Never Set It & Forget It
If you’re a current short term rental owner, you’ll understand the challenges that come with precise pricing. How do you know which dates are in demand? Do you price high and just hope for the best? What about factoring in data intel such as booking windows, revPAR, & average nightly rate?
When Jasmine S. joined our program she had been renting her one bedroom property for two years on her own. We weren’t exactly shocked to discover her calendar looked liked the following:
Nearly every weekday was set at $85/night and every weekend at $125/night. When we asked her what her pricing strategy was, she responded:
I don’t have a ton of time so I prefer just to set it and forget it. Sometimes Airbnb makes smart pricing suggestions, but most of the time I ignore the pricing calendar entirely.
We knew we had an opportunity to swoop in and make improvements immediately. We promptly put our pricing tool to work and enhanced the following:
Seasonal Rates. With 1000’s of data points already gathered for her zip code, we established a new set of rules based on historical & predicted seasonality. This includes the large seasonal chunks (i.e. Summer vs Winter) but also factors in known holidays, weekend festivals, big sporting events, and so on.
Minimum Night Stays. A booking calendar is like Tetris, and we are looking to get it perfect. We setup custom minimum night stay requirements that required longer stays for advanced bookings but permitted shorter last minute stays. This meant a guest may not be able to book a one night stay on Christmas Eve months away, but could book the open Wednesday night this week. Supporting robust minimum night stay logic allows for us to grab the biggest reservations first but still fill in the blanks to optimize revenue.
Dynamic Pricing. Gone are the days of rack rates! We setup nearly 365 unique rates for the next year of Jasmine’s property. These individual daily rates factor in her base rate, seasonality, and demand factors. Impressed? Wait, it gets better — every single day thereafter Jasmine’s prices updated dynamically.
After the first month, the results were already astounding. Comparing revenues from 2021 to 2020, we increased revenues nearly 37%. Moral of the story? Please don’t set it and forget it.
