Experienced STR owners - is "some" money always better than "no" money?

[JD Martin]

Good morning all!

I was having a conversation with another investor a few days ago regarding short term rental occupancies and rates. In some areas right now it appears that bookings are "down", at least compared to the height of COVID, and as a result some owners in those areas are dropping their nightly/weekly rates to try to counteract it. 

So my question is this: as an owner, at what point would you rather have vacancies than low-priced bookings? The gist of the conversation went something along the lines of "Well, it's always better to have some money coming in than nothing coming in" versus "I'd rather have vacancies than give my property away in a race to the bottom and get low-paying customers who are wearing my unit out at the same time". 

As an example: let's say nightly booking rates have been averaging $200 per night where you are. How low would you be willing to go before you'd just leave the unit vacant - $150 per night? $100? $50? 

I thought it was an interesting topic because I've had this same discussion on long-term rentals (my forte), and I might be willing to go 10% below my current market rates on my LTRs if I had to in order to get them rented, but if things went bad enough that I was looking at 20-30-40% drops in rates I'd probably just cash out at that point. But STRs work on much smaller timelines so it may not be the same dynamic there.

Thoughts?