Data-Driven Pricing for Vacation Rentals: How to Use Data to Set a Better Rate in 2019

1. How to Use Data to Make Pricing Decisions
Frank Golden Director of Sales
James Solada Director of Marketing
Data-Driven Pricing:

2. Who We Are?
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3. Learning Objectives
⋅ Understanding market demand curves
⋅ Understand the pros and cons of different
pricing strategies
⋅ How to improve your pricing for 2019
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4. What is Dynamic Pricing?
Changing your price based on
changes in supply and demand
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5. Some Quick Clarification
⋅ What is revenue management?
⋅ Selling to the right person at the right time for the right price
⋅ But also an include:
⋅ Dynamic pricing
⋅ Cancellation fee policies
⋅ Length of stay adjustments
⋅ Channel management
⋅ Promotions
⋅ Marketing
⋅ Today we are going to focus on the first part of revenue management: pricing
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6. Poll
What factors do you currently use to adjust prices?
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7. What do we know about
demand?
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8. Demand Changes A Lot
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2018 Puerto Vallarta Short-Term Rental Occupancy Rate

9. Demand Changes A Lot
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2018 Hilton Head Short-Term Rental Occupancy Rate

10. Demand Changes A Lot
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2018 Park City Short-Term Rental Occupancy Rate

11. Demand Changes A Lot
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2018 Auckland Short-Term Rental Occupancy Rate

12. As Demand Changes, So Do Prices
Price
Rooms Booked
High Season
Demand
Low Season
Demand
$200
$150
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13. 13
Sometimes, Supply Changes, Too
Price
Rooms Booked
2014
Supply
2015
Supply
$200
$150

14. 14
Available Airbnb Units Philadelphia
Hilton Head Seasonality
Christmas/
New Years
Spring
Break
Peak
Summer Labor Day Fall Weekends

15. What is Variable Pricing?
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Charging a different price for
different nights of the year

16. Poll
How many price seasons do you have per year?
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17. 17
All Managers (we hope)
Do Some Degree
of Variable Pricing

18. Homewood, Tahoe Manager Rate
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Undisclosed Manager’s Homewood Nightly Rates

19. Homewood, Tahoe Occupancy
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2017 Homewood Occupancy

20. Example Sophisticated Manager
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Sophisticated Manager Homewood Prices

21. Side by Side
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Sophisticated Manager Homewood Prices

22. 22
Thinking about 2019 Rates

23. Poll
How many hours do you spend setting up rates for next year?
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24. Key Principles for setting 2019 rates
⋅ The more data, the better
⋅ The more seasons, the better (within reason)
⋅ Incremental is OK
⋅ Plan Plan Plan...
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25. What to Look For - 2019
⋅ 2018 in review
⋅ portfolio-wide & listing-level
⋅ Seasons for 2019
⋅ Owner Expectations
⋅ Market Trends / Competitors
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26. Historical performance
⋅ Export Reservations to excel from your PMS
⋅ Key metrics to look at MoM via pivot tables
⋅ ADR $
⋅ Occupancy %
⋅ Revenue by stay date & revenue by booking date
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27. Portfolio-wide Insights
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28. Occupancy
last year
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Panama City Beach, FL

29. Lead Time
last year
⋅ Lead time ~60 days
in high season -
June
⋅ Holiday lead time
high too
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Panama City Beach, FL

30. Listing-level Insights
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31. Pelican Jack’s 5 bdrm - Navarre Beach, FL
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32. Pelican Jack’s 5 bdrm deep dive
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Pelican Jack’s 5 Bedroom in the Panhandle
1. Look at historical performance during high & low seasons
a. Highlights + lowlights
b. Abnormalities
2. Impact on revenue
3. Competitive overview

33. High Season in review
When you do this, you can quickly see that this unit was 100% occupied
from May’18 until Aug’18 at an ADR of $932.
Takeaway: increase price for summer period
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34. Low Season in review
You can also see that shoulder season (Oct-Dec) occupancy was stronger in
2018 than 2017.
Takeaway: lowering rates during Nov & Dec lead to increased occupancy...
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$400
28%
a 24% rate decrease YoYa 67% increase in occupancy YoY

35. 35
$3,493
… and increased revenue!
This property made $4,800 Dec’18 vs. $3,493 Dec ‘17
a 37% increase in revenue YoY in one month
Revenue impact

36. Competition
Push rates higher in the summertime where it sells out
Bring rates a bit lower in the low season to drive more occupancy
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Lower in low season
Push higher in high season
Don’t miss events!

37. Planning
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Once you have these actionable insights, we now need to put a
implementation plan in place
⋅ Project owner
⋅ Time needed to input seasons & rates for (x hours)
⋅ Do owners need to review?
⋅ Will this change anything on distribution?
⋅ Go-live date
⋅ Review after 2 weeks once you have booking data and compare
booking pace YoY

38. Key Takeaways
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⋅ 2018 in review - look at the account & listing level
⋅ ADR $
⋅ Occupancy %
⋅ Revenue by stay date & revenue by booking date
⋅ How to stay competitive
⋅ Push rates higher when demand is high
⋅ Bring rates a bit lower in the low season to drive more occupancy
⋅ Put an implementation plan in place

39. Things we didn’t cover today
⋅ Last minute discounting strategies
⋅ Gap filling
⋅ Minimum night stay rules
⋅ Specials
⋅ Wholesale
⋅ Distribution
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40. Connecting your PMS
will unlock...
listing-level performance dashboards
portfolio-wide performance dashboards
free market data & comp shopping tool
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Not an excel junkie? we may be able to help

41. Let’s get in touch!
Contact:
frank@beyondpricing.com
www.beyondpricing.com
Twitter: @beyondpricing
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