Dumping in Short-Term Rentals
Why are bookings declining in short-term rentals, and what does dumping have to do with it? This article explores who lowers prices and why, the risks of price wars, and how they undermine profitability across the market. Instead of competing on price, we outline practical strategies: increasing property value, building a strong unique selling proposition, and implementing smart pricing to maintain stable income even in a highly competitive environment.
You notice that bookings have decreased, and your first assumption is seasonality. However, after checking competitors’ listings in your area, you see that similar properties have suddenly dropped in price by 30–40%. It may seem like the market has declined, but in reality, you are facing dumping — the intentional reduction of prices to quickly fill the calendar or push out competitors. This is a price war that is almost impossible to win in the long run, as overall margins eventually shrink for everyone involved.
Why Owners Resort to Dumping
“Better Than Vacancy” Tactic
Some property owners live in another city and are willing to rent out their apartment nearly at cost just to avoid vacancy. In their view, any income is better than none.
Seasonal Desperation
During the low season, some landlords aim merely to cover utility bills and mandatory expenses without considering the long-term impact on their pricing strategy or the market as a whole.
Artificial Rating Growth
Lower prices generate faster bookings and more reviews. This helps achieve “Superhost” status or a high rating, after which the owner plans to increase prices. While this may be seen as a short-term investment in reputation, it still puts downward pressure on the market.
Strategy of Large Players
Property management companies and rental networks operate under different financial models. They can afford temporary dumping on selected units, compensating losses through overall portfolio turnover. Private owners typically do not have such financial buffers.
Why You Should Not Join the Race to the Bottom
By lowering your price in response to competitors, you weaken your own market position. Extremely low prices often raise suspicion among guests: if it is cheap, there must be hidden issues. In addition, the budget segment tends to attract more demanding and potentially problematic guests who expect maximum service for minimal cost.
At the same time, you devalue your own work and investments in renovation, furniture, and equipment. Restoring previous price levels after a prolonged period of discounts is significantly more difficult, as guests become accustomed to the lower rate. Widespread dumping gradually reduces the average daily rate in the area, pushing the entire market toward minimal margins.
An Alternative to Dumping: Increasing Value
Professional Property Presentation
The winner is not the cheapest listing but the one that is clearly positioned and professionally presented. Descriptions should be specific and visual — not simply “apartment with renovation”, but an interior defined by a particular style and distinctive details. Photography is a sales tool: proper lighting, thoughtful staging, and clean angles directly influence conversion rates.
Fast response times and professional communication build trust even before check-in. Creating a comprehensive guest guide — including directions from the nearest metro station, local recommendations, and clear check-in instructions — enhances the overall experience and strengthens guest loyalty.
Creating Your Own USP
A unique selling proposition cannot be replicated by a simple discount. An extended set of hygiene products, a mini first-aid kit, and a well-equipped kitchen demonstrate care. A coffee station with a capsule machine or freshly ground coffee adds emotional value and supports a higher average rate without resistance from guests.
Contactless check-in via a smart lock makes the process convenient and modern while reducing operational costs associated with keys and in-person meetings. Partnerships with local cafés, pizzerias, or taxi services further enhance your value proposition and provide guests with tangible benefits.
Smart Pricing and Financial Control
Before adjusting your rates, you must clearly understand your financial model, including utilities, cleaning, platform commissions, and depreciation of furniture and appliances.
If your rate drops below the level required to cover expenses, you are effectively paying for the guest’s stay out of your own pocket. Such a strategy may be acceptable only as a short-term tactical move with precise calculations, but not as a permanent operating model.
Instead of lowering prices daily, use targeted tools: discounts for longer weekday stays, special business travel rates, or promotions for low-demand dates. Shift the focus from price to value by emphasizing your advantages in the title and description, highlighting service standards, cleaning quality, and additional amenities. High-quality photos and videos help redirect attention from the price tag to the lifestyle experience you offer.
Conclusion
Dumping is a short-term tactic with long-term losses. Sustainable growth in short-term rentals is built on systematic work with quality, service, and financial management. Those who understand their unit economics, position their property effectively, and create genuine value for guests ultimately earn more and achieve greater stability — even if their apartment is not the cheapest in the neighborhood.