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March 25, 2021
This is the first in a three-part series on finding INSIGHTS into your performance, centered around the idea of “pacing.” We intend to cover how to analyze historical year-over-year pacing at the portfolio level, then the listing level, and finally, against the market comp set.
Whether this question comes from the boardroom, an owner on the phone, or around the kitchen table, it’s a simple but powerful gauge of where things stand. And it’s probably the number one question that’s always top of mind for short-term rental property managers and owners.We’ve recently noted the challenges of answering this question, but finding an answer to it, however, is nonetheless imperative.
While reviewing historical data to inform your strategic decisions is a key aspect of short-term rental management, using pace data allows property managers to be proactive with their revenue management strategy and make smart decisions while there is still time to optimize revenue.
Looking at year-over-year performance for the whole portfolio is nothing new, but even veterans need a good refresher now and again. With the pace of change we are undergoing a weekly review is no longer enough. We recommend using the tools and dashboard in your PMS, business intelligence tool, or Beyond Pricing’s free Insights tool multiple times a week.The goal of Insights and other analytical tools is to show you key information about your short term rental portfolio performance, specifically:
With a few clicks, you should be able to drill down on groups of listings, compare performance to the market, and surface best and worst performing properties. From here, you should be able to take away actionable insights to make changes to your pricing and overall revenue management strategy.
While it’s important to review all aspects of your portfolio, there are a few that should always be at the top of the list, with occupancy pacing being one of them. Looking at this coming year of occupancy, for example, and comparing it with occupancy for the same time last year, as well as final last year, gives the clearest story.
In the example above, we can see where we are nearly as full as last late-May/early-June ended up, but then in August they are pacing behind last year for the same time.
The other side of this coin is ADR, so being able to see how ADRs correspond at the same time, again with the same fields, can spot not only any problems but also what to do about it.
Now incorporating the ADR chart above, we can see that the period of late-May/early-June, while booked up almost to last year, is actually still getting rates much higher than last year. In fact, we can see we are successfully getting higher rates all summer, with the exception of August, where we knew we were pacing behind.Looking at the cumulative occupancy and ADRs is useful, but given your booking lead time, that could be from reservations made months—or years—ago.
We always suggest looking at the added occupancy and ADR for more recent bookings. This can show in real-time when you are putting heads in beds. In the chart below, when we just look at the bookings made in the last two weeks, the majority have been for May-June, while almost none have come in for that problem period in August.
It appears that there is just no demand for August at this point, even when our ADRs are lower than the weeks around it. While this is all great to know, this is only the first step in an encompassing analysis. We suggest repeating the above by the different markets you may be in, by bedroom size, or any custom listing grouping that you may use to distinguish similar listing types to better focus on certain areas.
Now that we can proactively identify potential problems in pacing, next week we will take a deeper look into the next steps and listing identification & resolution. We will also take a look to see how the market is faring for this same period.
Come see how Insights can work for you.
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