channels, eliminating hours of manual work and reducing the risk of errors.

At the same time, by using the other tools included in Smartness, you can execute a truly integrated strategy in just a few clicks: from email marketing to guest communication during the stay, all the way to upselling and cross-selling of extra services and experiences.

With Smartness, you can achieve all your growth goals without ease.

Want to see how it works?