The Metrics That Matter: Why Proactive Revenue Management Wins

In this episode, Jamie Lane, Chief Economist at AirDNA, is joined by Henry Corell, Founder of Rev Up Rental, a leading consultancy specializing in revenue management for property managers across North America and Europe.

Henry's journey began with hands-on property management experience in Scottsdale, where he discovered his passion for revenue optimization. Starting by manually adjusting rates by a dollar at a time across platforms, he evolved into a data-driven specialist who now advises property managers globally. "I go further than just setting up pricing software. I add forecasting on top, using different data points to make calculated decisions before it's too late," Henry emphasizes.

Revenue Management Fundamentals for Short-Term Rentals in 2025

What Is Revenue Management Beyond Pricing Tools?

Revenue management for short-term rentals extends far beyond simply connecting your listings to dynamic pricing software like PriceLabs, Wheelhouse, or Beyond. While these tools provide automated pricing adjustments, comprehensive revenue management involves proactive forecasting, market analysis, and strategic decision-making.

The key distinction lies in the approach. Basic pricing software users often adopt a "set and forget" mentality, letting algorithms run without regular oversight. True revenue management, however, requires continuous monitoring and adjustment. As Henry notes, "Many people set up pricing software and forget about it... I analyze various data points, dissect the information, and offer valuable insights."

Expert revenue management adds several critical value-adds to your short-term rental strategy in 2025:

• Proactive forecasting to anticipate market changes before they impact bookings
• Data analysis that goes beyond surface-level metrics
• Market monitoring to identify emerging trends and opportunities
• Strategic recommendations based on comprehensive market understanding

Essential Metrics and Data Sources for 2025

Success in short-term rental revenue management for 2025 requires monitoring specific KPIs that provide actionable insights. The most critical metrics include:

Occupancy Rates: Year-over-year comparisons reveal market health and booking trends. "Occupancy is the number one metric everyone knows year-over-year. It can also reflect shortening booking windows," Henry explains. Track your 2025 occupancy against both 2024 performance and current market pacing.

Average Daily Rate (ADR) Trends: While occupancy tells you about demand, ADR reveals pricing power. In 2025, many markets are experiencing slight ADR compression, making it crucial to balance rate optimization with occupancy goals.

RevPAR (Revenue per Available Rental): This holistic metric combines occupancy and ADR to show true revenue performance. Henry emphasizes, "The solution to revenue is occupancy, so we might need to take a hit on ADR but aim for the same RevPAR goals by increasing occupancy."

Lead Times and Booking Windows: Understanding how far in advance guests book is essential for forecasting 2025 performance. Many markets are experiencing shorter booking windows, requiring more dynamic pricing strategies.

Successful operators must also look beyond industry-specific data. Key external indicators include:

Consumer Sentiment: This metric provides insights into traveler confidence and spending intentions. "Consumer sentiment... gives insights into people's confidence looking forward," Henry notes. Track monthly consumer confidence reports to anticipate booking trends.

Airline and Travel Trends: Flight bookings serve as leading indicators for vacation rental demand. Henry identifies that"airline trends can be a telltale sign of shifting consumer behavior regarding travel." Monitor airline capacity, route changes, and booking patterns in your market.

Personal Financial Health: In 2025, tracking personal savings rates, debt levels, and disposable income helps predict travel spending. "We have to remember we're selling a product," Henry reminds us, emphasizing the importance of understanding your target demographic's financial situation.

Market Trends and Booking Behavior in 2025

Current Booking Patterns and Volatility

The 2025 short-term rental market exhibits distinct booking patterns that require adaptive revenue management strategies. "For the rest of the summer, I feel people are more hesitant to make decisions. The uncertainty especially affects group bookings," Henry observes.

Key booking trends shaping 2025 include:

• Last-minute booking surge: Smaller units particularly benefit from shortened booking windows
• Group booking hesitancy: Larger properties face challenges as groups struggle to coordinate
• Repeat guest behavior: Monitor returning guests as an early indicator of market shifts

Market-specific variations are significant in 2025. St. Louis exemplifies how regulation can create opportunities, with occupancy up 5% year-to-date as of July 2025 due to supply constraints. Meanwhile, Florida markets show mixed results, with some operators beating market occupancy by 5% through strategic revenue management.

Henry notes a crucial trend: "Most markets are seeing a significant drop in occupancy year-over-year. Some markets, like St. Louis, have had so much regulation that they're having their best year yet because units are falling off."

Assessing Portfolio and Property Health

Evaluating property performance in 2025 requires a multi-faceted approach combining internal and external data analysis. Start with year-over-year internal metrics to establish baseline performance, then layer in market pacing data for context.

When assessing portfolio health, focus on:

• Occupancy pacing versus 2024: Identify properties lagging behind previous year performance
• Market benchmarking: Compare your properties against local competition, not just broad market averages
• Asset type analysis: Different property types perform differently in 2025's evolving market

Henry advises taking market data "with a grain of salt," using trends rather than absolute numbers. For example, if two-bedroom condos in your market show 10% ADR decline year-over-year, adjust expectations accordingly rather than targeting last year's rates.

Demographic targeting becomes increasingly important in 2025. High-quality properties often attract travelers less affected by economic uncertainty, while budget-conscious groups may be shrinking. Understanding your property's target demographic helps inform pricing and marketing strategies.

Advanced Revenue Management Strategies for 2025

Seasonality and Length of Stay Optimization

Optimizing short-term rental income in 2025 requires dynamic adjustment of minimum stay requirements based on seasonality and booking patterns. "Length of stay is a big one—I see portfolios with standardized minimums, like a flat two-week minimum past 90 days, regardless of seasonality or trends," Henry observes.

Effective length of stay strategies for 2025 include:

• Seasonal flexibility: Adjust minimums based on demand patterns specific to each season
• Testing shorter stays: "If length of stay is shortening year-over-year, I might suggest testing shorter minimums in certain months to see if we get more traction"
• Weekend premiums: Implement higher rates for Friday-Saturday stays while allowing shorter midweek bookings

The key is continuous testing and iteration. Allow 2-3 weeks to evaluate the impact of minimum stay adjustments, particularly for dates further in the booking window. Document results to build a data-driven understanding of optimal settings for your specific properties.

Dynamic Pricing and Comp Set Analysis

Successful dynamic pricing for vacation rentals in 2025 requires balancing broad market trends with granular competitive analysis. "It's a mix of both... Overall market trends give a sense of what's happening, while specific comps provide insight into what they're booking at," Henry explains.

Advanced pricing strategies include:

• Risk-based rate adjustments: "Sometimes, I even raise rates last minute if I know a weekend will book out. It's a bit of a risk, but it's worked so far"
• Inventory-based pricing: When only 1-2 units remain in a building, push rates higher
• Quality tier positioning: High-quality properties can often command premium rates even in soft markets

Comp set analysis goes beyond simple rate comparison. Examine competitor amenities, review scores, and listing quality to understand relative positioning. If your property lags behind in bookings, investigate whether competitors offer features like pet-friendliness or better photos that give them an edge.

Addressing Underperformance: Reviews, Amenities, and Listing Quality

Property underperformance in 2025 often stems from factors beyond pricing. "If a property has a poor review, people are wary to book, which kills your conversion rate," Henry warns. Even aggressive pricing can't overcome fundamental property issues.

Critical factors affecting 2025 booking performance:

• Review scores: Recent negative reviews can devastate bookings regardless of price
• Guest Favorite badges: "The 'Guest Favorite' badge on Airbnb is huge now—it really affects the algorithm"
• Amenity alignment: Properties lacking popular amenities like pet-friendliness may lose significant booking potential

Henry shares a revealing example: "We noticed that it didn't allow pets and it was one of the only listings in the area that didn't allow pets... on Airbnb, here's the search. There's 600 listings. Here, if you put add pets, it goes down to 200."

Regular photo updates also impact performance. Henry recommends updating listing photos at least annually to maintain visual appeal and showcase any improvements.

Tools, Technology, and Communication Best Practices

Review and Ranking Analysis Tools

Effective review and ranking monitoring in 2025 combines automated tools with manual analysis. While AI tools like Claude can help scrape and analyze listing data, human insight remains crucial for interpreting results.

Key diagnostic approaches include:

• Booking gap analysis: "Another way I identify underperforming listings is by tracking days since the last booking—if it's been 30 days, something's wrong"
• Search ranking monitoring: Check where properties appear in OTA search results
• Conversion rate tracking: Monitor how many views convert to bookings

Henry emphasizes that "sometimes, even if you set the price to zero, a property with bad reviews still won't book." This underscores the importance of addressing fundamental property issues before focusing on pricing optimization.

Stakeholder Communication

Revenue management success in 2025 requires effective communication across multiple stakeholders. "Communication is huge—revenue managers need to translate the right information to the right stakeholders, not just sit in a cave with data," Henry notes.

Tailor your communication approach:

• Operations teams: Focus on high-level market trends and occupancy changes
• Property owners: Provide context for ADR adjustments and market conditions
• Marketing teams: Share insights on booking patterns and demographic shifts

Different stakeholders need different data perspectives. While operations teams need to know that "occupancy's down 10% year-over-year," your internal team requires granular comp analysis to optimize individual properties.

Policy Considerations and Risk Management for 2025

Cancellation Policy Optimization

Short-term rental cancellation policies in 2025 require careful balance between risk management and booking conversion. "It's all about risk tolerance. For large homes, I recommend stricter policies because you want people who intend to stay," Henry advises.

Key considerations for 2025 cancellation policies:

• Market alignment: Research local market standards using tools like AirDNA to ensure competitive positioning
• Property-specific risk: Larger, higher-value properties warrant stricter policies due to greater opportunity cost
• Platform differences: Remember that "strict" on Airbnb equals "flexible" on VRBO

Jamie Lane adds important context: "One policy doesn't fit all. I wish platforms would set date or dollar amount parameters, since risk varies so much." This highlights the need for market-specific policy decisions rather than blanket approaches.

Henry shares a compelling example from a Super Bowl booking worth $80,000: despite the massive reservation, their cancellation policy allowed free cancellation two days before arrival, creating significant stress and requiring proactive guest management to secure the booking.

Economic Downturn Preparedness

Preparing for potential economic challenges in 2025 requires monitoring key indicators and developing contingency strategies. "If cost of living rises compared to take-home pay, that's significant. Sorting by age demographics is useful too," Henry notes.

Critical economic indicators to track:

• Employment data: Jamie emphasizes that if job growth dips below 100,000 per month, "unemployment will likely rise, which could cause market hesitation"
• Consumer behavior shifts: "One leading indicator of a recession is when people start trading down, booking midscale instead of luxury properties"
• Demographic impacts: Different age groups respond differently to economic pressure

Henry provides a specific example: "When student loan payments resumed, I noticed a drop in bookings among 20- to 35-year-olds in Colorado," demonstrating how demographic-specific economic factors impact booking patterns.

Develop strategies for maintaining performance during uncertainty:

• Focus on occupancy over ADR when markets soften
• Target demographics less affected by economic volatility
• Maintain competitive positioning through amenities and quality rather than just price
• Build relationships with repeat guests who provide stable booking base

"Understanding both supply and consumer demographics is key to staying ahead and anticipating market behavior," Henry concludes, emphasizing the importance of comprehensive market analysis for navigating 2025's evolving landscape.

The path forward for revenue management in short-term rentals requires embracing both data-driven insights and market intuition. As Jamie notes, "If people have jobs and are earning more than before, they're going to keep traveling." This fundamental truth, combined with sophisticated revenue management strategies, positions savvy operators for success in 2025's dynamic market.