In the competitive short term rental market, developing a robust revenue strategy is crucial for maximizing performance. This process involves meticulous planning and ongoing management to adapt to market dynamics. This article is divided into two parts: Building the Strategy and Overseeing the Strategy, following the order outlined in our revenue management framework.
Part 1: Building the Strategy
1. Market Analysis and Comp-Set Review
A thorough understanding of your competitive landscape and market trends are critical.
Market Analysis: Conduct a comprehensive analysis of market trends, including seasonal demand, local events, booking windows and average lengths of stay. This helps in anticipating booking trends and crafting a strategy that actually works.
Comp-Set Review: Determine your competitive set (comp-set) to benchmark your pricing against similar properties. This includes reviewing their rates, availability, and amenities to ensure your property is competitive.
2. Pricing Strategy and Rate Optimization
To set the foundation for revenue management, it’s essential to establish a well-defined pricing strategy.
Price and Length of Stay Rules: By understanding market data, and performance a competitor analysis, set price and length of stay rules that will yield the best results. This includes; occupancy adjustments, adjacent stay rules, last minute discounts, orphan gap rules, and minimum night restrictions.
Rate Optimization: Set base prices that align with booking behavior and are competitive to your comp-set. We recommend live pricing for 12-months in advance and setting various rate adjustments for seasons, holidays, events, and far out pricing.
Part 2: Overseeing the Strategy
1. Occupancy Pacing
Monitoring booking patterns and adjusting rates based on occupancy levels is key.
Occupancy Pacing: Track and analyze booking trends for at least the next 120 days. Adjust rates dynamically to optimize occupancy, whether by increasing prices during high demand periods or offering discounts to fill gaps.
2. Competitor Tracking
Staying informed about your competitors' strategies ensures you remain competitive.
Competitor Tracking: Continuously monitor competitors' pricing and availability. Look for pricing anomalies and trends to adjust your rates and stay competitive. This proactive approach helps in capturing market share and optimizing revenue.
3. Event Planning
Maximizing revenue potential during peak demand periods is essential.
Event Planning: Identify and plan for local events, holidays, and high-demand periods. Adjust your pricing and availability strategies to capitalize on these opportunities. Consider implementing minimum stay requirements or special offers during these times.
4. Promotion Management
Promotions are an effective way to boost visibility and bookings.
Promotion Management: Develop OTA level promotional strategies to enhance your property's attractiveness. Use promotions strategically during off-peak seasons or low demand periods to maintain steady occupancy levels.
5. Performance Reporting
Effective management requires regular performance evaluation.
Performance Reporting: Implement a robust reporting system to track key performance indicators (KPIs) such as occupancy rates, Revenue per Available Room (RevPAR), and average daily rate (ADR). Regular reporting allows for timely adjustments and strategic decision-making.
Conclusion
By meticulously building and overseeing your revenue management strategy, you can optimize performance in the short term rental market. The integration of these two components—strategic planning and dynamic management—ensures that you stay ahead of market trends and maximize your property's revenue potential. Remember, the key to success lies in continual adaptation and refinement based on data and market insights.
🔗 To learn more about how Synchronest approaches revenue management, schedule a free strategy.
*Photography of L’Apogee Vacation
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