Type: Apartments, Studios
Geo: Multiple Locations
Andrew Lenjosek from UpStay believes in relying on credible data, his instinct, and the market knowledge he has gathered after years of experience in the industry to set strategies that best serve him and his clients. PriceLabs’ dynamic pricing solutions help him do the same efficiently by providing him with a space that integrates automation, strategy, and intelligence.
Since he started using PriceLabs, Andrew’s portfolio lies in the 90th percentile, and he is in the top 10% of performers in his market. Keep reading to know more about how they find PriceLabs helpful in terms of the features that we offer and the revenue output.
Andrew Lenjosek was an investment banker on wall street before becoming a real estate developer and investor six years ago. He launched his vacation rental business in 2019 in upstate New York. His primary goal was to manage vacation rentals from an investment perspective and outperform the market by combining technology design and vertical integration.
Andrew manages 350 units, and there are another 100 properties that are under development. These properties are primarily apartment assets, studios, and three-bedroom apartments in Ontario, Ottawa, Toronto Hamilton in Canada, and Florida in America.
Challenges faced by Andrew before using PriceLabs
1. The listings were underperforming due to the absence of a pricing strategy
Andrew initially hired a third-party property manager to manage his listings. As his property manager’s business grew, Andrew’s listings were increasingly neglected, and no pricing strategy was applied.
Due to this, the quality and performance of his listings suffered.
Andrew realized that he needed to have more control over his listings. To manage the pricing of his unit, he started first with a basic product called air GMs at the time. It’s now iGMS.
“Initially, I hired a third-party property manager and let her have control over my listing. As she scaled her business, my unit was increasingly neglected, and my rates remained static. I couldn’t have my life savings in a business that someone else is controlling and not controlling well.”
– Andrew Lenjosek, Owner, Upstay
2. He was losing money due to static pricing across the calendar
Andrew was using iGMs, but they offered static pricing. He manually studied his competitor’s pricing and performance on Airbnb. The analysis made him realize how much money he was leaving on the table due to the absence of a dynamic pricing strategy for his listings. His calendar was booked entirely at significantly lower rates than the market price.
Even though he had a very high occupancy rate, he was earning significantly lower than what was possible. He sees this as a rate problem that many property managers face.
3. Andrew could not utilize his market knowledge due to less control over his listings
As his business grew, Andrew started using Guesty PMS with a third-party dynamic pricing solution to manage his listings. The ‘set it and forget it’ concept promoted by that solution was not a good fit for Andrew since he could not apply the market knowledge he had gained over the years working in this industry.
He believes in connecting the quality of the underlying unit to the rates he is charging and needs the ability to make changes based on various factors.
Andrew also has a comprehensive internal scoring system of what factors drive investment performance. But his dynamic pricing solution did not offer room to analyze the performance as he would like to.
He was also earning less due to the commission structure of his then dynamic pricing solutions.
4. Andrew needed more flexibility for accurate market analysis.
He was studying the market and his competitors. He analyzed how they filled their calendars with different prices and policies. This practice was not enough for him in a market like Hamilton, Ontario, where he was the only property manager in the market.
He had to manually override some of the baseline characteristics because he realized he was not copying sophisticated actors but other people who were not well-versed with the market. Andrew needed more flexibility to choose his competitors whose data he wanted to analyze.
He was a one-person revenue department handling all the pricing strategies.
Andrew came across PriceLabs when he met a PriceLabs team member in Israel at Guesty Val in 2019, just before COVID. The features and prices offered by PriceLabs turned out to be the perfect fit for him, which prompted him to use PriceLabs’ free trial. He specifically loved the concept of market indexes provided by market dashboards.
How PriceLabs help Andrew grow his revenue?
1. The multiple customizations in PriceLabs provided the control he needed to build an efficient pricing strategy
PriceLabs provided him with a perfect blend of automation, strategy, and intelligence. For Andrew’s business model, where he invested his capital, he felt the need to be agile with his approach and completely control his listing.
PriceLabs provides daily data updates and market insights to Andrew. The customization and tools help him to use that information to create pricing strategies that best serve him.
2. PriceLabs customer support helped Andrew create and implement different strategies
With PriceLabs’ customer support, Andrew expanded his understanding of dynamic pricing and how setting different customizations helped generate more revenue and fill his calendar.
He got information about the baseline tools to set his pricing. He was also able to understand the logic behind using the tools, which assisted him in trying out various strategies and choosing the ones that work best for him.
As his business grew, he hired a team to manage his revenue. PriceLabs market dashboards are the source of most of their pricing strategies. The product offers them the flexibility to change their strategy as they move through different demand seasons. In the context of their pace reports, they use PriceLabs’ baseline algorithms.
“I think you guys outperformed in terms of your customer service. I had meetings with one of your representative who spent hours teaching me about the product.”
Andrew Lenjosek, Owner, Upstay
3. Market Insights helped him proactively take action during changing demand trends
Andrew uses PriceLabs Market Dashboard to keep up with the market trends. This came in handy when Covid hit the market.
Andrew decided to scrap his existing strategy of seeing historical pricing and following the current strategy as he recognized that they were sailing through a highly turbulent market.
He plugged into PriceLabs to study how the other property managers responded to this and how the demand curve was flattening. He aggressively made changes to his strategy according to his inferences.
Covid had peaks and troughs like in Canada, where there were repeated lockdowns. Andrew used the PriceLabs market dashboard to gather competitive information and took immediate action accordingly. He immediately slashed prices and started undercutting competitors.
He understood that the demand was thin, and he needed to take a weak pricing position because less revenue was better than no revenue. Also, PriceLabs being affordable gave them a buffer to survive as a company.
|Suggested: How to Get More Bookings During Covid?|
4. The daily data updates assist him in setting the correct discounts and premium policies to maximize his occupancy and RevPAR
Andrew can see changing market trends daily and adjust his strategies accordingly. For example, in Orlando, the month of September witnesses low demand but in September 2020, there was more than usual demand because of pent-up demand that ended up being pushed because of lockdown. Andrew would have missed out on this demand if he was not using PriceLabs’ market dashboard and dynamic pricing tool by keeping his listing priced low.
With PriceLabs, he can see how his booking windows are performing relative to the market and how his booking windows change in different seasons. He then incorporates that information into his discount and premium strategies so that his pricing strategies are in line with those booking windows.
The offshore India-based agent does data polls from the market dashboard and then loads them into their pace reports. This gives them complete analytics about what percentile they price their listings relative to the market and what percentile is their occupancy and RevPar are comparable to the market.
“We’re able to use the insights from PriceLabs to show our expertise and performance within our market. These insights are used as conversion tactics to acquire new owners as they can see that all my portfolios are in the 90th percentile. This means I’m in the top 10% performers in a given market.“
– Andrew Lenjosek, Owner, UpStay
Andrew increased his revenue using Pricelabs dynamic pricing solutions and Market Dashboard. He was able to identify demand spikes that he wouldn’t have been aware of otherwise. The market dashboards allow him to stock and study the competitors.
In terms of his revenue, he could price his listings between the 50th and 75th percentile within any market. His rev par is typically 90th percentile or above.
“We’re able to use the insights from PriceLabs to show our expertise and performance within our market. These insights are used as conversion tactics to acquire new owners as they can see that all my portfolios are in the 90th percentile. This means I’m in the top 10% performers in a given market”, said Andrew Lenjosek.
The PriceLabs Market Dashboard also facilitates Andrew to identify and study underperformers within every portfolio. He uses the insights from the market dashboard to convince owners to adjust or improve their low-performing properties to increase their revenue. The data assures the client that they are making sound investment decisions. As a property manager, Andrew fulfills his duty of making sure that his clients’ listings perform well.