• News
    • VRM Intel News
    • Latest News
    • Sponsor News
  • COVID-19
  • Marketing
  • Tech
  • OTAs
  • Customer Service
  • Regs
  • Housekeeping
  • More
    • Education
      • Calendar of Events
      • Videos & Whitepapers
    • VRM Intel Live!
    • Reports Login
    • VRM Intel Magazine
    • Subscribe
    • Advertise
    • Authors
    • About Us
    • Contact Us
VRM Intel
  • News
    • Meredith Oskenholt-Meredith Lodging-Bend Oregon
      The Enduring Principles That Have Guided Meredith Lodging through the Global Pandemic, Raging Forest Fires and Personal Family Challenges
    • VRM Intel_Christmas-in-New-Orleans
      That’s the Ticket! Register Now to Enjoy Big Savings and Convenient Payment Plans for the 2021 Vacation Rental Women’s Summit in New Orleans
    • Inhabit IQ Gets “Significant Investment” from Goldman Sachs Merchant Banking Division
    • Airbnb Goes Public. CEO Brian Chesky: “Travel is never going to look like it did in January”
    • Short-Term Rental Industry Giants Grapple with Building Brand Loyalty, Democratization, Regulations, and More at Skift’s 2020 STR Summit
    • VRM Intel News
    • Latest News
    • Sponsor News
  • COVID-19
    • Meredith Oskenholt-Meredith Lodging-Bend Oregon
      The Enduring Principles That Have Guided Meredith Lodging through the Global Pandemic, Raging Forest Fires and Personal Family Challenges
    • Airbnb Goes Public. CEO Brian Chesky: “Travel is never going to look like it did in January”
    • Short-Term Rental Industry Giants Grapple with Building Brand Loyalty, Democratization, Regulations, and More at Skift’s 2020 STR Summit
    • All Star and SoCal Vacation Homes
      The Bright Spot in 2020 Travel: U.S. Vacation Rentals See Higher ADRs, Revenue, and Adj. Pd. Occupancy
    • 6 Takeaways from Vrbo’s 2021 Consumer Travel Trend Report
  • Marketing
    • Learn How You Can Unleash Your ‘Limitless Female Energy’ During VRM’s Thought Leadership Series Featuring Author/Speaker Amber Hurdle
    • How to Use Website Traffic to Gauge Demand for Your Market
    • Elements of a Property Detail Page: How They Can Make or Break Your Bookings
    • VRMIntel_Fall2020_Fast Paced Revenue Management
      Fast-Paced Revenue Management: The 10-Minute, $10,000 Mistake
    • 6 Takeaways from Vrbo’s 2021 Consumer Travel Trend Report
  • Tech
    • Inhabit IQ Gets “Significant Investment” from Goldman Sachs Merchant Banking Division
    • 2021 Social Media Game Changer
      Are You Ready to Ride the Wave to Becoming a 2021 Social Media Game Changer?
    • NDAs & Confidentiality Agreements: What to Include and When to Enforce
    • Selling Your Business? Know Your Tech Stuff!
    • Dynamic Pricing: To Adjust Rates or Not to Adjust Rates
  • OTAs
    • Airbnb Goes Public. CEO Brian Chesky: “Travel is never going to look like it did in January”
    • 6 Takeaways from Vrbo’s 2021 Consumer Travel Trend Report
    • Barron’s: Airbnb Set to Price December 9 and Trade December 10
    • Booking.com Affirms Commitment to Quality with Minimum Cleanliness Score Requirement
    • Airbnb is Finally Going Public: Takeaways for Property Managers from IPO Filing
  • Customer Service
    • Meredith Oskenholt-Meredith Lodging-Bend Oregon
      The Enduring Principles That Have Guided Meredith Lodging through the Global Pandemic, Raging Forest Fires and Personal Family Challenges
    • Dynamic Pricing: To Adjust Rates or Not to Adjust Rates
    • Repurposing Space: Broadening Your Vacation Rental’s Appeal
    • Booking.com Affirms Commitment to Quality with Minimum Cleanliness Score Requirement
    • New Customers Bring New Demands: Evolving to Meet the Needs of New Customer Avatars
  • Regs
    • Barron’s: Airbnb Set to Price December 9 and Trade December 10
    • Strategic Forecasting Beyond 2021: Are Vacation Rental Managers Changing Fast Enough?
    • Alabama’s tourism economy benefits from Florida Governor DeSantis’ shutdown of vacation rentals
    • Airbnb reaches out to city officials to influence “transitional travel reopening plans”
    • Jeff Paglialonga on FL Vacation Rental COVID-related ban: “We need your support to rectify what I believe is to be the illegal taking of property from Florida vacation rental owners.”
  • Housekeeping
    • Booking.com Affirms Commitment to Quality with Minimum Cleanliness Score Requirement
    • Q&A with Breezeway founder Jeremy Gall about company’s $8 million funding round and more
    • Gatlinburg-based Cabins For YOU acquires Chalet Village and is looking for more. Q&A with owner and founder Greg Plimpton
    • What is the cost of Airbnb’s recommended 24- to 72-hour “buffer” time between stays?
    • The Professional Vacation Rental Manager’s Crisis Playbook
  • More
    • Education
      • Calendar of Events
      • Videos & Whitepapers
    • VRM Intel Live!
    • Reports Login
    • VRM Intel Magazine
    • Subscribe
    • Advertise
    • Authors
    • About Us
    • Contact Us
  • RSS

Technology and Marketing

9 Key Revenue Management Basics

9 Key Revenue Management Basics
mm
Lee Knauer and Dwight Yang, Richer Logic
November 5, 2020

The economic landscape for short-term and vacation rentals is swiftly changing, bringing new challenges each day. The industry experienced a screeching halt in demand caused by the global pandemic and in many leisure markets, a summer with a blossoming revitalization of demand.

It’s easy to get off course with moving targets, unpredictable scenarios, and multiple versions of your unit or portfolio’s 2020 budget. Getting back to basics with revenue management fundamentals and reframing all of the levers available during periods of quickly shifting demand will help you regain your stride and plan for a solid close to the year.

 

1) Use Historical Performance

Review and analyze occupancy and rate performance for your portfolio by season, event, and day of week periods. Compare and benchmark against your historical trends and relevant market performance data. Determine if there is an opportunity to increase revenue for future periods by driving occupancy, rate, or both.

 

2) Analyze Current Booking Activity

Significant changes in booking pace can be caused by overall supply/demand volatility, a shifting booking window, the shrinking/extending of traditional seasonal periods, or some combination of these. Analyze your pace and that of the market to determine if your pricing and availability are deployed optimally to address changing conditions.

 

3) Determine Supply Changes

Establish a process to periodically review changes in the amount and quality of supply in your market. Analyze relevant changes in competing destinations that may affect your local market and adjust strategies accordingly.

 

4) Leverage Your Systems

It may sound obvious, but if you’ve invested in technology to optimize performance, utilize those systems. Leverage the capabilities in your chosen property management system (PMS) and/or revenue management system (RMS) by spending time to configure your settings and enable automation properly, event triggers, alerts, and data that drive AI pricing/forecasting engines. Strike a balance between providing inputs that your system can’t learn on its own, against constantly overriding recommendations, which run counter to having the system in the first place. Strive to become a superuser as you will find that the most successful revenue managers in any organization are usually also the top system experts.

 

5) Review and Update System Settings

Configuration settings and automation in your PMS and/or RMS should align with your strategies and tactics, which will drive performance. However, don’t fall into the trap of “set it and forget it.” Establish a process to frequently review comp set definitions, stay restrictions, pricing rules, policies, discounts, and promotions to ensure that they correctly apply to high and low demand periods.

 

6) Understand Your Pricing Power

Analyze each home’s baseline pricing as it relates to location, bedrooms, amenities, ratings, and overall quality for your market. Conduct a price/value exercise versus your competitive set to guide your ideal positioning. Define and apply varying premiums for your unit attributes during high and low demand periods.

 

7) Manage High Demand Periods

Ensure your pricing and stay restrictions will protect your peak nights and drive production to your shoulder and gap nights. Compression caused by special events, holidays, and local demand drivers are opportunities to maximize the rate as market availability decreases. Hold rates appropriate for the surge in demand, and position your units to sell later rather than earlier compared to your competitive set. Remove any length of stay or affiliate pricing rules that apply discounts, and peel back from less profitable channels.

 

8) Manage Low Demand Periods

Market your units attractively by having compelling rate value, reduced stay restrictions, and the most lenient cancellation and deposit policies your business model can support. Enable discounting by activating promotions from third-party channels that will turn on tagging, utilize slash through pricing, and help promote a higher sort ranking. Configure discount pricing rules that encourage both early bookings and last-minute deals. Provide availability on as many channels as possible while maintaining a profitable rate structure.

 

9) Forecast

To quickly and clearly understand when strategies should be adjusted, consistently reforecast using current data. Relevant levers that affect pricing, availability, promotions, marketing, and distribution should be on standby and ready to activate should thresholds in your forecasts be triggered. Whatever tool you have for forecasting should be easy to adjust and read, especially when sharing with other stakeholders within strategy and performance discussions. Invest time and effort in establishing forecast tools that work for you and not the other way around.

There will always be market leaders and laggards. To seize the opportunity of maximizing rates while capturing your fair share of occupancy for your unit or portfolio, be nimble and invest the time to review your positioning.

The fundamentals are simple, yet it is easy to be led astray in times of uncertainty. We have an opportunity to lift the industry—if we collectively invest in analyzing the data and adapt our strategies to align with these times of massive change.

Related ItemsCOVID-19dataFeaturedmarketingoccupancy ratesproperty management softwareRevenue Managementshort-term rentalstechnologyvacation rental marketing
Click to add a comment

Leave a Reply

Cancel reply

Your email address will not be published. Required fields are marked *

Technology and Marketing
November 5, 2020
mm
Lee Knauer and Dwight Yang, Richer Logic

Lee Knauer has directly managed pricing strategy and supported the analytics and system management for multiple lodging types and locations. She is currently head of project management and strategy for Richer Logic. She oversaw system migrations in her most recent role, specifically focused on revenue management, property management, and data system/BI integration projects for a global lodging company. Lee is HSMAI certified in both revenue management and digital marketing, holding her CRME and CHDM. Lee has a business degree from the University of Wisconsin-Milwaukee and a Cornell Product Management Certification.

Related ItemsCOVID-19dataFeaturedmarketingoccupancy ratesproperty management softwareRevenue Managementshort-term rentalstechnologyvacation rental marketing

More in Technology and Marketing

VRMIntel_Fall2020_Fast Paced Revenue Management

Fast-Paced Revenue Management: The 10-Minute, $10,000 Mistake

Heather RicherDecember 9, 2020
Read More

Managing Profit, Not Just Revenue

Andrew McConnellDecember 4, 2020
Read More

Secure More Direct Bookings through Personalized Sales and Marketing

Doug KennedyDecember 3, 2020
Read More

NDAs & Confidentiality Agreements: What to Include and When to Enforce

Kristen PrinzDecember 2, 2020
Read More

The Google Trifecta: Three Ways to Leverage the World’s Most Popular Search Engine

Jennifer PerezDecember 1, 2020
Read More

You Are Your Best Revenue Manager

Ryan SaylorNovember 30, 2020
Read More
Scroll for more
Tap

Sponsor News

  • Inhabit IQ Gets “Significant Investment” from Goldman Sachs Merchant Banking Division
    Latest NewsDecember 18, 2020
  • You Are Your Best Revenue Manager
    Revenue ManagementNovember 30, 2020
  • How Email Helped Save Vacation Rental Companies During the COVID-19 Pandemic
    AdvertisementNovember 21, 2020
  • Booking.com Affirms Commitment to Quality with Minimum Cleanliness Score Requirement
    Customer Service for Vacation Rental ProfessionalsNovember 18, 2020
VRM Intel
Calendar of Events
Videos & Whitepapers
VRMintel Magazine
Subscribe
Advertise
About Us
Authors
Contact Us

Recent News

  • Meredith Oskenholt-Meredith Lodging-Bend Oregon
    The Enduring Principles That Have Guided Meredith Lodging through the Global Pandemic, Raging Forest Fires and Personal Family Challenges
    BlogJanuary 12, 2021
  • VRM Intel_Christmas-in-New-Orleans
    That’s the Ticket! Register Now to Enjoy Big Savings and Convenient Payment Plans for the 2021 Vacation Rental Women’s Summit in New Orleans
    Industry News for Vacation Rental ManagersJanuary 8, 2021
  • VRM Intel_Look Back List from 2020
    VRM Intel Brings You A Top 10 Look Back List of 2020 Stories
    BlogJanuary 1, 2021
  • Inhabit IQ Gets “Significant Investment” from Goldman Sachs Merchant Banking Division
    Latest NewsDecember 18, 2020

View Current Issue

VRMintel Copyright © 2016-17 | Click HERE to Subscribe | Privacy Policy | Disclaimer | Copyright | Jobs | Facebook | Twitter | LinkedIn

Forecasting the Winter Season: Forces at Play in a Pandemic Economy
Fernie Direct & StayFi
We use cookies and similar technologies to recognize repeat visits, as well as to measure the effectiveness of campaigns and analyze traffic. By clicking "I Accept" you consent to the use of cookies unless you have disabled them.Accept