Many real estate agents gripe that automated home valuations frequently mislead homeowners and can create unrealistic expectations among seller clients.
But some owners and hosts of short-term rentals apparently have no problem delegating pricing to algorithms.
Beyond Pricing, the provider of a dynamic pricing platform designed to maximize rental revenue for Airbnb hosts and property managers, has raised $1.5 million in a seed round that’ll help the startup expand its global footprint.
The company aims to “replace the simple or nonexistent pricing strategies” used by people who rent out units on Airbnb — and, eventually, other short-term rental platforms like HomeAway and Booking.com — with algorithms that crunch an array of data points.
Beyond Pricing is currently providing its service to short-term rental hosts and owners in 20 global markets, and claims to have earned users nearly $10 million in bookings by boosting average monthly revenue by 10 to 40 percent.
Beyond Pricing explainer video
“We are excited to use this funding to empower the microentrepreneurs and property managers that drive this rapidly changing sector of the accommodation industry,” said Ian McHenry, co-founder of Beyond Pricing, in a statement.
Beyond Pricing’s funding round was led by Resolute Ventures with support from Social Leverage, Structure Capital, Nas’ QueensBridge Venture Partners, and various angel investors.
The startup’s software calculates demand for a rental on any given day by crunching data from dozens of sources, including vacation rental sites, hotels, weather, airline arrivals and a proprietary algorithm, and then sets prices accordingly.
Beyond Pricing may recommend raising or lowering rates on certain days depending on all those factors, potentially helping short-term rental hosts rake in more revenue than they would have if they kept rates fixed.
Like home valuations, one factor that the algorithm may not fully take into account is the condition of a home.
That can materially impact the value of a home, sometimes accounting for the gap between its automated valuation and its actual value.
But in the rental industry, where the financial stakes are much lower on a per-transaction basis than in the home sales market, hosts and owners may often view using a pricing algorithm as a step up from just winging it.
Besides integrating with Airbnb, Beyond Pricing has also brought its technology to a network of short-term rental property managers and hospitality brands, including Onefinestay, MyVRHost, Guesthop, Proprly and Lokappart.