E.O. Strategy Flashcards
How do you create a competitive market set?
Use pricelabs Market Dashboards and identify the properties that are identical or at least comparable to your own using their comp set feature.
What is the difference between the 25th, 50th and 75th percentile?
This describes the range of prices being advertised (not necessarily booked) in the comp set from the low end through the average (50th) to the higher end (75th). Note that there is also a 90th percentile which is the absolute top end of prices in the market.
What do we do with the market data we collect?
Look for flaws in the market. Find opportunities to be exploited. Identify which tactics would best apply for success.
What is variable minimum night stay?
Filling your calendar with longer more lucrative bookings further out, then filling in the gaps with smaller bookings in between, within the context of the average booking window & minimum stays for your market
What is an orphan night policy
Allows bookings for gaps between two other reservations that would normally be unavailable due to minimum night stay settings
What is occupancy based pricing?
Charging different prices for different sized groups. Particularly effective in large homes in lower demand locations. Can be counterproductive, use with caution.
Why can occupancy based pricing be counterproductive?
Opportunity cost. Every time that you take a booking for a lower guest count, where you could have been booked at full capacity, you’re leaving money on the table.
What is the E.O. Strategy?
To get booked at the highest nightly rate possible as consistently as possible.
What is the ‘Pricing Sweet Spot’?
Charging the most you can, in alignment with the market demand without pricing so high that you don’t get booked, or have to heavily discount last minute to fill vacancies.
Why is it bad to be booked out ahead of the market?
You’re charging too low. The cheapest options get snapped up first, if your listing is booked first, you’re too cheap.
What does it mean if you’re only getting last minute bookings?
Depending on your market, if they get booked further out but you don’t, that is an indication that your prices are too high further in advance. In nearly every case, you would be better off reducing prices for those further out dates to gain more bookings.
When is it a good idea to get booked out AFTER the market average booking lead time?
When everyone else is already getting booked out. We know that supply will be low (we expect very high market occupancy) but demand will still be high and we can get booked at an absolute premium.
What are the 3 steps in the 3 step pricing plan?
Hedge, control, test
What is your control price?
Assuming you’re already getting booked, this will be your average booking price during LOW SEASON. For a new listing, this is a price point we are conservatively confident will be booked. We know it works, so we don’t want to mess with it. This is where the majority of bookings should be produced.
What is your Test price?
Charging higher further out to see how far we can push our pricing ceiling.
