[00:00:00] Speaker A: Hey, y'. All.
[00:00:01] Speaker B: Welcome back to another episode of the short term shop Poconos series. Really excited for this episode. Today we're going to talk about revenue management. So that's your calendars, pricing, seasonality, minimum stay, minimum night stay, things like that. So to do that, we have two people with us, one who you're very familiar with. Tristan Hunt. Tristan, you want to reintroduce yourself if somebody's just jumping in midstream on this.
[00:00:29] Speaker A: Yeah, yeah. My name's Tristan. I am the short term rental specific real estate agent for the short term shop for the Poconos. So anything regarding the Poconos or you want to learn more you're interested in buying, I'm the person to reach out to.
[00:00:42] Speaker B: All right. And you can find him on our website.
You can email us agents at the Short Term shop dot com. We're on all social media at the short term shop. So any of those places we can get you connected with Tristan.
And then next we have Joe Jakes with Paradise Vacations. Joe, do you want to introduce yourself a little bit?
[00:01:02] Speaker C: Sure. My name is Joe Jakes. My wife Amy and I have. We started with short term rentals in 2020 and just have. Have tried to find places that our family likes to go and enjoy. And that's kind of what we try to cater to, is people that are like us. And so we've got properties across the country, and our newest one is in the Poconos, and we bought it about a year. A year and a half ago.
[00:01:33] Speaker B: All right, so today we're going to talk about what seasonality looks like. So do you want to talk a little bit about the high season and the low season in the Poconos and even shoulder season? So I know in some of the markets that I'm in, there's a definite low season, then there's a high season. And, like, May is kind of slow but not off.
So. Yeah, just tell me a little about the seasonality.
[00:02:00] Speaker C: Well, we are. Our particular house there is. Is large, and so it caters large groups. We sleep 22. And so it could be different in smaller properties. I could see some differences that way for. For a single family versus you know, a group of.
Of people coming together.
But we.
Obviously, the summertime is busy. Like many other markets, we got live just before last summer, and we're already about 80% booked for next summer as well already.
And so the lead time we're seeing that is, you know, plenty. Plenty of days ahead of time there.
And then highly in the fall, we were still getting weekday bookings and, and some longer stays, more than just, you know, weekends. But we through the winter here we're seeing highly only weekend bookings.
You know, two to three nights. People want two nights. We're kind of trying to encourage that third night with everything we're doing pricing wise.
[00:03:07] Speaker B: Gotcha. And Tristan, would you say the same? It wouldn't expand on seasonality at all.
[00:03:14] Speaker A: Yeah, so the, yeah, the, the big, the big busy time is in the summertime and again depending on your bedroom count and you know, like a home that sleeps 22 people, that's a lot of coordination. That's a lot of people trying to work out schedules. So you might see, you know, the lead, the booking lead time especially for the summertime, you know, six, seven, eight months in advance and then. Yeah, and then you're busy. Another busy time is the ski, ski time as well. And then it dips off a little bit in March and September and then the booking lead time will change based on the seasonality. So like I said, the summertimes and you know, ski in the winter you might see a longer window of people like booking a little further ahead versus in the slow time. It might be like a same, you know, that same week that they're booking for that weekend. So just something to be conscious about, something to keep track of, of like when especially in like you know, tools like price lab, you're able to see when people are getting booked, keep track of the pacing for these different seasons. So you can like see like where a bulk of the guests are booking and then you can you know, make sure you're priced accordingly.
[00:04:35] Speaker B: Yeah, definitely make sure you're priced accordingly. So are we both using price labs on, on this? Yeah. Okay, cool.
And so what is your, what would be your recommendation for minimum night stay? So for me I don't like to especially in the off season, have more a higher than two night minimum night stay. Especially with a weekend market like this. Just because if you have a three night minimum night stay then you're, you're losing or alienating a lot of people who really just want to come for the weekend. Maybe they don't have that extra third day off of work and you know, two, two nights worth of income is better than zero nights worth of income. So what would be Yalls recommendation there?
[00:05:23] Speaker C: We have had a three night minimum further out and then we're dropping that down to two when we get within about a month's worth of time.
We've had a number of inquiries where they ask for two Nights. And depending on the weekend, we may go ahead and just grant that even if it is still a few months away. And that's just in the low season, like you're saying, in the higher season, we're seeing kind of a five night average is what we're seeing in the summertime in, in the weekend market or you know, the weekend time here. During this time of the year, we've been able to get probably 50% 3 night and 50% to night.
[00:06:12] Speaker B: All right, and would you say the booking lead time is longer for the high season than it is in the low season?
[00:06:23] Speaker C: Yes, it, it definitely is.
Most of our, through March we're already booked though for many most weekends already. And, and they, so we're probably sitting around 90 to 100 days here for the next few months. And then, but, but summer is highly already booked and so it's, you know, more like 200 days.
[00:06:48] Speaker B: Gotcha. So let's talk about the, our calendar management for a minute. So how far out do you decide to, like how far in advance do you decide to open up your calendar? So some people will have a year's worth, some people will only open up for the next six months. What do you guys do?
[00:07:08] Speaker C: It's, it's like 450 days, I think. So it's more than a year, whatever. 15 months I guess is what that is somewhere there.
[00:07:17] Speaker B: Tristan, what do you do?
[00:07:19] Speaker A: Yeah, I, I personally, I do 12 to 13 months out. I think that's a good recommendation. I think anything out, anything longer than that, there's really no point as I guess just aren't looking. Like, for example, like there's, there's not really any guests booking for like 20, 27 summer. Right. So it's, I think anything longer than the 12 or 13 months or like 12 to 15 months range. Especially consider if you're a larger property, there might be people that are definitely looking like super really far out.
Especially if you had somebody who's like, let's say it's summertime and someone books and they're like, hey, we want to book for next year. You know, that happens a ton of.
Yeah, yeah, that's basically where I'm at with that. Yeah.
[00:08:04] Speaker B: Okay, what do you guys look for in your bookings to tell you, like, okay, I think it's time to adjust my minimum night stay.
Or do you, does it just work?
[00:08:22] Speaker C: Yeah, I think that highly, highly. We're looking at occupancy.
You know, there's a kind of a balance there. If you're not getting Any bookings, then maybe something it isn't quite working the way that you want it to. And so it's, you know, we start looking at pricing or, or minimum stay.
But mostly we just kind of keep it until a little closer in. Like I said, about a month out. We're, we're adjusting at that point, but prior to that we figure we still have time to make whatever adjustments we need to still be able to pick up that booking.
[00:08:57] Speaker B: Okay, and what would you say? I feel like people are a little.
There's two schools of camp, two schools of thought. Two camps, two schools of thought. I gotta stop mixing together things that I'm trying to say today, Tristan.
So there are people who would rather have a much higher price per night and a lower occupancy rate and people who would rather have a lower price per night and a higher occupancy rate. How do you guys decide where on that spectrum you fall in this market?
[00:09:28] Speaker C: Well, we found the property that we found and really fell in love with the size of it. It was a, it was a five bedroom. When we bought it, we converted it up to eight bedroom and to be able to kind of utilize the space that it already had.
[00:09:45] Speaker A: And.
[00:09:48] Speaker C: The experience that we try to offer is where it all begins, I guess in the property and our hosting and the amenities that we provide. All those things all play into that which we try to really push towards the top tier of the market. And so by providing all the extra things that the guests are asking for, sets us up to be able to push our pricing up to closer to that higher end. And so that's kind of been our desire is to be a little lower occupancy with a little higher pricing.
We will adjust that if, if it's not working. But even in other markets that we've had the little more experience in, we've found success in going above and beyond with what we provide.
And then people will pay for that.
[00:10:44] Speaker B: Got it.
What about you, Tristan?
[00:10:49] Speaker A: Yeah, so I think it, I think it really depends on the homeowner's goals. Right. So I think if you want to, you want to buy a home and it's basically a second home and you just want it to pay for itself, then you know, you don't want like too much wear and tear than having maybe lower occupancy. And then the highly night you're nightly rate makes sense or you really. This is straight, this is straight up an investment.
You want to really maximize revpar and then like as you get closer, you kind of want to fill in the gaps. And that's, you know, I think it really does depend on, on the home, the size of the home and then also the, yeah, I would basically say like the size of the home and like kind of what you're looking at and what are your goals are and aligning those goals with what you want to do. So and, and also too it's maybe higher occupancy. It might be like some homeowners might say like it's maybe it's not worth to lower the nightly rate because at a certain point like maybe you're not making as much and it's like just not worth it. Others are saying like hey, like let's get, let's make sure revpar is extremely high and let's you know, really get the revenue going for home. And I, and I think, and then this ties into seasonality. Is there going to be times where slower and no occupancy, maybe lower and there's going to be times like the summer where you're really booked out every single week. So again, keeping track of that as well to see it's not going to be 90 all year, but it might not be 50. It might mean we have some onset are like 40 to 50. Others might be 80, 60, 90. It really depends on the time of the year. And the way you would keep track of that is having a really good comp set in your pricing software to keep track of when people are booking, how long are they booking for, how occupied are they are. They are. Right. Because like maybe you're sitting at 50% occupancy and you're panicking but everybody in the market's at 50% and just because it's slower and you know, it's a lot of weekend stays. But then you get to the busier time where like Joe was saying it might be, you know, basically a five night, five to seven night stays are most common through the summertime. So I think it really just depends on the goals. But keeping track of the data of the like average occupancies not only in the market in your submarket, but where your home's at, but also your comp set like really staying on top of that I think is, I think is key. Or either when you have lower occupancy or higher occupancy just depends on the seasonality.
[00:13:34] Speaker B: All right, and so kind of along those same lines, how often should owners be looking at their pricing and tweaking it and adjusting it?
[00:13:44] Speaker C: Oh, we're doing it multiple times a Week probably, probably two to three times a week.
Among our, we have six properties and so we uh, depending on which one's doing well, we're, we're focusing on the one that's kind of lagging a little bit, a little more. But, but by and large we're kind of looking at all of them at least twice a week to try to make sure everything as, as just the time goes by we might make an adjustment or based on the occupancy or, or different things. That way we're will make those different adjustments that way.
[00:14:24] Speaker A: I would recommend the same thing two to three times a week. I usually do three I think and that's a good balance because I think looking at it every single day is, you know, I think it's just not needed. But then also it's not as like revenue management is not a set it and forget it strategy. Right? Like it's not like you just set the base price and you walk away and you just expect all these things to happen. Like it's something you really need to stay on top of and really stay on top of. The pacing. The pacing is super important. Like are we, let's say okay right now it's December. Like is the occupancy pacing in your comp set? Is the occupancy pacing at the same rate as last year? Are we behind on pacing? Are we further in pacing? This all ties into how you're going to price the home and what adjustments you're going to make and what tweaks you're going to make. Like again like maybe you're coming up and it's slightly slower. Maybe you need to do some length of stay discounts to kind of trigger the algorithm on these, you know, platforms to increase some visibility so you can get a booking or trigger a booking because the biggest thing is you don't want to go too long without a booking because getting in the weeds a little bit. But like in the algorithms it's like they'll basically like after you go a while it just, you'll they to them because they get paid based on you getting booked. So if you're not getting booked then they're like okay, they're not relevant that we're not going to push them up to the rankings and we're just going to push them down.
So yeah, just really I, I would say honestly revenue management of this whole short term rental business, it's like 60% of it. You know, it's like a lot of it's like the operational stuff but I think the, the pricing really makes or breaks whether, you know, you could have the same, same short term rental, but someone who knows how to price and then someone who doesn't, it could have two different outcomes. And again, and that's why partnering with us at the short term shop, when you buy with us, we have a whole like sector of the company that we help you manage, we help you get with Luke and he teaches you how to price these. These are, it's extremely important, pricing wise to have your comp set and you know, of similar homes or homes that, you know, you think that you can perform like that are, you know, have similar design and amenities and location and bedroom counts and just keeping track and how they're doing and having all this data so you can make a good decision. But to go back to your question, two to three days is usually Two to three days a week is usually fine. That'll. That'll do it.
[00:17:08] Speaker B: Yeah. And honestly, the biggest, like, let the wind out of my sales thing that happens when people come to me after owning a property for a couple years and they're like, oh my gosh, I need to sell. I'm losing money. And I'll say, I'll ask them about their pricing and they say, oh, I don't do my pricing. Price Labs does it, and they like, haven't looked at it in ages and then wonder why their property is not getting booked. So two to three times a week, guys, at least.
[00:17:34] Speaker C: If I could add to kind of what he was saying there when, you know, when we started in 2020, it was a different thing, different beast than it is today. And maybe Price Labs could just do it for you and everything was okay.
But we've learned and grown over the years and tried to dial it in a little better. And so, like, with our Poconos property being the first year that we're operating, we're highly going on a couple of things are just some goals that we have on a monthly basis. We don't really look at the ADR when we're really trying to figure out what it's going to make.
We look more at a monthly basis and then our comp set and we try to dial that in of who's most like us and not just take the broad market for that, but we have a specific comp set that we do. And then on the properties we've owned longer, then we kind of benchmark it against last year, like Tristan was saying, and we've actually been able to increase each year by tightening the ship A little bit better and dialing it in more and more. And so this year was better than last year at each of our properties. And. And I think that's highly. Because of the. The getting things figured out a little more and trying to dial that in to. To have your pricing on par.
[00:18:56] Speaker A: Yeah. Yeah. I'd like to add real quick to that to what Joe was saying about monthly goals for revenue. Have monthly goals. Last thing you want to do is just have the month and you don't even know if it was a good month or not. Or maybe you got booked a lot, but the nightly rate was really low and you're really pacing behind what the competition is doing. Have night. Have monthly goals. So you have a way to measure how you're doing. If you're above on revenue, you're like, okay, that's awesome. Like, we're. We're doing better than a lot of our competitors in our comp set or maybe you're below. And then it started to ask questions. Why, like, what. What happened? Did we. Did we not reduce our rates soon enough or did we miss the booking window where a lot of the guests stayed? Is it, you know, is it just a seasonality or really, really. I'm glad he's. I'm glad Joe brought that up. It's really important to have monthly goals. That way you have something to measure up to. That way you're not just trying to rent it out and you don't really have anything to measure it. Measure it up to, like having a monthly goal for total revenue. Where do you kind of want to see the nightly rate? What do you think the occup. Occupancy is going to be?
Having these forecasted numbers so you have. Metrics is extremely important.
[00:20:16] Speaker B: So what would you say then? Since I feel like we. We're. We've gotten a little advanced here. So for a new investor who just bought a property, how would you tell them to price their property that's brand new, no reviews?
[00:20:33] Speaker C: I think. I think they really need to analyze what they bought and how they're designing it, how they're furnishing it, what kind of experience they're putting together. And then. And then really go into the marketplace and. And just find your comps that are the most like, you know, you kind of have to be honest with yourself a little bit in that. Not. Not think that you have something better than you do, but try to find those that are really with what you have and, and compete with those, because I think that's what sometimes one of the weaknesses I've found in Price Labs is that it just kind of looks at the whole market.
You know, it might take some things into consideration, but I think it misses plenty as well. And so you dial that in and, and compare yourself to what you really are. And that can be hard because sometimes you think it's your baby and, and it's, you know, it's. You put all that blood, sweat and tears into it. And so you, you think it might be a little higher than what it should be. So you have to be careful that way.
But sometimes it's nice to even stretch a little and say, I don't think I can get this, but I'm going to try for maybe only a week, a month or something and see how that goes and do some experimenting that way that you can check out your potential.
[00:21:55] Speaker B: Yeah, I would recommend that a brand new person look at their comps and underprice them by 10% for the first month just to get some people through the door and build your review base so you're not competing with people who have a bunch of reviews and you have none.
Because guests are going to look at that and go like, oh, they don't have any reviews. And I'd make sure to put, you know, new owner special in the headline, but that's what I would do. Tristan, you were going to say something?
[00:22:20] Speaker A: Yeah, well, I was actually just going to say exactly what you just said. Yeah. For someone who's completely new, the first Airbnb Price Labs looks scary.
You know, I completely understand.
Keep it simple. I would, you know, get like, like Avery said, get people in the door. You might have, if you have an exact comp of a home that's basically just like yours, but they have 70 reviews and they're a 4, 9 and above. They have the leg up on you just because they're, they have a lot of people in their comments saying, or the review saying, hey, this place is awesome. You as a new property, you don't have that yet. So I honest, to keep it as simple as possible, I just take some comps and like she said, slash it in the 15, maybe it's a little lower than you like, but just get people in the door. You know, gain that experience of, you know, hosting somebody in a home. Things aren't going to be perfect. That's okay.
But yeah, I would just keep it simple. It literally going like maybe price Labs, Airbnb VRBox and just see like what the comps are priced at that are in your community where you bought your home that are similar to your bed, count with the amenities, see what they're at. And then initially, yeah, just slash your prices a little bit so you can get some people in the door.
[00:23:44] Speaker B: We're getting towards the last few minutes, so this is kind of my last big question, but I may have a few follow ups. So if you notice, like, hey, my property hasn't had many bookings come in in the last little while. What are some things that you do to try to bump that up and maybe wake that algorithm back up to get you some bookings?
[00:24:05] Speaker C: Oh, that's, yeah, that can be so varied. You know, you want to make sure. And we're probably not good enough at looking at some of the data of, of how we're being viewed and maybe where we're losing people.
Some of those statistics are available in Airbnb, but they kind of go over my head. But you know, you want to make sure that your pricing is set right and if, you know, if you have some up close time that's not booked, then maybe it's time to go ahead and have a little bit of a sale there so that you can get not only a quick booking, but you also, because it's short, it's, there's not a lot of lead time, you'll get that review quicker as well. And then we're very proactive on our communication from the time that they first inquire to us clear through the booking and right after we ask for that review. And I mean we almost get everybody who stays with us gives us review. And so those are kind of critical. If, if you're getting only half the people staying with you or reviewing you, you're missing out on, on some of that down the road. Like you're saying that that house was 70 reviews might, might have a leg up. Well, that's because they, they have had at least 70 stays. Right. So you 140 stays and only 70 reviews. So, so ask for those. And it's easy to ask when you're treating people better than they deserve to be. And so if you just try to go above and beyond and then you ask for that review, they're giving you great reviews because of that. But so I would say run a sale when you're not booking and, and get some action happening. And what that does, like, like Tristan said, it'll trigger the, the algorithm to say, hey, this one people are looking at again and, and it will get you boosted in, in your search rankings as well.
[00:26:09] Speaker A: Yeah, no, I agree. I, the big thing that these Algorithms keeping track of is activity. So if they see a home that or a listing that is in like you're not changing things like title or description or pricing. They just think you're not really active. But if they see that you're actively trying, you know that helps with the algorithm. Algorithm. Algorithm as well. I would recommend you know, and it depends on the seasonality but if it's like a slow time and you have a weekend open, maybe run like a length of stay discount or like drop the price a little bit.
But I something I do like doing is directly in Airbnb is running the the dis like the length of stay discounts because it just tells Airbnb that you're using its tools and they like that you. Yeah. Don't. Yeah. Don't be afraid to because the thing is that especially in year one or at least the first three months, you really just want to get people in the like you not saying you can't make any money, but you really need to like focus on getting people in there and reviewing your place and have them say it's awesome and get five star reviews. That way you're kind of setting yourself up for premium pricing in the future.
Yeah. Do. Don't be afraid to lower your price especially to get get people through because the reviews is. Is a huge thing.
[00:27:31] Speaker B: Yeah yeah, I totally agree with that And I think we've covered most of the, the big things. I mean we could drill way down and get way off in the weeds on this, but this is a, a podcast for new investors. So before we go, is there anything related to pricing, revenue management, calendar management that we haven't gone over that you think a new investor listening to could benefit from hearing.
[00:27:56] Speaker C: Spend time learning. I would say because when you're new, you don't know and I guess it depends on what your background is. But, but if you, if. If you're new at this and you haven't seen the behind the scenes of pricing and, and working with that, I feel like it's kind of sits on a lever between occupancy and your nightly rate.
And you know, if you want occupancy to go up, a real easy way to do it is to drop your price. It may not be the only way to do it, but it's a way to do it. And, and if your occupancy is. Is plenty high, then maybe you should go ahead and play with raising that price a little bit. And, but there's so many tools available.
Whether you're using price labs or A different software.
They have a lot of training videos and different things to learn all the things that they can accomplish. And I would say spend that time doing your homework and learning those things and also spend your time looking at your marketplace like what are people wanting, what's getting booked and what do those places offer? Do I have all those things in place or could I do a little better with them or maybe I have them and I'm just not really selling it and so I, I can put it in my headliner or do other things to, you know, with my photos or different things to boost the visibility of what I offer. And so you can't spend too much time learning I would say, especially when you're new, but even when you're not.
[00:29:30] Speaker A: Yeah, I was going to add that.
Yeah, especially first starting out Price Labs can be scary. You know, takes time. It takes time like it, you know they, Price Labs has, and that's just one pricing tool but it's just the one that I use and it's commonly used. They have a lot of webinars that you could watch. They have a lot of training videos. They have a YouTube, it's you know, but without getting all into the weeds, like if you're first starting out, it's okay to play copycat, right. You just have to copy the right cat. So like if you have somebody in your market and you know, they kind of let Joe is saying is okay, like what do they have? What are they doing and how, and how are, how are they doing overall?
And you want those results then you could just, you could really just follow their lead until you start getting the hang of all the terms and everything that goes into Price Labs.
[00:30:34] Speaker B: So yeah, pricing really is and revenue management its own beast. And people get really caught up in what in their break even number. So when they're analyzing properties, I've noticed they come up with a well, I need to make, I need to get X amount per night to break even.
And then they forget that pricing is dynamic and it's not static. So some nights you're going to get a lot more than your break even number. And they forget about that. They forget about all those days that they got much higher than their break even number. And then when they've got a calendar sitting empty and they're priced above their break even number and they're like, oh well I can't go lower. I can't go lower because that's my break even number and then I won't break even. But that's not true. You'll actually, if you go below that on the on when you have an empty calendar, you will make quite a bit of money. We had a revenue manager on the big podcast recently, Jake, and he said he goes below that all the time and he gets higher numbers than I've ever seen in annual revenue because he's willing to go lower than anybody else just to fill not all the time. He's always shooting to get the highest prices per night, but on the the nights that you pretty much know you're not going to get booked because it's a weird time of the season dropping pretty low and getting booked consistently, you know, 15, 30 nights a month on a month when you might only get 10 nights booked just because it's the off season. So don't get so caught up in your break even number that you're not willing to go below it and you'll take zero rather than taking $10 a night lower than your break even.
Don't cut off your nose despite your face.
And that's my advice. Don't let price labs is not set it and forget it. It's a good system, it's a good tool but you have to use it, you have to manage it. And I think that's that. My two biggest recommendations for this and thank you guys so much for coming on. Thank you all so much for listening. And if you are ready to buy a house with Tristan and the Poconos, you can email
[email protected] our website is of course the shorttermshop.com or we're on all social media at the short term shop. So follow us, subscribe, do all the fun things.
