The news of the emergence of the COVID-19 Omicron variant might have come as a shock to most, and left the short-term rental industry wondering what would happen next. Classified as a “variant of concern” by the World Health Organization (WHO), the discovery of the omicron variant led some countries to quickly enact new travel restrictions.
We know how challenging this type of news is to our customers, and how difficult it can be to prepare your business for and respond to ever-changing regulations and uncertainty. At Beyond, we turn to our internal data and industry experience to help get a better picture of what is happening in the short-term rental industry right now. We are here to provide insights, advice, and support to help you navigate how best to respond to news like this now and into the future.
How Omicron is Affecting Short-Term Rentals Right Now
To get a good picture of how the new Omicron variant is affecting the short-term rental industry, we looked at cancellations per listing in South Africa, one country where the variant was found to be circulating. We also wanted to see how other parts of the world were responding, so we checked on booking pace in Europe and the U.S.
We saw the number of cancellations per listing in South Africa jump 750% on November 26th, and it has maintained a high number.
And in some Western countries, the booking pace slowed with the news. The fall was not as dramatic as seen previously.
What We’re Doing About It
Beyond’s pricing algorithm is designed to respond to shocks like this in short-term rental market supply and demand. Here’s what we’re doing to ensure that your pricing strategy is aligned with current market conditions:
COVID-19 Discount: You may notice an additional pricing factor for your listings displayed as a “COVID-19 Discount”. We have calibrated these discounts by market and will continue to update them as conditions evolve, no additional work is required for you.
Seasonal Pacing: Market shifts need to be not only expected but monitored and acted upon seamlessly. We also track “seasonal pacing” or certain times of the year that get higher or lower demand than previous years. 2021 may be a prime example, given the shifts in demand that we’ve seen.
Pricing Tools at Your Disposal
While there are many factors to consider when updating your overall revenue management strategy, adjusting your pricing strategy in response to a decrease in market demand can have an immediate impact on your business. Here are some tips and tricks you can use to help you book your rentals in our platform:
- Lower your minimum price: We will never push a price below your minimum price, so we recommend re-examining where your minimum price is currently set.
- Increase last-minute discounts: Adding last-minute discounts can help address the short-term occupancy brought about by cancellations.
- Use manual overrides: Using manual overrides to lower prices can help you gain short-term occupancy.
- Lower your base price: Lowering your base price lowers the pricing for every day over the next year. As a general rule, we discourage you from adjusting your base price too dramatically in the short term, as this may leave your listing underpriced in the future.
- Add seasonal maximums: Adding seasonal maximums will cap pricing which may help drive occupancy short term.
Strategies Beyond Just Pricing
Pricing isn’t the only lever that you can pull as a part of your overall revenue management and marketing strategy. Addressing some core concerns that people have can play a key role in putting your customers at ease, and stimulating demand for your vacation rental business.
Flexible cancellations on new bookings: To give travelers some peace of mind and to encourage them to still book your rental today, you can offer a flexible cancellation policy. Consider offering the ability to move the reservation penalty-free to a later date if they need to reschedule. Or you can apply the amount spent as a credit for future stays (similar to what airlines have introduced).
Highlighting cleaning procedures: Putting details about your cleaning procedures front and center can reassure travelers that they’ll be safe staying in your property.
Market to customers within driving distance: When air travel is threatened by new regulations or restrictions, people who still want to travel will often look to destinations within driving distance. Marketing to these customers can be a great option. Plus, if your rental is in an area close to a city, you could even highlight that your location is not as dense as big cities, making social distancing easier and safer.
Discounts for longer stays: Some travelers may be looking for longer stays; especially if they are able to work remotely. Offering a percentage discount for longer stays can broaden the customer base looking at your units and help attract more bookings.
Lowering minimum night stays: Lowering your minimum night stay restrictions will mean you show up to more travelers in search results on online booking sites. More eyeballs = more potential demand.
Discounted gift cards towards future stays: If you have a loyal repeat customer base, consider offering them discounted gift cards that can be applied to future vacations once this situation passes.
Beyond is here to help guide and support you during times like this now and into the future. For more insights, advice, best practices, and all things short-term rentals, visit our blog.