We spoke with Jordan Locke, a pricing and revenue management expert in the vacation rental industry, to discuss how property managers can use PriceLabs for effective short term rental revenue management. Jordan is the founder of RevPARTY, a short-term rental consulting firm that focuses on revenue management and data analytics.
Hey Jordan, we appreciate you taking your time out to come chat with us. To kick things off, how did you get your start in revenue management?
I didn’t go to school for hospitality and haven’t taken the normal route through traditional hotels. I majored in economics and had a slew of pricing experience: big-box retailers, Whole Foods and Amazon, commodities, you name it I priced it. I got word that The Guild Hotels were looking for a revenue manager to build their business intelligence function and I jumped at the opportunity to build a pricing strategy from scratch based on a strong data and analytical foundation.
Once I started, I didn’t stop. The new players, markets, legislation, technology, and tools keep the space interesting, and as the niche develops it’s only more and more fun to be a part of.
Speaking of fun to be a part of, we noticed you were a panelist at the Vacation Rental Data and Revenue Management Conference (DARM) by VRMIntel this year. How was it and what were your major takeaways?
The conference was awesome this year. The organizers did a great job of setting up the tech to create a pretty seamless presenting and attendance experience. I think the fact that it was virtual may have actually been a plus because it allowed more people from all over the globe to participate.
My big takeaway was that the short-term rental industry is advancing and becoming more sophisticated when it comes to data use and revenue management. Earlier, it was mostly the venture-backed startups employing data analytics and coordinated strategies.
Maybe some of the smaller operators utilized software but it was mainly for automation to reduce the work required to run a vacation rental. Now, a lot of the industry is buying data, working on detailed strategies, and using tools like PriceLabs for revenue management.
Have any of your clients used PriceLabs before?
I’ve had lots of clients that used PriceLabs and were very happy with the product. I think its been a particularly good fit for larger portfolios and property managers that were looking to take control of their revenue and really commit to a pricing strategy.
What’s your experience with PriceLabs and what do you like or find the most useful?
In my experience, PriceLabs is really good at taking in both the market data and listings own pace into account (occupancy-based & portfolio occupancy-based pricing). When looking at the booking curves and pick-up rates of properties using PriceLabs they’re always extremely smooth and the results are consistent.
Booking curves that smooth probably mean the property manager isn’t working to maximize their revenue but it is an extremely sturdy foundation on which to build a revenue management strategy.
PriceLabs allows for some of the most detailed customization in the industry. One great example of this is the occupancy and booking window matrix that prescribes various discounts. Pricing at that level of granularity, at the cross-section of variables, is what really allows a portfolio to create a great pricing strategy. Lately, I’ve been using the Market Dashboards to help my clients navigate their portfolio’s COVID recovery.
You mentioned the COVID Pandemic. How are your clients handling the impact of the pandemic in their revenue management strategies?
It varies a lot by portfolio. The destination markets are performing better than urban markets. Most saw a pretty harsh dip after March but around June started to see somewhat of a recovery. Now a lot of my clients are doing well and trying to adjust their revenue management strategies not to an emergency scenario but to the changes in consumer behavior; like changes in booking windows, price sensitivity, cancellation policies, and the like.
Have you utilized the PriceLabs market dashboard or the U.S. stats to track market and portfolio recovery?
I have. And especially since the dashboard was free I’ve recommended it to my clients.
The big problem with navigating the entire COVID market shock is that nobody knows exactly what to expect or what we should be looking for. We’re comparing year over year data, month over month data, market data, property data, and across all sorts of metrics. While it’s hard to say exactly when everything will be “back to normal,” we can track changes to individual metrics and try and make them useful.
Without outside data, drawing any sort of actionable conclusion would be impossible. While I can’t narrow it down to a “COVID Effect”, I can tell how the market is different now compared to before, then how a portfolio varies from the market, and I can use that information to temper expectations, identify opportunities, and accurately assess what I can and should do as we move forward.
The PriceLabs dashboard allows managers to do that. And they can do that across multiple metrics: booking window, occupancy, ADR, etc. So then it’s possible to adjust a revenue management strategy to address specific differences in certain metrics across a portfolio and market.
Plus, the dashboard has some forward-looking data which is always useful. It allows managers to be proactive and use leading indicators instead of historical analysis. And if all that’s too much … just use the recovery index on the US stats page!