As an investment property owner we love to see our units get booked and we get really excited when we it books to top dollar too! But what is “Top Dollar”? Take a minute and think where you consider the value point to be.
Spoiler alert – it is virtually impossible to define as it is highly subjective. To the consumer – $200 may be top dollar. To the owner $1,000/night is a dream top dollar. The reality is ‘It Depends’ and its somewhere in between. IF we always market at $1,000/night however we may have very few bookings.
As a strategy we want to find the ideal balance between price as well as occupancy – the sweet spot. We look at the best winning strategy is similar to how a coach works to win a baseball game. They do this by focusing on base hits – singles and doubles. The percentages of success goes up on singles. When we load the base throughout the year our revenues are consistent and predictable. Then we set ourselves up for home runs on key events such as Presidents Day, Thanksgiving etc. – and at the end of the year we will have a winning season. If we focus on only the home run or big plays, and not the basics and fundamentals, then our joy will be limited and far and few between. Keep your eye on the year over year performance.
Escape Properties has invested significantly into predictive pricing tools that analyze your property comparatively to other like properties within a geographic area using anonymized data through Airbnb, VRBO and our historical transactions. This is powerful AI technology similar to what the airline industry uses to predict occupancy and rates.
As such we, as a team, only need to look at 2 numbers. Your BASE (the number the AI +/- value from to set the daily rate) and the MINIMUM or the lowest daily rate we will accept for a booking. At the start we will analyze your property and help set these numbers. Over the first 6 months we review how the property is doing and make micro adjustments to fine tune performance. There is a score tool in the system. Our objective is to keep that score at +/- 5 points of 80 on a scale of 0-100. This is a health score. If the score is too high suggests that our rates are too low and occupancy it too high and placing operational stress on a property. Too low suggests that our rate is too high and our revenues are not going to be where we want them to be.
As the owner, you’re part of our team in setting occupancy and revenue plans. Our role is to execute and report back. About 2 times per year we will connect with you to review these goals and objectives and plan special pricing or marketing strategies with you. To me, this is the fun of vacation home ownership – fine tuning its performance.