VRM Intel’s Data and Revenue Management Conference was the first of its kind in the vacation rental industry. Over the course of two days, experts and vendors in the space discussed revenue management principles, data tools, and pricing strategies. These conversations proved that there is a huge appetite for data and improved revenue management practices. We want to share our major takeaways from the conference.
Vacation Rentals vs. Hotels
When it comes to revenue management, the vacation rental industry is a few decades behind hotels. While we can learn a lot from hotel revenue managers, there are some major differences between the two accommodation styles. These differences create the need to track and make decisions off of a different set of Key Performance Indicators. Occupancy in the vacation rental industry has to account for owner stays and RevPAR is based on diverse rentals – not uniform hotel rooms. Vacation rental managers also deal with a fluctuating number of units, as well as other factors like dynamic booking windows. There is an evident need to define a clear set of performance indicators for vacation rentals and educate the vacation rental managers on their importance.
Pricing and Algorithms
Dynamic pricing is a growing trend in the industry. Companies are no longer just setting prices once a year and publishing them in a brochure – most companies will adjust properties on a daily basis in response to changes in supply and demand. A number of software companies are aimed at making that process easier and more data-driven, many of which are based on algorithms that can automatically recommend prices. Conference conversations around pricing culminated in the understanding that although they are advancing, there is not enough confidence in algorithms to use automated pricing tools to “set it and forget it.” A level of human oversight is still required when using these pricing programs.
Scraped vs. Direct Data
Many sessions focused on the differences between scraped data (from AirBNB and VRBO) and data pulled directly from property management systems. They both have their uses: scraped data can be a great indicator of supply in a market and direct data is better to understand real reservations (or demand). Ultimately, direct data is less susceptible to manipulation and should be relied on to make important decisions. The industry is certainly facing the “quality versus quantity” issue when it comes to data.
As the industry advances rapidly, Key Data is committed to helping vacation rental managers make data-driven revenue management decisions and providing a trustworthy competitive dataset in all of the major leisure markets.