In these times of growing inflation and ever-changing demand for travel, proactively sharing key vacation rental data and analysis with my property owner partners is more important than ever. This information is meant to help get ahead of any worries or concerns which may arise and to help reassure that the property is in good hands.
I believe that sharing the right metrics and information will go a long way in engaging with and strengthening the relationship with my property owner partners. In addition to sharing revenue figures, sharing just a few more metrics and analyses can be crucial to help understand how the property is performing. I want to ensure your success which includes being able to plan for the event when we experience any drop in demand or when it is helpful to implement rental rate decreases. This allows me to help meet, manage, and exceed expectations. Thankfully, the peak seasons for 2023 are shaping up nicely already for our market.
Year-over-year (YoY) revenue is one of the most common ways to measure short-term rental performance. However, (YoY) revenue growth does not always prove that we've maximized a property's revenue potential. This is where RevPAN comes in.
Revenue per available night, or RevPAN, shows a more accurate and equal picture of revenue management performance over a given period of time. Similar to RevPAR in the hotel industry, RevPAN measures revenue earned for available nights and can give my property owner partners insight into the overall performance of the property. It can help easily demonstrate the opportunity cost of owner stays or maintenance blocks that can have a substantial impact on performance, and it is a fantastic indicator of profitability since it’s able to clearly communicate whether or not a property is effectively selling all bookable nights when compared to operational costs.
The past few years in the vacation rental world have not operated normally, so comparing year-over-year (YoY) can sometimes be misleading and doesn’t tell the full story.
Instead, comparing the performance of our properties against the market helps to provide the most accurate view and pulse check of how our listings are doing, note any discrepancies in the data, and offer you expert analysis.
Most owners consider their property as an investment, and they expect to earn a return on that investment. Often though, they think of their minimum price as the amount they need to earn to be ROI positive. However, we know that this is not always the case. I hope that by helping to educate my property owner partners by analyzing data like occupancy and ADR, we arrive at a better, more accurate minimum price for each season that will truly drive stronger ROI. An effective strategy of setting minimums is essential to get the most ROI from the property.
Similarly, I check on how often a property hits the defined minimum price over a rolling period of time for the next 90 days, as this will ensure the minimum price isn't too limiting and is always allowing the rate to fluctuate based on demand.
It's important to note, that this is primarily a concern outside of our busy spring and summer seasons, between Labor Day and March 1st. While most years we have a good September and early October, it's equally important to mention that this off-peak time accounts for half of the entire year.
With all of these unique/unpredictable trends, it's important for me to take the time to share examples of past performance that highlight great bookings, how we keep up with trends in our market, and how our combined revenue management and value proposition strategy gives us an edge over the competition. Providing a behind-the-scenes view into your strategy is a great opportunity to show off your expertise, and a chance to open up the conversation beyond just revenue.
A few examples are:
JD HallamGM - Perdido Key Resort ManagementBroker/Owner - Perdido Key Resort Realty
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