Carebnb: How revenue management helped increase revenues by 20% – 75+ apartments

Type: Apartments

Count: 75+

Geo: Czech Republic

Area: Cities

PMS: Fantastic Stay

We recently spoke to Pavel Nádvorník, CEO of Carebnb, and Maria, Revenue Manager Carebnb. Carebnb deals with comprehensive accommodation management in a wide range of accommodation facilities. They have been with us for three years and witnessed ~20% increase in revenues by using PriceLabs & optimal revenue management strategies. They have calculated this number using hard data comparison and analysis. Read this excerpt from our call to learn more about their business and their story!

Richie Khandelwal: Pavel, thank you so much for being here today and for being a customer of PriceLabs since 2017 December. I don’t know if you realize it’s been that long! To get this conversation started, tell us a little bit about you and Carebnb.

Pavel Nádvorník: My friends and partners in Carebnb were doing real estate business for a long time. They manage funds to buy residential and commercial properties. They thought that having a short-term rental property management company was a good idea to elevate their business by finding synergies.

The goal was to grow business – to be the best in quality and not quantity, and that was our focus. We invested a lot of time and effort into gaining expertise on the best revenue management practices, the best way to set up the profile, keeping in mind the algorithms that booking.com, Airbnb, and the other OTA’s use. We formulated strategies based on our research and became one of the most prominent players in the market in March (pre-Covid).

Richie Khandelwal: I’m going to come back to the COVID stuff, but first, tell me, what were you doing before Carebnb?

Pavel Nádvorník: I was working as a project manager in the software development space for the past ten years. I worked for big corporate companies, and I was pretty fed up with all the corporate stuff. At that time, I was thinking about either moving to Singapore because we had a branch there, or starting a company because I believe my strength lies in building a business from scratch. My friends convinced me to start a business with them. I was like, okay, I had nothing to lose, and it sounded fun. So I joined them from the beginning. I was leading two startups at that time. But as Carebnb grew pretty fast, I didn’t have time to focus on both the companies. So I started focusing 100% on Carebnb.

Richie Khandelwal: And if you don’t mind me asking, what was the other startup?

Pavel Nádvorník: It was a platform that allows the end-users to lease cars online. If you want to have a vehicle as an end-user, but you are not a company, there wasn’t a platform where you could see all the manufacturers having their vehicles under one roof. Like Audi, BMW, we discussed with all the manufacturers and put it on one platform, making it available for end-users.

Richie Khandelwal: Cool! So you decided to stick with Carebnb, which we’re happy about! How long after you decided to come to Carebnb, did you guys start using PriceLabs?

Pavel Nádvorník: It took us a while.

Richie Khandelwal: Do you remember what you were doing before in terms of rates?

Pavel Nádvorník: Nothing, you know! And I think this is one of our learnings that we started focusing on revenue management pretty late and could have done that way earlier. It took us a long time to realize that we could generate 20% more revenue by doing proper revenue management.

We started focusing on revenue management pretty late and could have done that way earlier. It took us a long time to realize that we could generate 20% more revenue by doing so

Pavel Nádvorník, CEO Carebnb

Richie Khandelwal: Do you remember when you joined Carebnb?

Pavel Nádvorník: It was March 2017.

Richie Khandelwal: Got it! So it didn’t take you all that long. You came to PriceLabs in December 2017. So nine months, not all that long!

Pavel Nádvorník: We came to PriceLabs in December, but it took us a while to fully use the system. .The system has several customizations, and we are continuously trying to gain an in-depth understanding of these features. I think the best way to go about using PriceLabs is a combination of automation and strategy!

Richie Khandelwal: Absolutely! Yeah, and we say this all the time because revenue management is different for each company based on their strategies of how they want to optimize their revenues. Some may want to focus on high ADR, in which case they only want to sell a few nights and only the high priced nights, and others may want to have stable revenues, in which case they’d be okay with taking lesser money, but just having that occupancy and guaranteed income. It does depend on who you are as a company.

How did you even come across PriceLabs? What were you doing before PriceLabs?

Pavel Nádvorník: I think that we were digging up a lot of information about short term rentals business. We went to conferences around the globe to discuss with other property managers about how they do this. We were greedy for information about what was best for the business. And this is how we learned that there were dynamic pricing platforms like PriceLabs. We started with another pricing solution. But we were paying too much. So we looked at PriceLabs, and we have been with PriceLabs ever since.

Richie Khandelwal: You also said that it took you some time to figure out how to use PriceLabs or set up the strategies or customizations. Are there any particular features that you like or rate strategies you use a lot with PriceLabs?

Pavel Nádvorník: I think that would mainly be a question for a revenue manager Maria. So let’s ask her.

Maria Anna Richtárová: I think the group customization feature is super helpful. You can select properties that behave similarly, and put each of them in one group and set the same pricing rules. I find this extremely useful and time-saving without manual intervention.

Richie Khandelwal: That is super cool. And Maria, what’s your background before you came to Carebnb?

Maria Anna Richtárová: I’m studying economics and with a focus on data and data analytics. I’m excited to get real-life experience at Carebnb.

Richie Khandelwal: Economics, hmm! That’s pretty much what we do! We are looking at supply and demand, which is the core of economics. Maria, you’ve been here for only a month. So I’ll ask this question to both of you guys. How has your experience been using PriceLabs for you for a month and Pavel Nádvorník for about three years?

Maria Anna Richtárová: As I am new to PriceLabs, I’d like to emphasize that it’s effortless for a new person to understand the setup and how it works. It’s great!

Richie Khandelwal: How’s the experience been over the last three years for you, Pawel?

Pavel Nádvorník: I appreciate that you are investing in the software and you are still developing and adding new features, which is great! The Neighborhood Data Multicalendar, and the Market Dashboard features are super helpful to be more specific here. And we believe it would be highly beneficial to learn more about these features from you as they are instrumental in knowing the market better and better use PriceLabs. The experience overall is excellent!

Richie Khandelwal: Great! We are releasing features all the time, so we know that it can be challenging to keep track of all the releases. Feel free to reach out to us anytime to set up a refresher training, or we can, depending on where you need help!

Also, your portfolio strategies are always evolving. We can at least give you our thoughts around, hey, this is what we are seeing, or this is what we are hearing, or this is what we are recommending,

Richie Khandelwal: Maria, I don’t know if you’ve had any experience with the support team. How’s your experience generally been with customer support or our data science team or anyone you’ve reached in PriceLabs?

Maria Anna Richtárová: I’ve had some technical problems before. So I reached out to the support team to help me, and the person was very kind, and we set up a call where we share the screen, and she helped me with anything, all the problems I had actually. And she explained it to me, how it’s worked and helped me. So I found it helpful. I think her name was Karishma!

Richie Khandelwal: Fantastic. Pavel, how about you? How’s your experience been?

Pavel Nádvorník: I think I always had a pretty quick response from your team, and they are all helpful.

Richie Khandelwal: Great! So earlier, you had mentioned that using dynamic pricing can increase your revenues by 20%. Can you tell us more?

Pavel Nádvorník: Yes. We wanted to measure the impact of revenue management and witnessed an average 20% increase in revenue. I think that if you have a large portfolio, it’s not small money! So that’s when we realized that we have results. However, it would be great to get some insights on strategizing and revenue management guidance from your end.

We wanted to measure the impact of revenue management and witnessed an average 20% increase in revenue. I think that if you have a large portfolio, it’s not small money!

Pavel Nádvorník, CEO Carebnb

Richie Khandelwal: Sure! I will schedule a call to have both — a training discussion, and a strategy discussion, to help you with how to go about revenue management and how to use PriceLabs. But it sounds like Maria is on the right track if she’s using groups and customizations.

Pavel Nádvorník: This would be great, mainly because we are starting to focus on other revenue streams. We are concentrating on hotels, glamping projects, and also other cities outside of Prague.

Recently, we have started an apartment house in South Moravia. We have nine apartments there. We have a few flats in Pilsen, and these are entirely different markets, and the apartments also behave way differently. So this is why we have to focus on the strategies in those areas as well.

Richie Khandelwal: Yeah! We can help you think through that stuff! I know time is quickly running out, so let me ask you my next question. This is where I cut you off earlier. How are you dealing with COVID changes?

Pavel Nádvorník: We made a pretty quick decision to switch the portfolio to a long term lease because we felt like the next 12 months will be slow. So we wanted our clients to be secured. We expect the market to be back where it was for the next season. Fingers crossed. I’m not that sure because we are still at the 50% nightly rates where we were before COVID at the same time last year. So I’m pretty skeptical about how things will evolve.

Richie Khandelwal: Yep! But we still have seven months to go before your long-term leases expire. We see some market correction here.

Let me ask you a trivia question. How much time do you guys think you spend on an average in a day on price labs?

Maria Anna Richtárová: Okay. So for me, I do pricing every day. I spend at least half an hour every day on PriceLabs. But when there’s larger stuff, such as pricing a new apartment, then definitely more.

Richie Khandelwal: Spot on! You are spending about 25 minutes on PriceLabs every day.

If a property manager wants to come to you and say, should I be using a pricing software? What would you say?

Maria Anna Richtárová: For me, it is super convenient and useful. I will recommend it.

Pavel Nádvorník: I would recommend it! However, some of the large companies in the Czech Republic use only Excel for revenue management, which is for me, is a big surprise. And I have had discussions with these folks! I still think it’s useful to use the revenue management software because it’s way easier to manage listings. They are companies that manage luxury listings. They spend a lot of time analyzing and setting up the prices. They may have eight listings, but generate the same revenue as we do with the 40 listings. There’s a big difference in the way they work and the way we work. So I wouldn’t compare us to them. But I would recommend pricing software to the competitors who do the same job and focus on a similar portfolio.

Richie Khandelwal: Yeah! However, they have to be careful about going into the rest of 2020 and 2021 because the historical data will be tricky. That’s where at least we believe now the real-time data of what’s happening in the market is a lot more vital than it was ever before.

Richie Khandelwal: One last question for you guys. What can we do better?

Pavel Nádvorník: I would appreciate it if we could have some experts from your team to guide us to get better ROI from the tool! To be honest, I don’t want to give full control over the revenue management to a service. So I want to have a revenue manager in house. But I would like the revenue manager to have the best information to do their daily job. And this is something I would appreciate having.

Richie Khandelwal: That makes sense. Maybe when we do the training call, I would imagine that it’d be helpful.

Maria Anna Richtárová: Yeah! Thank you for the call. Thank you for having me!

Pavel Nádvorník: Thank you, we look forward to working with you!

Richie Khandelwal: Thank you. Bye. This has been super helpful. If there’s anything that we can do,