Today, we hear from Christian Eriksen, one of the Co-Founders of Nord Collection. Nord Collection uses PriceLabs with Guesty to distribute dynamic prices and min-stay to all channels like Airbnb, Booking.com, HomeAway, etc.!
“We manage 100+ listings in Copenhagen and have a few ApartHotels on the way, three buildings with a total of 70 apartments.”
As a property management company, we receive a cut of the revenue. We quickly realized that a substantial proportion of our costs were one-time costs associated with a booking. Hence, a 1-day booking is almost as expensive for us as a 7-day booking.
Until we found PriceLabs, we used to allow for all length of stay, and we were pricing all listings ourselves. This meant a lot of one to two night stays.
“Using the features of PriceLabs, we managed to grow our average length of stay from 3.1 nights to 4.3 nights, an increase of almost 40%. In the same period, we grew the revenue of the same listings with 10%+, even though we had lesser (but longer) stays.”
A short length of stay booking not only has fixed costs and associated hassles of check-in/check-out, but there’s also an indirect cost that many don’t consider. Short length of stay bookings generate little revenue but block several other possible stays. E.g., a 1- night booking from Saturday to Sunday will block an extended stay over the weekend.
This effect is drastically underestimated by many in the short term rental industry. Still, it has the potential to grow revenue more than most other initiatives.
In our company we use the settings of PriceLabs to do this:
- Putting a relatively high minimum stay (4) for stays very far into the future
- Allowing for 3-nights stay for bookings in the middle
- Allowing for down to 1-night stay for the last minute!
The most important setting, however, is the orphan day discount, which lets you fill-up the gaps that are left un-booked actively. It’s a handy tool that’ll give you much higher occupancy.
Minimum stay for orphan bookings
The downside of using minimum stay rules is that you have days that are un-bookable. To account for this, we use the “minimum stay for orphan bookings”-setting. This will allow you to receive shorter stays in periods where there are only a few days available.
“Compared to other price optimization services, PriceLabs offers a wide spectrum of functionalities, e.g., the possibility of setting dynamic rules for the minimum number of stays. My company manages 100+ Airbnb rentals. After our partnership with PriceLabs, we’ve seen a big increase in revenues and a smaller workload for us.”