Occupancy based pricing with market occupancy component?

[Timothy Church]

One of the fun parts about managing Airbnbs has been finding ways to optimize things and increase profits. I've always used a dynamic pricing tool in order to control how the property is priced on a given day. Normally I'd go in once or twice a week and adjust my prices with a target range of 40-60% occupied over the next 30 days. With the average lead time for bookings fluctuating between 30-60 days, keeping in this range kept everything about 75-85% booked. 

While the properties have performed great, I'm now training an employee and am finally having to answer the questions of why I adjust some and not others and how much to adjust. I know there are a tremendous number of factors such as seasonality, pickup, quality of the listing, etc. but I'm currently working on going through things to put pen to paper to write out why.

All that said, Pricelabs (the tool I currently use) has recently added a feature to their dashboard. While they always display your occupancy percentage for the next 10, 30, & 60 days, it now shows the market occupancy rate when you hover over it and colors the number based on your relationship to it. RED < 80% Market, Yellow >80% & <Market, Green > Market & < 120% Market, and Dark Green > 120% of market.

This new edition has got me thinking a lot about my target occupancy. On properties that are newer to market or have lower occupancy, it is great to see this correlation but for properties where they are currently 60% booked and the market is at 29% I don't know if I'm missing out on income. Depending on if weekends are booked for 2 or 3 night stays, they account for 26-40% of the monthly occupancy.

Do you think keeping the 40% as my lower threshold is a good strategy or should I change it to something that correlates closer to the market?

Should 60% still be that upper threshold or should it be say related to the market average as well?

Thanks in advance for your thoughts!