12 Replies Latest reply: Nov 25, 2019 6:59 AM by ohst8er RSS

    Yesterday's "opportunity" today...

    feibus Senior Contributor

      Today is Nov 22, here's what's in my dashboard:

      Annotation 2019-11-22 150124.jpg

      Even 14 hours ago would have been around midnight, so there's "something not quite right in the head" with the dashboard cards.

       

      I reported it through the grapevine, but just in case you happen to see this...

        • Re: Yesterday's "opportunity" today...
          wildiris Active Contributor

          Hey, "hindsight is 20/20." 

          • Re: Yesterday's "opportunity" today...
            ohst8er Premier Contributor

            Apparently that person who said, "there's no time like the present," was wrong.

            • Re: Yesterday's "opportunity" today...
              timthek Active Contributor

              if you go back in time a few days and drop your price for yesterday by $5 you might have gotten a booking. You should really give it a shot.

              • Re: Yesterday's "opportunity" today...
                newt Contributor

                I'm not sure why anyone would want to lower their prices to get a booking anyway. Owners should be focusing on profit not occupancy rates It is much more profitable to have fewer higher value bookings than loads of bargain hunter who trash your property.

                  • Re: Yesterday's "opportunity" today...
                    ohst8er Premier Contributor

                    newt, it’s quite simple really.  unlike homes or cars, nights are perishable commodities.  the night that passes is an opportunity that is gone, forever.  Higher rates don’t pay my bills if the nights pass without getting booked.

                      • Re: Yesterday's "opportunity" today...
                        newt Contributor

                        The same could be said of trains, airlines, restaurants, hotels etc. I've never got a discount for a hotel room on the day or gone into an empty restaurant and said "you haven't got many customers and you're paying your chef etc and the table would otherwise be empty, will you give me 30% off?"

                          • Re: Yesterday's "opportunity" today...
                            ohst8er Premier Contributor

                            newt, You're thinking like a customer.

                             

                            To you, or anyone else reading this... IF you are wealthy enough that you don't need to worry about whether your place is rented or not, then anything I say after this sentence won't matter a bit to you.  But... if you are like me, you need to rent your place to cover your expenses.  So, if you are still reading into this next paragraph I'm going to give you some things to think about.

                             

                            Still here?  Well ok, here goes.  Yes, just like trains and planes and restaurants.  Same philosophy.  Their nights, their seats, their tables are all perishable commodities.  When the flight leaves and the seat is empty, that's revenue forever lost.  When the restaurant closes and tables went unused, that's revenue forever lost.  A savvy restaurant/airline/hotel will figure out ways to get customers to part with their money.  I heard it said yesterday on a talk radio show, everyone is in competition for your money (if you are the customer).  YOU are in competition for my (his, hers, their) money, as the VR owner.

                             

                            First let me get this off my chest...I'M NOT A HOTEL.  You're not a hotel, etc.  And we all hate being treated like room 202 at the Expedia Inn.  Now that we dispensed with that, let's get down to this.   If you're not managing your rate structure as though you ARE a hotel, you are missing out on revenue.  Revenue that is forever lost.  We, each of us, have exactly TWO nightly occupancy rates available to us.  100% occupied (per each VR you own), or 0% occupied.  We don't have 20 rooms to sell, 200 rooms to sell, etc.

                             

                            I've sat in many many rate management meetings, in hotels from 120 rooms to over  700 rooms.  We looked at our rates 30-60-90-120 days out, what was coming in to the area, how we could capitalize on events, what our competition was doing etc.  Those rates we set 120 days from now?  Next week we looked at them again.  We looked at our current occupancy, we looked at our historical occupancy, we looked at our competitors rates and occupancy, etc.  We did it this week, we'll do it again next week, and the following week, etc.   We as VR owners should be doing the same.  I set my rates 24-32 months out.  I haven't looked at them in awhile (we are in our slow/no booking season), but sometime in the next month I'm going to take a look at them for next spring and summer, then into fall.  Once I am certain I am happy with the rates I have SET, I'll look at how much I chose to increase them for 2021.  When our spring weeks fill up, I'll look again.  When our summer weeks start to book I'll relook at them again, several times.  I'll ask myself, am I being too aggressive?  Am I being aggressive enough?  I'll second and third guess myself, compare our rates to our competition, compare our looks to our inquiries.  In the end I may do NOTHING with the rates I've set, or I may change them.

                             

                            That's the beauty of our "new" rates editor.  If I have a 5 day hole in May and we are close in, I can try to plug it up by lowering the rate a smidge.  If I look at our summer rates and see they are booking pretty quickly (even though we have one of the highest rate structures in our comp set), I may choose to take that last week in July and bump the rates by 5$ a night.  Why?  Because I can, frankly.  If we are into the 2nd week of July and I see the last two weeks of August are still empty (can we please stop making the kids go back to school earlier and earlier??)  I know I was probably too aggressive, yet again, with my last two week of August rates.  I know my market is families, and I know that there aren't as many families to draw from now that much of school is back in session, so if I want to book, I better react by adjusting my rates downward.

                             

                            If you care to hear my opinion about factoring in costs, etc., and that point about whether it makes more sense to just sit empty I'm happy to share that with you as well.

                              • Re: Yesterday's "opportunity" today...
                                newt Contributor

                                Yes you are obviously thinking about your rates and I don't have any problem with that. You're obviously researched your market and know it well.

                                 

                                What I am against is the knee-**** reaction of lowering your price because another owner has booked at a lower price. If HA tell you that a neighbouring property has just been booked for less - well, another guest cannot book that property and yours may now be the cheapest available for the next guest wanting to book. Why lower your price? And being the cheapest may not be the best either - some guests think that a higher priced property is better.

                                 

                                I get plenty of last minute bookings - people booking to arrive the next day/next week - and I'm better off getting 2 of these full price than 3 at a massively discounted rate. People underestimate the wear and tear on the property (beds. carpets, furniture, linen) when they aim to be 100% booked.

                                  • Re: Yesterday's "opportunity" today...
                                    feibus Senior Contributor

                                    Depending on your MM settings, it will also suggest you raise your prices.  I've had that happen as well, because I set it to try to get more revenue instead of more nights.

                                     

                                    However, in general, last-minute bookings are generally lower priced for exactly the reasons ohst8er explains: many many owners want to maximize revenue, so they'll offer a slight discount to fill nights that otherwise would have generated $0 revenue.  If everyone in your market is doing that, maybe you'll need to do it as well to get those nights booked.  Or maybe you won't.  It's a gamble until the night can no longer be booked, right?

                                     

                                    I look at the "opportunities" as suggestions and use it to begin my research into what I should do instead of something I need to take as the gospel truth about my market.  Unlike some of the dynamic pricing engines out there, we aren't paying extra for the feature, so we shouldn't feel obligated to use the feature.

                                     

                                    And my window for exploring whether to adjust my rates is primarily the next 60 days.  Further out, I'm just watching to see how things are booking, since I don't want to be the first booked or the last booked home in my area.

                                    • Re: Yesterday's "opportunity" today...
                                      ohst8er Premier Contributor

                                      newt, couple of things here, and this applies to my market, but not necessarily yours.  

                                       

                                      I don't think about wear and tear when it comes to shooting for 100% occupancy.   Sounds boneheaded of me, right?  Well, not when you know and understand my market.  My bread and butter comes from those 10 prime weeks in summer.  Who stays in those 10 weeks?  Families.  In my 3 bedroom condo there are as many as 5 kids at any given time.   We are primarily an outdoor destination (my condo isn't the destination, unlike a cabin in the mountains.)  so our guests spend most of their time outside.  But, when they are inside there's juice boxes and cheetos and handprints and feet on the couch, you name it.  The biggest wear and tear on my place happens during those 10 weeks.  But I need it.   ONE WEEK in June/July/August pays for ONE MONTH of expenses.  So from when prime season starts we are humping with Sat in and Sat out.  I hit all 10 weeks and that's 10 MONTHS of expenses guaranteed to be covered.  If I get those other two prime weeks in August that's my whole year's worth of expenses taken care of.  

                                       

                                      Juxtapose that with December, one MONTH worth of bookings will, maybe, pay one month's electric bill.  December is historically dead.  I have exactly 7 nights booked in December.  Sometimes I have ZERO bookings.  November?  Same.  January and February?  We usually get a one month snowbird, and the other month sits empty.  We do well in the spring, decent in the fall, but nothing like summer.  So summer pays my bills, the rest of the year pays my expected unexpected expenses (I know at some point I'm gonna need a plumber, I just don't know when), and those unexpected unexpected expenses, like breakage and breakdowns. 

                                       

                                      As far as reacting to my neighbors, and flinching every time they drop their rates?  Nope.  Never.  Why is that?  Because unlike those hotels I mentioned above with their rate strategy meetings and the like, I assume my neighbors have no idea what they are doing.