Understanding the pace in which guests are booking short-term rentals is a critical part of any host or property manager’s pricing strategy. Whether it’s gearing up for normal annual seasonality, a major annual event, or a special one-time city-wide celebration, having this information gives you a competitive edge for maximizing booking revenue.
How far in advance guests book their stays varies widely from market-to-market and month-to-month. There is no substitute for having real-time forward-looking rate and demand insights for your specific location, but analyzing Airbnb booking lead times for a few events might shine some light into guest booking behavior.
What is Booking Lead Time?
Booking Lead Time is the period of time between when a guest makes a reservation, and the actual check-in date.
If a guest makes a reservation on March 1 and the check-in date is Mar 30, then the booking lead time for that reservation is 30 days.
Alternatively, if a guest makes a reservation on the same day as check in, then the booking lead time is 0 days.
Seasonality: Antiparos, Greece
Antiparos is an island between Athens and Greece’s southernmost island of Chania. It also happens to be the fastest-growing Greek market with a whopping 105% increase in Revenue Per Available Rental (RevPAR) from mid 2016 to mid 2018.
Like much of Greece, Antiparos is heavily seasonal, with 75% of its total annual short-term rental revenue being realized during just two months of the year: July and August. When looking at Antiparos’ booking lead times during its high months of June, July, August, and September, we notice it correlates positively with demand. The higher the demand, the longer the booking lead time.
On average, Aintiparos guests book their August short-term rentals seventeen weeks in advance. What this tells hosts and property managers on the island is that as early as April, you should be positioning your listing for summertime. Get creative with marketing by leveraging details about upcoming events, including your rental’s proximity to the events and other nearby attractions such as beaches.
Over 50% of Antiparos hosts kept the same rate for the entire month of August, representing a massive opportunity for hosts and property managers to get competitive with their rates. Demand change outpaced rate change throughout Antiparos’ core months, especially July and August, where the lack of attention on managing rates really hurt the island’s overall ability to maximize RevPAR.
Demystifying Booking Lead Time for Pricing
MarketMinder is like having a secret spy glass into your market, allowing you to monitor future demand, including booking lead time, in real time. It helps you implement smarter pricing strategies and beat out your competition. In the snapshot above, MarketMinder is showing us a daily calendar view of demand, occupancy, median booked rates, and median available rates. Instantly, we can see days of low demand (red) versus days of high demand (green). Across May into June, we can see demand starting to pick up for the coming summer season.
At the time this blog post is being written, June 13th, 2019 is about 6 months out, and Antiparos’ overall occupancy is sitting at 12% for that day. However, the median booked rate is higher than the median available listing rate, signaling an opportunity for savvy hosts to begin raising their rates.
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Annual Event: Running of the Bulls
The annual running of the bulls takes place every year in Pamplona, Spain, between July 6th and July 14th, making it an interesting test case for analyzing booking lead time. Because of these consistencies, guests can be confident well in advance about booking on the correct days.
Perhaps one of the best examples of “the early bird (in this case guest) gets the worm” we have ever seen! In anticipation of the 2018 running of the bulls, 16% of guests made their event-day bookings nearly a full year in advance. These lucky guests also happened to book at some of the lowest rates booked for the week-long celebration.
It is a good lesson for hosts in markets that host large annual events; it’s never too early to be competitive on rates. Although it might feel counterintuitive, those weeks where things are just beginning to return to normal is exactly the time you should be positioning your short-term rental for next year’s big event –at least that is the case in Pamplona.
In the final weeks leading up to the event, bookings continue strong and there are fewer drastic peaks and troughs in booked rates. Some of this is due to there being a higher volume of bookings at various rates, as well as guests taking advantage of last-minute supply entering the market from hosts hoping to cash-in on the big event.
One-time Event: The Royal Wedding
There is nothing quite like the announcement of a Royal Wedding to bring the otherwise sleepy British village of Windsor to life (at least for a day or two). On November 27, 2017, the Prince of Wales announced the engagement of his son Prince Harry to Meghan Markle, as well as their wedding date and location: May 19, 2018 at Windsor Castle.
From the day it was announced, people began making preparations to join in the Royal wedding traditions.
In fact, 19% of all bookings for the day of the wedding were made within the first four weeks from announcement. Another 34% were made by a rather last-minute crowd of guests, who booked within the final four weeks leading up to the wedding. For this one-time event, we saw a spike in demand for May 19th right after the announcement was made, and again right before the wedding.
Having insights into booking lead times during the months leading up to special events help hosts make smarter pricing decisions. For example, knowing that bookings sometimes spike right after an event is announced and then again right before the event might help a savvy host maintain a higher rate during a midway lull, whereas a less savvy host might have panicked and dropped their rate, losing out on an last-minute booking at a higher price.