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 their channels like Airbnb, Booking.com, Homeaway etc.!
"We manage 100+ listings in Copenhagen and have a few ApartHotels on the way, 3 buildings with a total of 70 apartments."
As a property management company we receive a cut of the revenue. Very quickly we realized that a very large proportion of our costs were one-time costs associated with one booking, hence a 1-day booking is almost as expensive for us as a 7-day booking is.
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 1-2 and to 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 much fewer (but longer) stays."
Except for all the hassle and costs associated with handling a booking there’s a very big indirect cost: Small bookings will generate you very little revenue but still block a number of other possible stays. E.g. a 1- night booking from Saturday to Sunday will block a long stay over the weekend.
This effect is drastically underestimated by many in the short term rental industry but 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 in the very near future
The most important setting, however, is the orphan day discount, that enables you to actively fill up the gaps, that are left un-booked. It’s a highly effective tool that’ll give you much higher occupancy.
Minimum stay for orphan bookings
The big threat of a putting minimum stay rules is that you’re left with days that are un-bookable. To account for this 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 manage 100+ Airbnb rentals and after our partnership with PriceLabs we've seen a big increase in revenues as well as a smaller workload for us."