How dynamic pricing can increase revenue for boat rentals

Imagine increasing your boat rental revenue simply by adjusting prices to match demand. Charge more during peak months and less during your off-season. It’s possible with dynamic pricing!

Dynamic pricing allows you to set rules that adjust your rates during your busy and slow periods to optimize your inventory and maximize your sales. 

How does dynamic pricing work?

Dynamic pricing enables you to set and adjust pricing based on capacity of your watercraft or time of booking. For example:

• Increase your ticket price for the last 10 seats on your boat. 
• Offer a 10% discount to bookings made 30 days in advance. 

These rules allow  you to maximize profits during peak times and fill off-season slots.

Compared to static pricing, capacity-based dynamic pricing gives you a competitive advantage by adjusting prices based on how many boat rentals or boat seats you have available.

Time-based dynamic pricing allows you to incentivize your customers by booking early or to maximize revenue for last-minute bookings. 

We see flexible pricing all the time in travel. Hotels and car rentals have higher prices during peak season, and even peer-to-peer rentals such as Turo and Airbnb use dynamic pricing based on area demand.

Kona Honu Divers uses dynamic pricing to reward early bookings and maximize earnings with last-minute bookers. They’ve used FareHarbor’s dynamic pricing models for boat charters to make the first few spots of each tour cheaper, providing a benefit to those who book early.

Benefits of dynamic pricing for boat rentals

During peak season, dynamic pricing can increase sales by utilizing demand-based pricing for rentals. With time-based, capacity-based, or a combination of the two rules, those last few rentals you have open during peak season could net a higher overall revenue.

During slower seasons, set dynamic pricing rules to a lower price which may fill bookings that otherwise would go empty.

Dynamic pricing lets you spend less time adjusting rates. Set your rules and let the system do the work, so you can focus on what matters most — more time on the water and less in the office!

Pro Tip: Finding the best dynamic pricing rules for your unique business may take some trial and error. Test your new rules to ensure your pricing is working how it should — making you more revenue and filling up your bookings. 

How to implement dynamic pricing

FareHarbor’s pricing tools allow you to create capacity or time-based rules that automatically modify pricing based on those rules.

Here’s how it works in practice:

• Raise prices by 20% when three spots remain
• Apply a $20 discount to the first five bookings
• Raise price by 10% up to 24 hours before start time
• Set a 10% discount for bookings made a month in advance

 

Additionally, you can choose what items and  customer types are affected as well as if these rules apply to online, direct, or both booking platforms.

 

FareHarbor will work with you to analyze your booking data and suggest recommendations for dynamic rules. While we love the set-it-and-forget-it approach, take time each quarter to review and improve your dynamic rules. 

Common mistakes to avoid

Ensure your peak-time pricing stays competitive. If you notice that your abandoned carts are increasing, dial back the price hikes. Increased revenue for peak season is nice, but no bookings during peak season are harmful. 

Alternatively, don’t underestimate off-season opportunities. You know your fixed costs and under-pricing off-season could put you in the red. Don’t go below your surplus from peak seasons or your fixed costs.

Dynamic pricing avoids peaks and pitfalls, ensuring you stay competitive without scaring off customers.

More time for boating

With dynamic pricing, you’ll boost bookings, increase revenue, and spend more time doing what you love — serving your customers.

Ready to get out of the office and back on the water? Let FareHarbor help you implement smarter boat rental revenue strategies.