As the summer season heats up, there's no better time to capitalize on the revenue-boosting potential of July 4th. This holiday is a golden opportunity to increase revenue while also providing an unforgettable experience for your guests. However, to avoid lackluster performance, balancing profitability with guest satisfaction requires a strategic and flexible approach, particularly in light of high owner expectations on achievable rates and fierce competition.
Looking at RevPAN Pacing in US Coastal Markets
When examining RevPAN pacing in US coastal vacation markets compared to the past two years, it's evident that demand is stagnating due to excess supply. As a result, pacing from now until peak summer is declining. Although the Friday and Saturday before July 4th are performing quite well, the surrounding weekdays are breaking this trend and are quite disappointing. This is caused by over pricing of the entire “July 4th period”, not just the days that people want to travel.
Florida Panhandle Booking Trends
Tracing the booking curves over the past 10 months for both Occupancy and ADR for the 4th of July in the Florida Panhandle, it’s clear that ADRs in 2023 have been consistently higher than 2022 rates, while occupancy has lagged behind considerably. It has not been until recently in April that ADRs have started to fall (still remaining above 2022 rates), however the occupancy gap has not closed significantly.
In addition to overpricing, property managers are implementing longer minimum stay rules which may deter some guests. For instance, in the Panhandle the percentage of minimum length of stay rules on Vrbo that are 5 days or more goes from 34% the week before July 4th to above 49% during the weekend. For better insight in the length of stays being searched on your properties look at Insights Pro for visualizations and analysis.
Finding the Sweet Spot with Beyond's Algorithms
It’s important not to over-price, but also crucial to know when and by how much to lower the price to get the biggest impact on revenue. Here at Beyond we understand the need to find the sweet spot between pricing and revenue. Our advanced algorithms take into account year over year changes in performance ensuring that you are discounting only where necessary.
The chart above shows the Florida Panhandle occupancy pacing this year vs. last year, as well as Beyond’s Seasonality factor in pink. While the market is pacing behind for almost all dates in the future, some dates are more affected than others. For example, dates in mid-May are quite behind and therefore rates are being decreased by almost -15%. Other days, including the weekend days of July 4th, are flat year over year and seeing little change. The days surrounding this period (that we identified as currently overpriced) are being lowered.
Crafting the Perfect Pricing for the Fourth
While our algorithms are doing everything they can to get pricing where it should be for 4th of July, there’s still more to be done.
Now is the time to speak to owners and let them know what’s going on in your market so that adjustments can be made sooner rather than later. The last thing an owner wants is to slash rates too late or, even worse, sit empty over a peak holiday like 4th of July. So, what are some key things to think about?
- Are rates too high? Check to see what booked ADRs for similar bedroom sizes in the past 2-4 weeks look like and how you compare. Review any high Seasonal Minimum Prices that may be in the way of securing a booking. Review Base Price change history to see when was the last time it was changed - if your Base Price went up, up, up over the past two years, it’s likely time to start bringing that back down.
- Are minimum length of stay requirements competitive? Check market minimum stay averages for similar sized properties. Consider adjusting any high Seasonal Minimum Stay settings if they are hurting your competitiveness.
- Check your Channel markups - if you receive a significant amount of bookings from channels such as Vrbo and Airbnb, ensure you aren’t out-pricing yourself with any extra markups that could hurt your competitiveness when there is so much excess supply in the market.
- Consider all avenues of value provided to the guest and how your listing stacks up. If there is a lot of open inventory with more added value or amenities than your listing, is your current pricing justified?
Knowing what to charge can be a bit of an art and in some situations it requires a little more than algorithm factors. That's why leveraging the perfect blend of data, tactics, and a sprinkle of the right settings is crucial. Let's stir it all together and serve a nightly pricing strategy that leaves guests and owners delighted! Learn how Beyond’s Search Data can help.
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