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Build Your 2019 Pricing Strategy with Confidence

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Build Your 2019 Pricing Strategy with Confidence

  1. 1. How to Use Data to Make Pricing Decisions Frank Golden Director of Sales James Solada Director of Marketing Data-Driven Pricing:
  2. 2. Who We Are? 2
  3. 3. Learning Objectives ⋅ Understanding market demand curves ⋅ Understand the pros and cons of different pricing strategies ⋅ How to improve your pricing for 2019 3
  4. 4. What is Dynamic Pricing? Changing your price based on changes in supply and demand 4
  5. 5. Some Quick Clarification ⋅ What is revenue management? ⋅ Selling to the right person at the right time for the right price ⋅ But also an include: ⋅ Dynamic pricing ⋅ Cancellation fee policies ⋅ Length of stay adjustments ⋅ Channel management ⋅ Promotions ⋅ Marketing ⋅ Today we are going to focus on the first part of revenue management: pricing 5
  6. 6. Poll What factors do you currently use to adjust prices? 6
  7. 7. What do we know about demand? 7
  8. 8. Demand Changes A Lot 8 2018 Puerto Vallarta Short-Term Rental Occupancy Rate
  9. 9. Demand Changes A Lot 9 2018 Hilton Head Short-Term Rental Occupancy Rate
  10. 10. Demand Changes A Lot 10 2018 Park City Short-Term Rental Occupancy Rate
  11. 11. Demand Changes A Lot 11 2018 Auckland Short-Term Rental Occupancy Rate
  12. 12. As Demand Changes, So Do Prices Price Rooms Booked High Season Demand Low Season Demand $200 $150 12
  13. 13. 13 Sometimes, Supply Changes, Too Price Rooms Booked 2014 Supply 2015 Supply $200 $150
  14. 14. 14 Available Airbnb Units Philadelphia Hilton Head Seasonality Christmas/ New Years Spring Break Peak Summer Labor Day Fall Weekends
  15. 15. What is Variable Pricing? 15 Charging a different price for different nights of the year
  16. 16. Poll How many price seasons do you have per year? 16
  17. 17. 17 All Managers (we hope) Do Some Degree of Variable Pricing
  18. 18. Homewood, Tahoe Manager Rate 18 Undisclosed Manager’s Homewood Nightly Rates
  19. 19. Homewood, Tahoe Occupancy 19 2017 Homewood Occupancy
  20. 20. Example Sophisticated Manager 20 Sophisticated Manager Homewood Prices
  21. 21. Side by Side 21 Sophisticated Manager Homewood Prices
  22. 22. 22 Thinking about 2019 Rates
  23. 23. Poll How many hours do you spend setting up rates for next year? 23
  24. 24. Key Principles for setting 2019 rates ⋅ The more data, the better ⋅ The more seasons, the better (within reason) ⋅ Incremental is OK ⋅ Plan Plan Plan... 24
  25. 25. What to Look For - 2019 ⋅ 2018 in review ⋅ portfolio-wide & listing-level ⋅ Seasons for 2019 ⋅ Owner Expectations ⋅ Market Trends / Competitors 25
  26. 26. Historical performance ⋅ Export Reservations to excel from your PMS ⋅ Key metrics to look at MoM via pivot tables ⋅ ADR $ ⋅ Occupancy % ⋅ Revenue by stay date & revenue by booking date 26
  27. 27. Portfolio-wide Insights 27
  28. 28. Occupancy last year 28 Panama City Beach, FL
  29. 29. Lead Time last year ⋅ Lead time ~60 days in high season - June ⋅ Holiday lead time high too 29 Panama City Beach, FL
  30. 30. Listing-level Insights 30
  31. 31. Pelican Jack’s 5 bdrm - Navarre Beach, FL 31
  32. 32. Pelican Jack’s 5 bdrm deep dive 32 Pelican Jack’s 5 Bedroom in the Panhandle 1. Look at historical performance during high & low seasons a. Highlights + lowlights b. Abnormalities 2. Impact on revenue 3. Competitive overview
  33. 33. High Season in review When you do this, you can quickly see that this unit was 100% occupied from May’18 until Aug’18 at an ADR of $932. Takeaway: increase price for summer period 33
  34. 34. Low Season in review You can also see that shoulder season (Oct-Dec) occupancy was stronger in 2018 than 2017. Takeaway: lowering rates during Nov & Dec lead to increased occupancy... 34 $400 28% a 24% rate decrease YoYa 67% increase in occupancy YoY
  35. 35. 35 $3,493 … and increased revenue! This property made $4,800 Dec’18 vs. $3,493 Dec ‘17 a 37% increase in revenue YoY in one month Revenue impact
  36. 36. Competition Push rates higher in the summertime where it sells out Bring rates a bit lower in the low season to drive more occupancy 36 Lower in low season Push higher in high season Don’t miss events!
  37. 37. Planning 37 Once you have these actionable insights, we now need to put a implementation plan in place ⋅ Project owner ⋅ Time needed to input seasons & rates for (x hours) ⋅ Do owners need to review? ⋅ Will this change anything on distribution? ⋅ Go-live date ⋅ Review after 2 weeks once you have booking data and compare booking pace YoY
  38. 38. Key Takeaways 38 ⋅ 2018 in review - look at the account & listing level ⋅ ADR $ ⋅ Occupancy % ⋅ Revenue by stay date & revenue by booking date ⋅ How to stay competitive ⋅ Push rates higher when demand is high ⋅ Bring rates a bit lower in the low season to drive more occupancy ⋅ Put an implementation plan in place
  39. 39. Things we didn’t cover today ⋅ Last minute discounting strategies ⋅ Gap filling ⋅ Minimum night stay rules ⋅ Specials ⋅ Wholesale ⋅ Distribution 39
  40. 40. Connecting your PMS will unlock... listing-level performance dashboards portfolio-wide performance dashboards free market data & comp shopping tool 40 Not an excel junkie? we may be able to help
  41. 41. Let’s get in touch! Contact: frank@beyondpricing.com www.beyondpricing.com Twitter: @beyondpricing 41

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