This week, Beyond attended the VRM Intel Data & Revenue Management Conference in Nashville, TN. The fourth annual conference brought together vacation rental experts to discuss the important emerging topic of revenue management in the short-term rental industry.
This year focused on five areas of education:
- Technology and Data (performance, demand, comparative, competitive, property, guest, and people data)
- Foundational Revenue Management
- Advanced Revenue Management
- Distribution and Marketing
- Executive Strategy, Real Estate, and Investing
With industry-leading keynotes, more than 40 educational sessions, and the fan-favorite DARM Battleground, there was a lot to cover. Below, we’ve compiled our top takeaways from an exciting conference:
#1: Recession Impacts
Data is naturally always a focal point at DARM each year, and this year in Nashville was no different. Many different data providers in the short-term rental industry shared their latest insights on the industry, including 2022 performance numbers and 2023 forecasts. One recurring topic that came up was centered around the idea of recession in the larger economy, as well as the question of whether the short-term rental industry is in a recession itself.
Overall, everyone can agree that occupancy levels are pacing behind 2020 and 2021 depending on the market. Average daily rates (ADRs) are still performing at high levels compared to these past few years, which is helping keep year-over-year revenue per available night (RevPAN) performance positive.
Key takeaway ➡️ Keep an eye on these higher-level metrics to understand where the broader economy may be heading and adjust your revenue management strategies accordingly.
#2: Pace, Pickup, & Forecast
A major topic at DARM each year centers around the idea of the revenue management process, or what it takes to regularly keep up with a revenue management strategy for a vacation rental property. There are three big indicators that revenue managers can use to track performance and make proactive strategy changes that came up often at this year’s conference.
- Pace data helps revenue managers understand where any key metric (occupancy, ADR, revenue) is compared to the same time as previous years. If you know that you are “pacing” behind last year, this may be an indicator that something in your strategy needs to change before it’s too late.
- Second, every regular revenue management review should be centered around pickup. If you review your strategy weekly, pickup data means looking at the specific bookings that were made at your properties since that last review. Using pickup data can help show the impact of the changes that you made, or where there may be further changes needed.
- Finally, forecast data is a great way to stay in touch with high-level goals. Forecasting how much revenue can be made for a specific property or portfolio during a week, month, quarter, or year can help revenue managers stay focused on these targets.
Key takeaway ➡️ Utilize each of these indicators to proactively see where your revenue management strategy can have the most impact.
#3: Direct Booking Strategies
An evergreen topic in the industry over the past few years has definitely been that of direct bookings for vacation rental properties. Most revenue managers are aware of how expensive bookings from online travel agencies (OTAs) can be, both in distribution cost and also operations. Building and maintaining a direct booking channel and strategy is no easy task, but it’s clear that it pays off in the long run for property managers.
There were a few sessions that highlighted best practices for direct email marketing strategies to help drive more direct bookings.
Key takeaway ➡️ When it comes to revenue management, this level of marketing is crucial to any well-rounded strategy.
#4: Comp Sets Are Here
With more and more data available in the industry, many software vendors in the industry debuted new competitive set tools during the shark tank-style Battleground at DARM. Competitive set tools are meant to help property managers get an understanding of how specific competitors are performing in their market.
Key takeaway ➡️ Beyond introduced comp sets via the recently overhauled Nearby Listings tab, where users can now build and manage comp sets directly in the pricing tool.
#5: New Investment & Supply Growth
The recent rise in vacation rental popularity has also given way to an increase of investments in the industry, as investors look to acquire properties for the sole purpose of operating them as vacation rentals. Since new supply like this can severely impact any market, it’s important to keep track of how inventory is growing across the globe. AirDNA shared with attendees that they forecast listing supply to grow by just over 8% in 2023, which can have a direct impact on occupancy levels throughout the year. Depending on the market, it is clear that understanding how supply is changing will be pertinent to revenue management strategies moving forward.
Key takeaway ➡️ More supply in your market may lead to decreases in ADR or occupancy, so be prepared to act accordingly over the next year.
It was a great few days in Nashville discussing revenue management and data in the short-term rental industry. For more information on how you can watch a recording of each session, check out the online video package available from VRM Intel here. Thank you to the VRM Intel team for putting on this great event!
Are you looking for more information about revenue management in the vacation rental industry? Let’s talk!