Leverage market data to optimize your pricing strategy and ensure the rates you are setting for your short-term rental (STR) are the most competitive.
Working out how to price your short-term rental can be a daunting task. Whether it is your first rental property or your tenth, understanding where you fit in your market is a challenge. MarketMinder is your compass when it comes to navigating this challenge. Using our industry-leading market data, you can position your listing and maximize your revenue.
Step One: Look Back to Look Forward
Understanding how the market has behaved historically can give you great insight into what you could expect in the future. MarketMinder shows the last 36 months of performance data on occupancy, daily rates, and revenue. Here, you can identify any patterns or trends in these metrics, as well as apply filters to make the data set as relevant to your own property as possible.
Average Daily Rate: Found in the Rates tab, shows the monthly ADR for the last 36 months. The figures shown represent the 50th percentile (median) for market performance. As a host, you can use these market figures to compare your own property’s performance.
Step Two: Predict the Future
Having knowledge of how your market is performing on future dates gives you a jump start on your competition. Pacing shows the next six months of market performance day-by-day. On any day in that period, you can see the number of booked properties vs. the number available, as well as the median rate of the booked and those still available.
Future Demand Analysis: Found in the Pacing tab, shows actual bookings for each day of the next 6 months, allowing you to see how many properties have been booked or are still available, the median rates of those booked, and of those available. Giving you foresight on how the market is tracking going forward.
To gain further insight into how other hosts are pricing in your market on a day-to-day basis, Market Rates show you up to eleven months into the future. The calendar view shows daily performance in terms of booked/available properties and the rates of both. The figure shown in the calendar box is the average rate of the properties available on that day. Therefore, if you set that rate for your listing, you would be competitive with the other available listings on that day. As with the graphs in the Research section of the tool, these graphs are filterable by the number of bedrooms and how many people they can accommodate.
Step Three: Know your Competition
Comparing your property’s performance against the market as a whole is a great way to start building your pricing strategy, but identifying direct competitors and gaining insight into their performance will really allow you to optimize your earning potential.
By connecting your Airbnb listing to your MarketMinder account, you can build a custom competitors set. Using our sophisticated algorithm, we will identify up to 100 comparable properties to your own based on how close they are geographically and how similar they are in the configuration of bedrooms, bathrooms, and guests.
You can then go through this list of suggested comps and uncheck any that you think are not comparable or direct competitors. You can also apply comprehensive filters to truly narrow down to those properties that you're matching up against.
Once you have saved your chosen comp set, you can start to look at how you compare. There are a few ways to look at this; on the My Properties page, you have the property comparison metrics:
Here, you can see a direct comparison of your property against those in your comp set in occupancy, rates, and booking lead time for the next six months. The top dark blue line and outside line on the dial, represents your performance and the bottom light blue is that of your custom competitor set. The numbers on each side of the dials are the highest and lowest in each metric, with the number in the center being your property’s average for the next six months.
To see a more detailed view of your comp set’s future occupancy and booked rate, you can use the Future Demand Analysis tool to see day-by-day figures for the next six months.
Finally, you can apply the Comp Set Only option in the filters on Market Rates (found in the Smart Rates section). This gives you the opportunity to see how your competitors have priced up to eleven months into the future.
Step Four: Be Dynamic
By now, you have a pretty comprehensive data armory to price your listing, with historical, forward-looking, and competitor insight to utilize. The STR market is not a linear one-price-fits-all model, however. Things like events, day of the week, and lead time can all increase or decrease a listing's price overnight. Keeping track of these changes can be challenging to say the least, which is where Smart Rates come in.
Our Smart Rates assess the historical performance of your listing and that of comparable properties. They then take into account those variable factors that can influence a listing’s pricing, keeping you ahead of the curve and taking the headache out of tracking market changes.