Pricing | Setting rates for revenue

. . .What’s the best rate for . . .

Pricing is a never ending chore because there are just too many ‘what if’s’ and ‘what’s going on’s’ with a mix of ‘who’s’ just for good measure to keep on top of it! 

Price Guessing VS. Smart Pricing

I don’t pretend to know all things about AirBnb’s price tool.  I can only speak of it as to my own experiences.  What I found is the concept is great in  theory – but reality – it too is a hit-or-miss option.  IF you’re the first property to market, the tool sets your rate lower to attract travelers – some times too low.  As people book, available units nightly rates go up as inventory goes down.  So – how do you make it work?  Do you block major dates and open up later and hope you guess the timing just right to get the big dollar for a key weekend?  Do you force a rate and hope its not too high and your unit sits empty until demand picks up?  Do you drop the rate in hope to get occupancy but oops – you gave it away for a major holiday!  Sounds like a lot of work, guessing and time figuring it out to me.

Escape Properties deploys a technology that looks at current, future and historical trends and 28 total points of moving data in real time to set rates based on quality of your photos, sleep capacity, what INQUIRIES are doing vs. BOOKINGS and many other points to try to get “fair” market driven rates – good for both the traveler and the owner.

Focus on winning and not the one amazing booking!

Even if you’re not that in to sports, you will understand my point(s).  IF you’re a coach of a baseball team you will focus 75-80% of your efforts on single and double base plays, to load the bases, so when you get the one big home run you sore the most runs batted in (RBI’s).  If you’re a basket ball coach you drill your players to have a high percentage, like 90%, of shots taken within 8 feet of the basket (post position or lay ups) not all in trying to drain the 3-pointer from beyond the arc.

The same is true in Vacation Rental pricing.  You want to have ‘Fair’ pricing 90% of the time to get the most bookings (occupancy) and 10% of your bookings will be for ‘Top Dollar’ home runs.  If you’re always focused on the TOP DOLLAR rate, your occupancy rate will drop and your net revenues will tank.  Staying focused on occupancy will grow your revenue.  At the end of the year you’ll see a nice over-all balanced successful VR business.  This is a marathon, not a sprint.

Marketing & Promotion

Marketing and Promotion

Shows like NetFlix’s “STAY HERE” and other shows on HGTV are designed to entertain and like many ‘Reality’ shows often do not reflect our specific “local” realities.  Furthermore the market is in constant motion and requires sound principles and discipline over time to succeed.

Understand your market

Where are the guests coming from?  UT, CA, CO and CANADA are the top regions booking in St George.  It is important to also note that up and coming markets include Asia and colder mid-west/northeast states too.  Marketing foot print – Over 75% of guests are driving to the area and live within 400 miles of St George.  How old are they?  The average booking age of guest is 38.  87% are also families – not corporate travel.  (key – focus on marketing to families needs in your home)  How long do they stay?  In 2017, according to AirBnb data, the average length of stay in the St George area was 3.2 nights.  When do they book?  The majority of bookings are done by females (60/40) and they are booking on average 43 days in advance of the arrival date.  We are seeing a growing nightly average in the summer and people are planning more and more in the future.

In both setting up your property to appeal to the market and our focused marketing plan Escape Properties uses this and other data sources to try to drive occupancy with best possible rates to create a healthy balance of revenue.

Systems Investments- Escape Properties reservation software is designed to integrate with multiple channel marketing servies like AirBnb, VRBO, CanadaStay, Agoda and TripAdvisor etc.  This means we can cast a broad net and communicate with guests in a single point

We have integrated with partnerships on both a LOCAL and INTERNATIONAL footprint with leading travel industry firms in Israel, Spain, California, Boston Mass. and little old Utah.  All the tech, pomp and circumstance is for naught if it was not for the HUMAN team behind the effort.

This includes owners, cleaners, reservations team, guest service coordinators, maintenance team and support staff.  Our combined energies and focus is on the creation of an Amazing Guest Experience.

The Success of the Property

The operation and success of a vacation property business is not a complicated business model but there are many moving parts and details working with the traveling public, meeting expectations and keeping things current.  We see your success more as a full-time venture rather than a side job.  This is not to say that the individual can not have success self-marketing on AirBnb or VRBO.  They can and do. (This is why AirBnb is so successful as a whole)  Over time we see owners burn out and become tiered.  Properties loose their luster and eventually end up ‘for sale’ or in neglect.  Many first time second home owners are convinced that the property is always going to produce positive cash flow, when in reality most do not.  They fell in love with the idea they see on TV reality shows not the reality of running a second home business.