Achieving success in the short-term rental market hinges on many different factors, many of which we have touched on in past in PWD Academy lessons. But, how will you know when you've achieved success?
Measuring the success of an STR or Boutique Hotel requires a keen understanding of specific performance metrics.
These metrics are crucial for monitoring your property's achievements, and driving improvements in profitability, efficiency, and guest satisfaction. By tracking these numbers, you can also gauge the effectiveness of various strategies, such as design revamps (a Pink Wall Designs specialty).
For instance, consider these metrics we gathered from two recent Pink Wall Designs projects:
Note: These insights can be easily accessed using tools like PriceLabs and AirDNA.
Keep reading to discover more essential metrics that Pink Wall Designs relies on to optimize short-term rental performance—metrics that every STR owner should be tracking.
Essential STR Metrics
1. Occupancy Rate:
Definition: The percentage of booked nights compared to available nights.
Calculation: (Total booked nights / Total available nights) x 100
Importance: Indicates property utilization and helps in revenue forecasting.
2. Average Daily Rate (ADR):
Definition: The average income earned per occupied room per day.
Calculation: Total revenue / Number of occupied nights
Importance: Helps assess pricing strategies and revenue potential.
3. Revenue Per Available Room (RevPAR):
Definition: Revenue generated per available room per day.
Calculation: ADR x Occupancy Rate
Importance: Provides a comprehensive measure of overall performance.
4. Booking Lead Time:
Definition: The average number of days between booking and check-in.
Calculation: Sum of days between booking and check-in / Total number of bookings
Importance: Helps in planning promotions and pricing adjustments.
5. Guest Acquisition Cost:
Definition: The cost associated with acquiring each booking.
Calculation: Total marketing and advertising expenses / Number of bookings
Importance: Measures marketing efficiency and helps optimize budget allocation.
6. Cancellation Rate:
Definition: The percentage of bookings canceled out of total bookings.Calculation: (Total canceled bookings / Total bookings) x 100
Importance: High cancellation rates can indicate issues with policies or guest satisfaction.
|
If you're noticing a high cancellation rate, it may be time to consider a redesign of your property, or you may choose to focus on one room to get a new hero photo for your listing, and take a closer look at the amenities you’re offering. For additional tips on how to succeed in the short-term rental and boutique hotel world, check out these blog posts: |
7. Length of Stay (LOS):
Definition: The average duration of guest stays.
Calculation: Total number of nights stayed / Total number of bookings
Importance: Helps in tailoring marketing efforts and maximizing occupancy.
8. Cleanliness Score:
Definition: Average rating given by guests for property cleanliness.
Calculation: Sum of cleanliness ratings / Total number of ratings
Importance: Directly impacts guest satisfaction and future bookings.
9. Direct Booking Ratio:
Definition: The percentage of bookings made directly through your website or contact.
Calculation: (Direct bookings / Total bookings) x 100
Importance: Reducing reliance on third-party platforms can save on fees and build guest loyalty.
|
Not getting direct bookings? There are tools that can help you with this! For more on this, read: Get Direct Bookings and Save on Airbnb Fees! |
10. Repeat Guest Ratio:
Definition: The percentage of guests who have stayed at your property more than once.Calculation: (Repeat guests / Total guests) x 100
Importance: Indicates guest satisfaction and loyalty.
Conclusion
Monitoring these key metrics provides valuable insights into your STR’s performance. Feeling overwhelmed? Start with the ones we’ve highlighted, and gradually add on to get a clearer picture of your STR’s health!
Use this data to make informed decisions, improve guest experience, and maximize profitability.
Looking for Tips on How to Boost Your ADR and ROI?Follow @PinkWallDesigns on Instagram, and tune into our “Level up your Listing” series. Plus, Join The Pink Wall Designs Academy for more tips and tricks, delivered straight to your inbox on a quarterly basis! |
Looking for more?
Book a complimentary consultation with Pink Wall Designs to discuss specifics about how we can enhance your property and boost your STR success with our design services.