Have you ever had a great booking but then struggle to get the days around it to book? You’re not alone. It's not a gap, but it is definitely hard to fill those nights. At Beyond, we noticed this was an issue that could cause a dip in occupancy and overall RevPAN, so we dug in to see what we could do.
Essentially, you get a great 4-day long weekend stay from Saturday to Wednesday, but now your Friday night is in jeopardy. Will it come up in fewer searches now that you can’t sell the whole weekend? Does overall demand fall for it? Should the price be lower because of this? We think yes to all three, and have built an automatic solution into our dynamic pricing algorithm, called Availability Yielding.
Better Data Leads to Better Revenue
Our Revenue Management team gained a better understanding of demand patterns based on the availability of the days around another reservation. Then, we then found a way to incorporate this into our algorithm to discount the days appropriately to increase the occupancy of hard-to-sell days and revenue. In our example from above, for a listing in a day-of-week-heavy market (i.e. Nashville) that has Saturday already booked, did this affect Friday’s demand and its nightly price?
Ultimately, we determined that the availability of the days around a day had a significant impact on the probability of getting booked and should be incorporated into our pricing solution. The Beyond Data Science team created an automatic pricing adjustment that will be triggered based on the availability of surrounding days for that listing. Availability Yielding is now automatically added as a discount to your rate to help you increase your occupancy on a date that will likely go unbooked.
👉 What does this mean for your bottom line? Through extensive testing, we found that incorporating Availability Yielding into our pricing algorithm has given our users a 2% increase in RevPAN. So if your business is making $2 million a year in RevPAN, this means you'll get an additional $40,000 in revenue without any extra effort. Not too bad, right?
Users will be able to see the line item for Availability Yielding in the Calendar breakdown, as seen in the image above.
How Will it Impact my Listings?
If you’re a Beyond user, Availability Yielding will apply to all available days with bookings 1-2 days before or after it. Here is a list of 4 possible variations used along with their corresponding code.
- One day before is booked
- One day after is booked
- Two days before is booked
- Two days after is booked
Depending on what variation applies, a discount percentage will be applied, up to -30% off, unless it hits the listing annual or seasonal minimums. This is done automatically so you don't have to worry about catching these harder-to-book days yourself, nor do you have to worry about finding the right amount of discounting in order to drive more demand for that night. Discounts are automatically computed based on the time of year and day of the week, as well as how far away the day is from today, meaning we discount less if the day is next week versus in 9 months.
Beyond’s pricing algorithm calculates seasonality, event, and day-of-week factors that are then applied to the listing’s base price. While overall demand for each day is vital to getting the price right, demand for each day is also influenced by the availability of the days around it. This new addition to our algorithm allows us to further optimize our pricing by discounting based on the probability of getting booked for each available date combination to make the most of available occupancy demand.
Beyond’s Revenue Management team is constantly reviewing and analyzing the raw data we have from more than 340,000 global listings, to identify patterns and come up with new ways to improve our pricing algorithm. We know these adjustments to our algorithm are consistently helping our users make more revenue and grow their businesses.