Steadily Keep your Occupancy Rate above 93% with a Rocking ADR

You have most likely come across this scenario when browsing Airbnb listings. You see a listing that has a very high nightly rate. You click on the listing thinking to yourself what are these folks doing right? You find out that although they are demanding a high daily rate, they have an occupancy rate of >50%. 

These folks might not care to have a cash-flowing property and are OK with an occasional booking, as long as the payout is really high. If they are cleaning the property themselves this may be even more of a reason they are disinterested in being fully booked as data shows that hosts have burnout when they manage the cleaning themselves. Check out Tracey Northcott's website on an excellent blog she wrote about hosting burnout.  

https://www.tracey-northcott.c...

However, if you are like most people that are trying to remain occupied as much as they can without sacrificing daily rates, here are some actionable steps you can take when employing Dynamic Pricing strategies. 

Dynamic Pricing adjusts your nightly rate based upon seasonal demand. All industries employ this pricing tool. Think airlines, hotels, etc. You should use them too!

The tool I prefer is Pricelabs. They charge a flat monthly fee of $17.49 per listing, no matter how much your gross bookings are. 

I use their recommended base rate as they periodically adjust it based on past performance. I highly advise you to check out your recommendations and adjust your base price based upon their suggestions as they base it on the performance of your listing. 

When using  this referral signup link we both get a 1 time $10 discount:

https://pricelabs.co/users/sig...

It is recommended to have a 4-night minimum as your default booking time. This will ensure you get serious vacationers and avoid the party-goers. 3 night minimums are fine as well but 4 nights is even better. This will also help out with potential abuse your home will take as each turnover has guests dragging luggage around, checking out the appliances and provided amenities.

If you have a gap between two guests that are less than your 4 nights, you can set Pricelabs to override the minimum night stay and put a 2-night minimum. This will ensure that you remain booked for 2-3 night gaps in your calendar. 

Simply go to the "edit" button near Customizations in Pricelabs and you can set this up like this:

Once you set this up you want to also make sure that although you are asking for a nightly rate your listing deserves, bear in mind if you don't get the rate you want, you will want to lower the price. Once a night goes by without heads in the bed, you lose that revenue.

Pricelabs has not yet figured out a way to create more days in the year. Once a date passes that day is gone as unbooked and it's irretrievable.

Set yourself up for booking these days by lowering the price. You should consider dropping it down by as much as 35-40% of your default asking price. 

IMPORTANT: This discount should apply in the immediate days leading up to the available day. If the available day is far out, there is no reason to lower the price when time is on your side. 

In the case below I have made this discount applied gradually within 6 days of the booking date. When you list live, you might want to be more aggressive and set this at 15 days. As you start to fill up your calendar in advance you can gradually decrease the lead time to discounted days by less than a week in advance. You can do this in Pricelabs under the General tab:

 

Notice, that I also set the Orphan day Prices at a 20% discount. Orphan days refer to Gaps between minimum bookings. Because there is not much flexibility in available dates, you are impeding your chances of getting these orphan days booked. That is why I have a 20% discount applied to these days.

Once you have set these up you will show up in search results save for searches that are looking for 1 night stays. Although you do not want to attract 1-night guests, sometimes it might be of interest to you as not all 1 nighters are looking to throw a party. It might be due to budget constraints or someone looking to do a photo sheet.  

You can go into your calendar and take a night in the month that has a 1-night gap and edit the price to 150-200% above your regular rate. This will make sure you show up in search results where potential guests might have inadvertently put in a 1-night stay although they might be looking for a longer stay. 

By combining these two strategies of decreasing the price as well as allowing less than desired minimum days, you will be setting yourself up to a high occupancy rate as well as a highly profitable listing. Your only days not booked should be 1-night availability which you have intentionally discouraged from being booked.

Let me know if you have more insights or any criticism of this strategy.