A Crowded Market: Recognizing the Need for Smart Airbnb Analytics
Over the last decade, Airbnb analytics show that vacation rentals have skyrocketed from a far-fetched booking alternative to a sector that is now growing nearly twice as fast as traditional hotels.
The marketplace that was once comprised of little more than cut-and-dry hotel rooms has evolved to essentially redefine itself: bungalows, treehouses, castles, glamping sites, spare rooms, and apartment-hotels are collectively becoming the new face of short-term rentals.
While this diversification undoubtedly benefits travelers, hosts and property managers are now faced with a much more crowded ecosystem. With increased competition comes the demand for smart Airbnb analytics: rental data and Airbnb statistics that go beyond price and occupancy.
Even though traditional approaches to Airbnb host analytics still ring true, Airbnb data now encompasses everything from seasonality to minimum night stays, booking lead times, amenity analysis, platform distribution, and much more. Here’s your go-to rundown on how to leverage Airbnb analytics to increase rental revenue in any given market.
The Traditional Approach to Airbnb Analytics: Occupancy Rates and Average Daily Rates
Until recently, much of the focus surrounding Airbnb analysis revolved around dynamic pricing: lower rates when there’s limited demand and higher rates during demand spikes. Before the advent of modern Airbnb analytics, traditional pricing strategies were a bit of a guessing game. Mid-summer weekends and end-of-year holidays were obvious times to toggle rates, but beyond that, it was mainly trial and error.
Below is a snapshot of the vacation rental market in Gulf Shores, Alabama. It’s one of the United States’ best-performing markets, and it follows a yearly trajectory that mirrors many markets across the country. Daily rates rise during the onset of summer and dip towards the year’s end.
To refine your Airbnb data analytics strategy, hone in on RevPAR, the industry’s most important metric. In the context of vacation rentals, RevPAR can be thought of as Revenue per Available Rental. RevPAR is simply a factor of average daily rates and occupancy rates and is calculated by multiplying the two together.
For example, below are examples of two Airbnbs in Nashville.
The listing on the left maintains an average daily rate of $106.48 and is booked, on average, 77.9% of available days. As a result, RevPAR for this property is $82.95 per night or $2,488.44 per month.
Meanwhile, the second property has an average daily rate of $201.14 and is booked 52.1% of the time. RevPAR for this property is $104.79 per night or $3,143.81 per month.
Despite the fact that property #1 is booked significantly more often, property #2’s higher rates make up for vacancies and end up earning 26.3% more revenue. RevPAR is a metric that evens the playing field and allows hosts to find the perfect threshold between price and occupancy.
Channel Management: Where to Publish Your Vacation Rental
How do you know whether it’s best to publish your listing on Airbnb, HomeAway, or any other booking platform? The Overview tab from AirDNA’s MarketMinder tool provides data on the percentage of listings across various platforms.
Generally speaking, traditional resort-style destinations tend to lean towards HomeAway, much like Alabama’s Gulf Shores market displayed here on the left. Nearly half of all listings are published exclusively on HomeAway while an additional 33% are listed on both HomeAway and Airbnb.
Meanwhile, urban markets (like that of Toronto shown on the right) tend to favor Airbnb. That being said, there are some extremely interesting outlier markets where hosts need to be on their toes.
The Rental Channel tool from MarketMinder allows you to determine which platform is preferred, and whether or not you should pursue a strategy of multi-channel distribution.
What percentage of listings have hot tubs? What about parking? Comparing your listing’s amenities to the competition’s is a great way to stand out from the pack. This feature can also be found on MarketMinder’s Overview tab.
Booking Lead Time
Booking lead time is another highly powerful metric to gauge the demand of any market for any time of the year. Booking lead time is simply the number of days between when a guest makes a reservation and the actual check-in date. The longer the booking lead time, the higher the demand and the greater the opportunity to increase rates.
In a market like Bogotá, the average guest makes a reservation only 16 days ahead of the check-in date. Over ⅔ of guests make bookings within 1 week of the check-in time in Colombia’s capital.
In addition to comparing different markets side-by-side, MarketMinder also offers the ability to track month-to-month fluctuations within one particular market. For example, Reykjavík sees a 36% difference in booking lead times between its offseason (March) and its high season (July).
Get Booking Lead Time Data For Your Market:
Seasonality and Future Rates
The truth is that booking lead times only tell a fraction of the entire story surrounding seasonality. In order to truly master your vacation rental market with savvy Airbnb data analysis, you’ll need to examine the broader picture of seasonality.
MarketMinder’s Future Rates feature allows hosts to pinpoint any future date, determine its expected demand, and make data-driven judgments on how to price properties. Here’s how it works.
By focusing on the Demand Score, hosts are able to determine which days, weeks, and months deserve to be priced higher, and which should be priced lower. For hosts looking for an all-in-one rental pricing tool to help them spot opportunities, leveraging Future Rates is the best way to go about it.
Rental Settings: Cancellation Policies and Minimum Night Stays
Cancellation policies and minimum night stays are two variables that often go overlooked in property management. While some hosts opt to not think twice about these factors, others work to truly make the most of them. Aligning your listing’s settings with market norms is a great way to optimize your listing — but you should also consider deviating from the averages to make your listing more noticeable. Do most hosts require a three-night minimum stay? Consider setting yours at one or two nights and make yourself available to more travelers.
Analyzing Top Properties in Your Market
Finally, one of the most effective forms of Airbnb analytics is a true side-by-side comparison. Navigate to MarketMinder’s Top Properties feature to see which listings are performing best and why. Click through to the properties’ active pages on Airbnb and see how the properties are marketed. How are the photos? What about the location? How are the listings titled and how do they hook travelers with their descriptions?
Often times the path to increased rental revenues is simply a matter of following a formula. Top Properties allows you to create a list of action items and act accordingly.