How do fellow property and revenue managers create revenue estimates for new properties and pick the right comparables? How do they use estimates to set realistic revenue expectations with homeowners?
Then this exclusive Masterclass is for you!
In this rich and diverse conversation, Host Thibault Masson, Head of Product Marketing at PriceLabs and Founder of Rental Scale-Up, talks with industry experts:
- Randy Jensen, Revenue Analyst, Grand Welcome
- Jasper Ribbers, Co-founder, Overnight Success
- Becca Madigan, Solutions Consultant, PriceLabs
The panel shared a variety of insightful viewpoints, drawing from real-world experiences to offer practical advice for large property managers.
Session Highlights
- The main metrics needed to create a revenue estimate
- Tools and techniques used by pros
- How to pick the right comparable listings
- How to create a high volume of estimates fast
- Conversations with homeowners: Setting the right expectations
Watch the replay on YouTube
About the speakers
Randy Jensen, Revenue Management Analyst at Grand Welcome, is fervently dedicated to maximizing revenue and market share for suppliers. With expertise in Hospitality Revenue Management, Corporate Housing, Short Term Furnished Rentals, Airline Revenue Management, and Real Estate Vacation rentals, he specializes in OTA management and multiple property Revenue Management.
A former equity arbitrage trader, Jasper Ribbers runs several online businesses. He’s the author of two books, the latest one, ‘Get Paid For Your Pad‘, being about how to rent out a property on Airbnb. Jasper co-hosts the podcast, ‘Get Paid For Your Pad‘, a show that covers all subjects related to Airbnb hosting as well as real-life experiences told by Airbnb hosts from all around the world.
Rebecca Madigan has been with PriceLabs for nearly three years. She currently leads the US Solutions Consultants team and is passionate about helping vacation rental owners and managers across North America to interpret data and fine-tune their pricing & revenue management strategies.
Q. Why are revenue estimates important? What do they help achieve?
Randy Jensen said revenue estimates are crucial for property management companies to show realistic and achievable projections to property owners. He also emphasized that communicating the information and rationale behind the estimates to property owners or sales teams is critical.
Jasper Ribbers explained that developing expertise in revenue estimation is essential for making informed decisions. Comparing estimated revenue with actual results helps identify flaws in marketing strategies or opportunities for improvement.
Becca Madigan said that accurate revenue estimates play a vital role in persuading property owners to sign onto management programs. Regularly evaluating estimates against actual results helps refine forecasting techniques and improve overall performance.
Q. How to create revenue estimates? What are the main metrics to focus on and what tools or techniques to use?
Becca Madigan emphasized educating homeowners about revenue metrics beyond Average Daily Rate (ADR) and focusing on Revenue per Available Room (RevPAR). She stressed the importance of fine-tuning data sources and adjusting estimates based on factors like market seasonality, property aesthetics, and unique selling points such as pet-friendliness.
Jasper Ribbers discussed the process of selecting comparable properties (comps) for revenue estimation, including analyzing property photos, reviews, and market demand to understand pricing strategies and guest preferences. He advocated the analysis of the highest-performing listings to understand what drives their success and apply those insights to optimize one’s own marketing strategies.
Randy Jensen highlighted the challenge of handling high volumes of revenue estimations and the need for efficient tools and methodologies to maintain accuracy while meeting demand. He recommended providing tailored recommendations to homeowners based on current pricing strategies and market demand, demonstrating the company’s expertise and market knowledge to build trust with clients.
Q. What are the challenges in generating revenue estimates for properties?
Randy Jensen highlighted the simplicity of revenue management compared to other industries like hotels and airlines but noted the lack of data in the vacation rental industry. He advised taking the available information and presenting it in a manner that will empower property owners to make rational decisions. He emphasized the importance of understanding the goals of property owners, whether they prioritize rate, occupancy, or revenue per available room (RevPAR).
Jasper Ribbers mentioned the difficulty in creating perfect revenue estimates due to factors like unpredictable events and pacing. He advocated using available data, such as historical performance and pacing reports, to adjust revenue estimates accordingly. He underlined the fact that unforeseen events can impact revenue performance so it’s important to keep an eye on relevant news and trends.
Becca Madigan recommended using historical data and multiple sources to create estimates and projections, emphasizing the usefulness of market knowledge alongside automated tools. She mentioned using PriceLabs’ Market Dashboards to discover and analyze historical market data.
Q. How do you share the estimates with homeowners? What happens if they expect something better?
Randy Jensen emphasized the importance of detail in projections and recommended inviting communication with homeowners to review specific data before presenting. He acknowledged that disagreements over projections are common and often stem from differing expectations. However, he stressed the importance of understanding the homeowner’s goals and risk tolerance. He also mentioned using data from PriceLabs to justify revenue projections and educate homeowners about market dynamics.
Jasper Ribbers began by discussing the importance of understanding the homeowner’s expectations before providing estimates. He suggested having transparent conversations with homeowners, involving them in the estimation process, and being open to learning from their perspectives. He also shared a strategy for creating estimates when there’s limited comparable data by analyzing similar markets with more inventory.
Becca Madigan emphasized the importance of being transparent with homeowners and involving them in the process to build trust and manage expectations effectively. She also suggested using PriceLabs’ Revenue Estimator Pro to help showcase the earning potential of a property to its owners.
