Data offers managers of vacation rental properties competitive information about their listings and markets and the chance to increase income from their inventory. We can make wise judgments about pricing, distribution, operations, strategy, and investment to optimize growth by collecting and evaluating the appropriate data.
How to use data and where to find it
Even though it is simple to access and can provide a wealth of information about factors that may have an impact on your business, it is essential to look at market data, which is based on a sample that is much larger than your clientele base and can help you track bigger, more unpredictably changing market trends.
Maintaining knowledge of supply and demand changes and proactively detecting problems are essential since patterns are unlikely to stay constant from season to season. Fortunately, gathering market information may be as easy as browsing different OTAs, rival websites, and a data source like Transparent’s dashboard, which compiles and modifies global data for the future.
Simple enough? Thus, what does it provide you? Proper market and business analysis has significant practical repercussions and may help you make the necessary changes and advancements for your firm’s success.
Ways Data Can Help You Expand Your Company
1. Improve Occupancy
Property managers should maintain tabs on the traveler community and keep an eye on the actions of other hosts (also known as the supply) by analyzing occupancy patterns (the demand).
When reservations increase around the exact dates yearly, it’s a positive sign that you should raise your pricing during those times. Still, when bookings slump annually, you should respond with lower rates to promote occupancy.
You may understand the demand of your market at any particular moment by looking at events and evaluating occupancy rates (see the graph below) or the pick-up (see the graph above).
The occupancy for a PM in New York is shown here, together with the occupancy for the market.
It is impossible to divide revenue maximization into average daily and occupancy rates. A harmony between the two is necessary for proper profit optimization. It necessitates comparing your ADR and occupancy rates with those of the competition.
A high relative occupancy indicates effective management if your ADR is close to the market average. Higher occupancy rates than the industry standard are likewise fantastic, but only if your ADRs align with the industry. The PM should assess if raising rates maximized revenue if, as in this case, the ADR is regularly lower than your competitive set (see the graph below).
You may also increase occupancy and income by lowering your minimum night restrictions to promote more reservations or longer stays. Here, understanding the minimum stay parameters of the market might be useful:
1. Maximizing Rates
Property managers can balance pricing their homes competitively with maximum profit, thanks to data. You can ensure that your rates are optimal and in line with market pricing and occupancy trends by keeping an eye on the market and your competitors.
You can make proactive rate changes to guarantee that you aren’t missing out on income or pricing yourself out of occupancy if you have information on how your pricing compares to the market and your competitive set. Property managers should maintain tabs on other hosts’ actions and keep an eye on occupancy patterns to have a pulse on the traveler community. If occupancy peaks coincide with the same dates each year, it’s a solid sign that you should raise your rates at those times.
3. Inventory Development and Distribution
Many managers of vacation rentals will accept as much inventory as is given and distribute it randomly. Given that it brings in money, this is not unreasonable. However, certain stock kinds and distribution should be prioritized for people subject to onboarding restrictions or who must purchase or lease their portfolio.
Information on pricing, occupancy, and availability may help determine the most valuable sort of property in a certain market. They can inform you what kinds of properties are most often rented out or provide the best rate of return.
The graph below demonstrates how more lucrative bigger houses are in Madrid, whereas the return on a one-bedroom property is quite modest (0-bedroom studios are priced higher than one-bedrooms). Additionally, there is not much of a difference between a studio and a two-bedroom home.
For example, the supply of bedrooms per channel may be mapped out to assist you in deciding on your stock selection and distribution plan and avoid overstock, which can lead to unfavorable competition, especially during the off-season.
Here, we can observe how the supply in Lisbon varies depending on the number of bedrooms and the platform.
Data may also be used to determine which areas or features are most popular. All of these may aid in strategically distributing and promoting your listing as well as picking the most lucrative stock. These types of data may aid you in enhancing your original price plan, giving your listing a competitive edge, in addition to inventory and channel combinations.
4. Creating Knowledgeable Strategies
It’s critical to know how you’re doing and base your predictions and goals on projections. You may pinpoint areas for improvement for present and future initiatives by monitoring specific KPIs. These estimates may influence your budget and strategy, enabling you to make informed choices that will advance your company.
5. Getting Investment and Support from Stakeholders
You will be successful if you use essential metrics to develop company strategy, but working with data has other advantages.
Stakeholders look for information to support company choices, and prospective investors base their investment decisions on performance and growth metrics.
Data is the cornerstone of these initiatives; it shows expertise and a thorough grasp of your company and plan and provides examples of your methods and triumphs. Key metrics will take care of you if you keep track of them and manage them
An Engine for Growth
Property managers would be forced to make judgments without data based on guesses and unreliable, irrelevant information. Property managers may optimize income by matching plans with reality thanks to data’s vital insights about their performance and those of their competitors and the market as a whole. It enables you to proactively change your approach to take advantage of shifting market circumstances.
It strengthens revenue management and also gives information to current and potential stakeholders by informing your larger company objectives. Data accelerate success and expansion.
Who the author is
The leader in business intelligence for the short-term rental sector is Transparent. They provide insights into market circumstances, such as supply, growth, demand trends, price movements, and property management operations using a mix of proprietary data aggregation and data science. With the help of this data-driven tool, hosts and property managers can make more informed choices in the short-term rental market.