Optimizing for demand is often one of the most difficult tasks as a make as a property manger, but with a few useful strategies you can create a strong framework to help maximize occupancy and not lose out on valuable revenue. Here are 5 of the best strategies I've found to help PM's and owners better manage and optimize minimum night requirements and length of stay pricing.
Strategy #1: Know the Length of Stay In Your Market: This can vary seasonally. In general, if you know the average length of stay is 3 nights in the Fall and Winter, and 5 nights in the Spring and Summer, then you’ll be able to focus on getting the price right for the majority of demand.
Strategy #2: Pricing your 7-14 nights or more demand more aggressively (even if there isn’t a lot of it) can bring big wins. If you can offer even a 5% discount for this type of longer stay, you’ll reduce the risk of gap nights, and have less churn on your property. To achieve this, do not only utilize your revenue management system, but also consider activating additional merchandising on Airbnb, Booking.com or VRBO. Depending on exactly what strategy you decide to implement, you may be able to get an added tag or better page placement too.
Strategy #3: Pricing your 15+ night demand even more aggressively (even if there isn’t a lot of it) can bring bigger wins. This is an opportunity to capture the digital nomad. To capture this longer length of stay, it may also be important to ensure your description is updated to mention the quality wifi or adequate office space and comfortable desk. These types of travelers might find your property with a small discount of 5-10%, but if the content is also speaking to this shopper, you are even more likely to convert.
Strategy #4: Determine your lowest occupancy day of the week, and adjust the price down only on that day. In traditional vacation rental markets, it’s typical to see busier weekends, but super slow periods during the week. For example, the least-filled day is typically Wednesday. Though you may not have much demand in your market for stays that overlap a Wednesday, if you price just that one day aggressively, you will be in a better position to snag those few customers.
Strategy #5: Managing gap nights can be addressed through revenue management best practices and a specific operational approach. Though your revenue management system can help address gap nights in-between stays by automatically offering a 1 or 2-night minimum, putting operational practices in place can also support your sales efforts. When your system identifies a 1 or 2-night gap between two reservations, you can make an effort to price strategically and find new demand to fill those dates, but you can also work to extend the stay of the existing guest. Sometimes offering the additional night to stay longer or arrive earlier at a small discount can be the additional incentive needed for the guest to pay for another night. By balancing your system capability with an efficient operational best practice, you’ll truly be able to maximize occupancy.
|Heather Richer has a broad background in lodging with experience in both short-term rentals and hotels. She is passionate about revenue management and currently serves on the Revenue Management Advisory Board for HSMAI. Having been involved with other organizations like AHLA, HEDNA, and VRMA, she sees the value in education and unbiased resources needed for the underserved community of short-term rental homeowners. Heather is currently Principal, Richer Logic Consulting and Board Member for the Association for Short-Term Rental Homeowners. She previously held the CMO position at RedAwning, and prior to that, she served as VP, Revenue Management and Distribution at Kimpton Hotels and Restaurants. She holds her Masters in Tourism Administration from George Washington University|
About The Association for Short-Term Rental Homeowners (ASTRHO.org)
ASTRHO.org is a not-for-profit focused on education and professional development for the short-term and vacation rental homeowner. Whether you’re buying a home, self-manage, or hiring a property management company, ASTRHO is built for all homeowners. The community is built to bring homeowners together in new and better ways, learn from experts in the space, and to provide important perks and benefits. Short-term and vacation rental homeowners are critical stakeholders in the lodging industry and ASTRHO is a community platform to support their interests and issues.