Boosting & Managing Your Revenue Successfully

Hey everyone. Today we're talking about revenue and tips and shares on how you can get more of that revenue and how important it is to be managing that revenue. So you're listening to the Boostly podcast. If this is your first time here, this is the podcast that gives hosts the tools, the tactics, the training, and most of all the confidence on how you can go out here and get more direct bookings. My name is Liam Carolan and Mark Simpson's co host and this is the Spotlight series. So this is where we bring in a special guest and we really shine the Boostie spotlight onto that guest and their business and their businesses that you, if you're in short term rental, you need to know about these people and they've got awesome stories to share. So today we've got Jordan Locke. Jordan Locke, you can go and check out the business@revpartyconsulting.com and that's what we're, we're talking about today. So welcome along Jordan. Thank you for joining us.

Hey, thanks for having me.

So Jordan, just take us through and introduce the business yourself. So tell us a little bit more. What is RevParty Consulting?

Yeah, so RevParty Consulting is a revenue management and data analytics consulting firm. We really started in revenue management data analytics and now we kind of touch anything that has to do with revenue and revenue optimization because the problem is just so complex and has so many layers. So we tend to help. It can be smaller hosts, it can be larger portfolios. With the revenue management, we do everything from small project based engagements that last a couple weeks or a couple months where we help get in, get out and we do a third party revenue management as well. So completely outsourced. So regardless of where you're at on your revenue journey or how your company is structured, we work with all sorts of people to help them make more revenue and save time.

That's cool. I mean, there's two things which people want. They want to save time, they want more money. So this is helpful. Is there different stages that you see where hosts are at? Is there like stages where you can kind of box people in and go, do you know what this, this person's in this stage, this person's at this stage. Do you tend to find that or is it just more of a free for all?

No, I think people do kind of follow specific steps in their revenue management journey, kind of influenced by their past experience a little bit. But generally you'll have hosts that are just starting out and they do some research into kind of the basics behind pricing and revenue management, they start determining when their high season and low season is maybe where some of those compression dates are and big events, right. And they're kind of scratching the surface. Usually after that, people do a little more research. They want to be a little more involved. And that's typically when they start using tools. Right. So they'll use the Price Labs wheelhouse beyond and really try to automate that. And that's either to save time while they revenue manage or to revenue manage in more detail. And then the third step is either you've gotten so big you're building out a team in house, or you're really starting to see the ROI on revenue management and you want to go to the next level. And that's typically kind of where revparty comes in. And so that's when we help by taking over revenue management or helping them level up their strategy and tactics, or maybe deep diving on some sort of survey or analysis that they haven't done before. That just unlocks new opportunities. And so usually in that third bucket is where we start working with most of our clients.

What mistakes do you see happen many times for hosts?

I think one of the mistakes people make, especially early on in their journey, is thinking that it's just way too complicated to really grasp and start taking action on. And it's true. There's lots of math and science and experience and just tons of stuff that goes into revenue management. Right. That's why I do it full time. But essentially, people are really good at picking up patterns and drawing conclusions from those patterns. And so even if you're not a numbers person necessarily, or a full time revenue manager, if you start looking at your trends and patterns, you see in your own booking data and start drawing conclusions from that, a lot of times you can make really small tweaks really early on that have a huge revenue impact. And I think the second thing that I see all the time, no matter where people are at in their revenue management journey, is people tend to think that during high season, high demand season, when lots of revenues coming in, like, that's when you really have to focus up on revenue management. And I would say the opposite is true. I think, you know, a really good revenue management strategy, a really good revenue manager really makes you more money in that slow season or when the market has low occupancy or low demand, because the market tends to compress and kind of equalize in periods of high demand. So a revenue manager is important during times when it's well, but they're Even more important, when times are rough, what.

Would you say to somebody who doesn't know if they need a revenue manager?

I would say the first thing is probably size. And that's the same thing that really goes into any aspect of short term rentals or vacation rentals. Right. As you scale, some things are easy to kind of outsource or systemize and some aren't. And revenue management is very much the same way. So usually you want to see 10 to 20 properties at least before you super, super deep dive into revenue management because that's when you'll start to see the return.

And are there any figures like, I mean there's, there's some ones which come to mind for, for me, but I want to check that my thinking is, is right. Are there certain figures when it comes down to revenue management that everybody should just be paying attention to and if so, what, what are they and why?

Yes. So RevPAR is when you'll hear a lot of times, right, we've incorporated into our name, it's so important. It's probably the most sound metric that incorporates revenue, occupancy and rate all into one. So you definitely need to pay attention to that. At RevParty, we really focus on indexing RevPAR. So that's taking your portfolio's revpar and comparing it to your market or comp set RevPAR and that's because that controls for market fluctuations like increasing supply and demand, inflation, all the big things you probably can't control. And so we use the indexing a lot to incorporate that and really tell if we're improving our revenue management or if it's getting worse, even if the market's going up or down no matter what.

And just for those, there's going to be a lot of people who listen to the boosted podcast, some, you know, sort of a big property managers, some are just getting started. Can you. In the most simple terms, what, what is revpar in General?

Yeah. So RevPAR stands for Revenue, revenue per available room. You can hear it multiple different ways as rev pan, rev, pal. Sometimes owner nights are included as long as they're not. So it's really important you check the definitions in this industry so far. But essentially it's your occupancy of four time period times your average rate for that same time period. And so what that does is we know just from general economics in high school, as price goes up, your demand is likely going to go down and there's a trade off there. And what we want to determine is given that trade off, where's kind of the best landing spot. And so what Revpar does is it incorporates that how much you sell the occupancy times the rate, which is your price and it lets you know is that trade off improving your revenue performance or not?

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The nice thing is about Revpar, I mean I certainly use it in, in my business is it helps you to really compare one unit against another and it really makes you understand why, especially as short term rental managers, that's quite handy having higher quality larger homes because it just makes such a difference to, to your bottom line. For each unit of effort almost, you know, you're just making a bigger return a lot of the time. At least that's, that's my understanding of it.

And then I think, I think Revpar also allows you to compare multiple things your business on kind of the same basis. Right. So when I've worked with portfolios and been more operationally involved, you have things to do with like owner block nights and you're blocking for maintenance and improvements. Maybe you had cancellations or you know, a listing went down for a little bit. All of these things influence your revenue and what you can sell. And you can break all of that down on a Revpar basis as well. And then you know exactly what's calling your causing your leakage and really where you can improve and see the revenue improvement really easily.

And does RevParty Consulting help with. I mean seasonality is such a big thing in STR especially, you know, there'll be some hosts listening to this where they're very seasonal properties. One of the things, and I've made this mistake myself which is I see revenue coming in in the summer and I'm like ah, times are great. This is fantastic. And then in the winter I'm like banging my head just going oh God, what can we do to get more, more revenue? And after reading there's a great book by Mike McCallowitz called Profit First I, I now am very much like put money aside, make sure I do this. And that's got rid of it to a degree. But I'm sure there's going to be a lot of people and, and for everyone listening, go and check out that book Profit first. But I'm gonna, I'm sure there's gonna be a lot of people who don't necessarily understand the, the importance of budgeting for that. Does Rove par consulting help with that side of things?

So we definitely can. I feel that revenue recognition is always something people are dealing with in this industry because of the various OTAs and locations. How your accounting works might vary but you know, we do a very bottoms up approach and so lots of times we do revenue forecast and projections and we're incorporating that. We're looking at when does the cash flow come in, where should you expect it, how do you budget for that on an annual basis? So you know that's, that's more on the side of not so much of how do I make more revenue but like when is it coming in and how do I use it? And so we help with, with that too. What we found is just revenue touches so many buckets. There's really lots of ways to help and lots of way to use that information. And so we really expand and kind of touch it all.

And how did this concept come about, Jordan, if you don't mind me asking, what did you do before this and how did revparty consulting come. Come around? You know, how did it, how did it form?

Yeah, for sure. It's not the, not the smoothest story, I would say so you know, way back in the day I served time in the army, I got out, finished my degree and then after that I went to economic consulting which was for multi million dollar court cases, people suing each other over oil, gas, ip. And so that really exposed me to kind of commercial strategy and pricing. I did oil and gas, I did processing chips, I did toilet O rings, I did water balloons, tons of commercial experiments there. And then after that I kind of stayed in pricing. So then I went to Amazon and Whole Foods and helped with their complete repricing. And then I went to a VC backed startup in short term rentals and founded their revenue management program. And so that's really what opened up this whole vacation rental revenue management area of expertise. I think at the time beyond price Labs wheelhouse weren't as popular, weren't as developed. And so a lot of this stuff we were completely making up and building in house also was A startup. Right. So you wear lots of hats. So it wasn't just, how can I project revenue better? It's can I use this to also project housekeeping schedules so we can save money and not burn as much cash? So, yeah, that's really what got me started in vacation rentals. And after that, I realized there was just a huge gap of knowledge at the time and lots of people, you know, could really benefit from this. Even if you see a 2% increase, you know, in revenue and you have a large portfolio, that's a lot of money, that takes a lot of time for people to do. And so, like, we've seen really good revenue improvement from this. So typically, people, when they use a tool, they'll see about a 20% lift in revenue if they weren't doing anything before. All the clients we've worked with that were using a dynamic pricing tool, they typically see at least a 25% increase in revenue after that. And so you really do see just monumental jumps as people go along their journey.

Nice. Nice. And I was going to touch on these tools, which, of course, you've got Air DNA, you've got Price labs, you've got Wheelhouse, you've got Beyond Pricing. There's so many of these tools out there. And this. If this is the first time you're listening to a podcast like this and you're wondering what to do with pricing, then definitely go and check out some of these. These tools out there. But am I right in saying. So where you come in and your. Your company comes in is actually to just get the very best out of not only that tool, but just so people understand their revenue throughout their business and how they should be thinking about pricing. Is that right?

Right. It's bringing it all together into a cohesive strategy. So one of the areas where tools lack now, and it's hard to do because it's complicated, is really incorporating other aspects of revenue management that aren't necessarily rates and availability to an overall strategy. So whether you're looking at, like, marketing, spend and PPC or promotions or email campaigns, or redoing your website to drive direct bookings. Right. All these things happen and influence your revenue, but are really hard to account for in a very specific tool. And then also, everybody's business is really different. Right. We're in different locations with different sorts of properties and different sorts of target guests. It's really hard to incorporate that and plug that into a software as well. And so what we do is really take those things to build a comprehensive strategy and apply it in these different rate tools as well as just help with these other facets as well. So can we help you improve your marketing? Can we make that towards your target guests? That's currently a hole in your revenue management tool. Right. Bringing it all together and making it multifaceted is really where we shine.

That's cool. That's really cool. And ultimately you mentioned direct bookings there, so I've got to pick up on it. Obviously, the Bruce Lee, Bruce Lee podcast, obviously it's one of the main ways that you can drive more revenue. And actually I was speaking to somebody earlier on about websites and they said, well, obviously there's a cost to websites, hosting and all that stuff. Well, I always say to people, yes, there is. And you've got to build that into your, into your business. You've got to build that as part of the costs of it and then work out if you're, if you was to take say 15, 20% more direct bookings and you're at a higher income, you can push up your average daily rate because instead of that money going to Airbnb, you're actually getting it direct. And that way you're actually able to not only cover the cost, but also obviously make more on the bottom line, which is just, just so important. And just anything that helps people understand revenue in general is just so important. And it's something which hand up. I didn't really look at the numbers at all for the first 12 months because I was too busy looking after guests, learning software, learning how to host all the stuff that people are busy with. But certainly as companies grow, I mean, my company at the moment, my short term rental company, is now on about 22 units. And it is that time that you don't always get. So even if you've got all the gear, what do they say? All the gear and no idea. Even if you've got all the gear, you need to know how to use it, not just, not just plug it in and hope that it sorts itself out. And yeah, I can definitely get that.

I would just say, like with direct bookings too, it's one of those things where people aren't always sure when to invest in it or not. And that's something we can help with too. So we're looking at your different distribution channels, right, and where your business and bookings are coming from. And we're looking at those, that commission or that cost of acquisition. What's your marketing spend? And so we can kind of get down to a net revpar. That's you know after the cost of goods sold and really determine the value you're seeing from each of your channels, even at different points in the booking window. And so that's just one more layer of strategy you can add on. How hard are you going to target your direct bookings? How much are you going to spend on it, what's your ROI from converting them? And all of those things matter and usually get better as you scale. So that's something we help with as well.

I love that, I love that. And I have talked to a lot of people who's got these great big email lists and they're paying money, you know, each month. And I go, what was the last email you sent? And we go, where we haven't sent one. And you're just like, well that's, that's a complete loss on that, that revenue. So it's just so important to make a return on every bit of spend, isn't it?

If you're struggling on how to get direct bookings and overwhelmed on where to start, then I recommend you go and book in a call with Boostly and our team right now. We can walk you through exactly what we're offering, how we can help you and give you a portfolio of websites that we have worked with that are matching not only your niche, but could be in your location as well. Boostly has helped over 2000 hospitality businesses all over the world increase their direct bookings. And if you are interested, then all you need to do is go to boostly. B o-ostly.co.uk call and booking an appointment with one of our sales team.

What would you say has been your biggest wow moment as part of Revparty Consultant so far?

My biggest wow moment? I think you just. We've had an opportunity to work with lots of different companies and portfolios in really unique places and really just able to customize solutions to a point where like each problem is interesting. So everything's not super cookie cutter. You know, maybe the way that a large, a software company might like it. We have a more customized bespoke approach, but what it means is we help people that are just starting out how to launch properties. We've helped people in different areas that have had legislative changes that happen in their market and so they had to change their entire approach to how they're taking bookings. So we really just see ultra luxury. We've seen, we've seen, you know, str. Multifamily. So every, every company is kind of unique and every owner or manager is unique as well. And so combining those two, it just always stays fresh.

That's cool. And how does it work? So let's say there's somebody out there listening to this who goes, do you know what? I'm in that situation where I just want to get a better grip on my revenue management. Did you say between 10 or upwards of 10 properties? Is that the preferred?

Yeah, I would say at least 10.

At least 10, yeah. So they're in the situation, say they've got 25 properties, they're sitting there going, you know what, I've just haven't got time to be looking at. I think I can make a little bit more per, you know, per property. What is the steps for them? What do they need to do?

Yeah, so all they have to do is reach out to us via email or on our website. After that we typically have one to a few discovery calls. So we sit down and really uncover kind of challenges, opportunities and objectives to make sure it's a good fit and we're really aligned. And then from there usually we do a smaller kind of project based engagement before we open it up. So a lot of times it's kind of a pricing tool audit or really quick data analysis so we can look at the KPIs and see what are the low hanging fruit and really optimize those cheaply and quickly. And then from there that's when you start doing some more of the complicated stuff where it's a deeper dive on strategy. Maybe that's managing your rates daily and saving you time or maybe that's doing like conjoint analysis or something really specific. But yeah, so we typically start just by getting to know you. And then it's usually a really easy kind of let's get the low hanging fruit engagement to make sure everybody gets their money as quick as possible. And then after that that's kind of when all the, the nuances and cherries on top happen.

That's cool. That's cool. And do you ever find that there's hosts? I mean, I know a lot of hosts around that sort of level. Do you ever find hosts just don't track or don't have a very good back office for that sort of stuff? Is.

Yeah, it happens all the time. And so I'd say, you know, sometimes we take on new clients, they become long term clients. A lot of times we focus on tracking the right things early on just because if you don't have the data or you don't know what you were doing, it's really hard to know what changes you need, um, so a lot of times we start off with like these, these are things we need to start tracking if we want to improve. Also, everybody kind of has their own opinion on revenue management. I think it's one of those jobs where you're exposed enough to it to have an opinion, but maybe you don't have all the technical chops to do it. I think it's. The chefs are the same way, right? You go to a restaurant, everybody has an opinion on food, including myself. I would be horrible at running a restaurant and you don't want me to do so. So I think revenue management is kind of in that bucket. So you make you, you meet lots of people that know their market or they've had experience with their house that has been successful and all its valid experience, but maybe they haven't seen thousands and thousands of properties over and over again. And so I think a lot of it is educational and trying to get people to that point where they understand the levers, you have the impact that those levers have and then getting on the same page to really drive like team revenue.

I think it's so important as well because a lot of people feel worried or that they're not keeping up with their, you know, peers and stuff like that. So ultimately everybody's in a different, different situation. Reach out, you know, to, to Jordan and to find out how his company can help you and also just get a grip on revenue in general. Because I know so many, so many hosts who are so focused on scaling that they're not actually looking at the numbers as they're scaling. You know, like, and this, it's a. You don't want to get so big and you fall over because the numbers aren't working at the, the back end. So such a good, good topic to discuss. So Jordan, as, as we get through these, we love to just do a couple of light hearted, fun questions before we find out your details and how we can get in touch. You mentioned their food, restaurants. Where would be your top place to go out for dining? Where would you always go? Where's your sort of guilty pleasure?

My current favorite restaurant in Austin is Hestia. Been open for a little over a year and a half now, but it's all open fire cooking that happens on earth. You know, really high culinary presentation. Just really good, like soulful food. That's definitely my favorite right now.

Nice. I love it. I love it. So your line of work is, is quite complex. Most people would say, how do your relatives describe what you do?

This is a Little easier than some of the past jobs I've had, to be honest, to explain. So I think what they say is I set the prices for vacation rentals. If you're booking on VRBO or Airbnb, that's probably how they describe it. It's a lot easier to describe than when I did this for court cases or when I was working in mail. So I'm pretty happy right now with the explainability of the job, comparatively.

That's cool. That's cool. It's one of them things where it's easier to just go, yep, that's. That's what I do is, you know, to relatives sometimes. If you could swap places with a character in a TV show that you've watched, which character would that be and why?

Oof. Wonder what I switch places with. I think a character I'm most like is Bob from Bob's Burgers. My brother actually gives me a hard time all the time because literally some of the stuff he says or interests he has are things that I said the week previous. So if you need to picture me in my everyday life, Bob's Burgers is a great place to start.

Nice, Nice. I've not actually watched it. I'm one of the people and I'm sure people will be going, what? You've not seen it, but I know good. Three friends of mine are like, you need to see that. That is an awesome show. And before we just ask how we can get in touch, is there a mantra or a saying that really resonates with you, or one that, you know, you kind of have heard and you go, do you know what? That always sticks in my mind, this one. Which one? Which I really mean something to you?

I think, you know, a question we get a lot is, how do I become a better revenue manager? And that's hard if you're just starting out, or it's hard if maybe you're not going to be a full time revenue manager, but you still need some of those skills. And I think, like, the biggest piece of advice you could have is just to ask why. For everything that you do, just ask why. Most people in this business are pretty smart. Maybe they've been successful elsewhere. Lots of people in this industry are very capable of lots of things. Things. And so I think if, if you just sit down and ask why, maybe, why did bookings come in late? Why did I see cancellations? Why did I make less money? You can just follow kind of the, the rabbit hole and you'll probably come out with some pretty decent insights. And so I think just starting by asking why is going to lead to a lot of improvement for a lot of people's financial results.

I really like that and I'm going to take that into my business. I mean, we can all look at the trends, we can look at the things that happen day to day and really dig down to the under cause of it. So I'm going to throw the mic open. Jordan, how can we get in touch? What's the best way to do. So where can we come and follow you?

Sure, you can go to www.revpartyconsulting.com. there we have all of our available services as well as ways to get in contact with us and some educational material you can find us. We're very active on LinkedIn and post slots, not so much so on Instagram and Facebook, but it is out there. But primarily LinkedIn and our website, that's where you'll see most of our educational content.

That's cool. That's cool. And thank you for sharing this. I mean, it's definitely. I didn't know what to expect. Obviously it's the first time we've met each other, but it really does get you thinking about revenue in general, the things that you can do. And yeah, thank you for sharing your story and your time with us. So everybody listening to this, thank you for, for listening in on this. I know there's a lot of places you can put your attention. I really thank you for, for putting it with us here at Boostly. If there's somebody you know who can get some value from this podcast, please do like it, share it and you know, bring more people to the Boostly channel. Jordan, was there anything we missed along the way before we bring it to a close?

No, I think we hit on most of it. I think when you're looking at revenue management, you're either trying to make more money or save more time or both. So if any of those things seem appealing to you, you probably have room to grow in that area and it's probably at least partially revenue related. So, you know, please reach out. We're happy to help.

Nice way to bring it to a close. Thank you very much for your time today, Jordan.

Thank you.