Utilizing Dynamic Pricing for Competitive Prices

Welcome back to a very special episode of the Boostly podcast. In this episode what we're going to do is we are going to fine tune and we are going to optimize a host of Boostly, a client of Boostly, a Boostly team members, Price Labs and Dynamic pricing. Live with the founder, one of the co founders of Price Labs, Anurag Verma. Anurag, if you don't know, he's one of the co authors of the book Die Blueprint, one of the co founders of Price Labs and has a fantastic product and we've been working with Cuny Perez based in Orlando and over the course of this year we've been optimizing everything about the business for direct bookings but most importantly to get it bookings. Because when we first came in the bookings were brassic. There was not many bookings. It just started up last November. January is a bit bad but now thankful to say the property's getting full. Now the property is getting full but there's a reason why and it's not because of the amazing property and not because of the amazing listings but because of how the pricing was set up. And you can argue now because he was ahead of the market, the pricing was too low. So by optimizing Price Labs and by putting in some some rule places and we're going to get this optimized live with the founder of Price Labs we're able to pinpoint some unique things that we can do. We've implemented them and I'm going to be really excited to check back and report back on this later on in the year to show the benefits of this. So without further ado, let me flip the screen. This is a zoom call between me and Mr. Verma of Price Labs. Thank you very much again anorak for doing this and do go check out Price Labs P R I C E L A B S. I'll leave the logo up here. Go and check it out and make sure that you are optimizing your dynamic pricing for more profit.

Quick break from the podcast to let you know that the two Boostly books that we brought out, the Book Direct Playbook and the Book Direct Blueprint are two of the top rated and the best selling in the hospitality category on Amazon for just two pounds. You can grab both of those books right now. The foundations and the structures that you need to put in place is in the blueprint and then for 101 marketing tactics that is in the Playbook. So go and grab a copy on Amazon now just type in Book Direct Playbook or the Book Direct Blueprint. And we'll see you on the other side.

Okay, Andrex, so thank you very much for doing this. We're obviously looking at Escape bookings and Keeney's account here to try and see if we can tweak any additional revenue per booking because obviously Orlando the there's a lot of properties down there. It's a very up and down market and in the past Kearney's just had a set rate and obviously when you have a set right, you miss out on such potential revenue that you could have. So yeah, excited to dig into this. Thank you for doing it and I'll pass on to yourself and let's see what we can unearth with all this juicy data.

Awesome. Yeah, thank you so much for sharing. Sharing this and getting me on your mark. But getting into this. So this is what QNews would probably see when he logs in any day to Price labs. Right. When I look at this account and his property, just without even getting into the details, just looking at some basic settings, the minimum price and the base price, and some performance metrics, there is one thing that clearly jumps out to me. So two things are happening. His minimum price is 239. He's saying never go below 239. He's in some ways set that as his operational minimum price. And then the base price, he's set it as like three bucks more than the minimum price. Now base price is sort of, we think of it as on average across the year, across the highs, across the lows, how much would you want to sell at right now if Your base is 242, it means that during low season and during low demand periods we would try to go lower, but there's not really much room left here. Right. So generally speaking we say there should be at least 10 to 15% difference between these two numbers. Right? So one of these two numbers has to move. It's either 239 has to go lower or 242 has to go higher. Now which one should move becomes is the question. And in this case it's very easy for me to see. And that's because if I look at his seven day occupancy, it's sitting at 100% comfortably beating the market. 30 day, 30 day occupancy is like in the upcoming 30 days, how much are you booked? How much is the market booked? Again, comfortably beating the market. And next 60 day occupancy, again comfortably beating the market. So like there is room in the base price to go a little bit higher because he's doing well. He's like. And this is sometimes like this one. Comfortably within the market is what you want to see. There are plenty of markets which where the occupancy in the next 30 days is not in the next seven days. There's 40%. And you don't want to be like 45%. Yes, you're beating the market, but not by much. And there's plenty of room. I would rather be twice as booked rather than be 45% booked. As long as it's coming at a good price. It shouldn't be that to be 2x occupied. You're cutting your price by a third and making less money in return. But if all three numbers are comfortably beating the market, then I generally say, okay, there's room here to bump it up. We'll see some of that when we dig into the details. So let's go into the property itself. And these are the settings that we talked about, like the minimum price and the base price. And if I click over at help me choose the base price. Let's see what it says. What you'll see here is it's saying that we are recommending that the base price be 253. So we are asking like a 5% bump. So not the 10, 15% that I had hoped for. But you're saying, hey, you're performing well enough that you can try bumping the price a little bit up. And then what's happening here that we are basically saying, you're booking better than the market. And we generate these recommendations every, like every week. We are looking at your property and seeing how it's performing and saying, do you need the base price to be higher or lower? Base price for anyone who hasn't been into price labs is sort of the key starting point in some ways, which is reflective of the listings. How good the listing is. Pretty much that. And I've chosen the words very carefully here. I'm saying how good the listing is and not how good the property is. Because you could have a great property. And if the pictures are bad, if the copy is bad, if the title is bad and it's not getting booked, then it's a poor listing. And what gets booked by people online is the listing. People stay at the property, people book the listing. Right. So the property doesn't change over time, but the listing description might improve and then that might be part of it. Right? Like that over time, maybe this base price of 242 was fine. But as your property gets more, as your listing gets more reviews, as your listing gets more, you improve the copy, you improve things. It will start performing better. And as it starts, as it performs better, our system recognizes that and says, hey, look for the same property. Now you're doing better. You should be able to raise prices given how well you're doing. So that base price is an essential starting point for us to say. We recommend one. We show you what the market is starting. So market, surprisingly, is very close to what, five and six bedrooms in the Location app. This is what he must have chosen in his account already to say, this is what I compete against. And again, he's saying he's an upscale property. So he has picked these filters and said, okay, market is at 238 and he picked 242. Now we are saying you can go even higher. You're doing well, essentially. So that's one. Now, the reason it becomes important is this listing is in. This property is in Orlando, a little bit from Orlando, but the Orlando area. And you'll see that for spring break, generally speaking, the prices, like the base price is 242. But most of the spring break, like March, is booked. A turn of April is also booked. A lot of the midweek in here is sitting at that 239. It's sitting at that minimum price. And the minimum price, at least for us, is sort of a threshold. It says our algorithm might be recommending going a little further down. But you said 239. You're going to stick to 239 and you'll see that. What seems to be happening crazily enough is a lot of the dates that are unbooked are sitting at that 2:39. So you said it's the base price a little. I'm sorry, the minimum price a little bit. There might be a little more activity on those dates that are going unbooked. So there might be something to play there as well.

Question I have is with the base price, obviously that's a recommended one, but he has to come into here, come into this piece to see it and change it. Is there a way with price labs that the base price will always be set to what your recommended price will be? Is there an automated way of doing this?

Not yet, but coming up later this month is. You know how I looked at all of these numbers and said, I think you should increase the base price. And then I went into there. We will start showing you that recommendation right here and tell you that, hey, even if you don't go ahead, go, there'll be an accept button here to say, yeah, just okay, let's do it.

And will that the same thing be there for the minimum price or is that just for the base price?

To start off, we are doing it with the base price, but we also want to do it with a minimum price because they go like so hand in hand.

With this. You said then, sorry, just a very quick minimum price. With this being said, when you went into April, you could very clearly and gently see dates that were available were at the lower price. And you said, well, maybe if we tweak it a little bit lower, just a little bit, it may have a result in booking with something like this. And from what the data is showing you here, what would you say would be a recommended price just to maybe lower it to. Are we talking maybe like a couple of dollars? Like what we sort of say in here when it comes to that minimum?

When we talk about the base price, we have this tool that shows you, like, okay, upscale six bedroom, five bedroom whatnot. Now we are talking about specific dates and for those, if you want to get more intelligence on like what's happening in the market, we generally say let's go to this neighborhood data tab where we give fairly detailed information about what's happening on each date. Pretty much like, how is the market charging on different dates? How is the market priced on different dates and things like that. So let's look at this. So this red line is the occupancy. So like going until sort of mid April, early April, it's pretty solid. And then it starts falling off, right? This is the market occupancy.

Yes.

And if you look at Chiguni's occupancy, even that like these big solid gray blocks are nights that are occupied. So like Till April 16, he's pretty solidly booked. The market is also doing pretty solidly well. And then there are these periods where like things are a little lean and those periods are where the top chart is. Now price, the black line is showing you that the price till April end are pretty high. The prices and then they start going down as the occupancy is going down. But this straight line is when they start hitting that minimum price. We generally tend to say that when the bands that you see behind are sort of the, what are the market prices? So the pink, the light pink is like the higher end prices. The dark pink is sort of a middle band and then the gray one is the lower end. And of course there's there's some other stuff above on each end as well. CUNY is not like singularly higher than everybody else in the market. But what this is showing is we generally say when it is high season, when a lot of things are going to get booked, you want. If you're an upscale property, you want to be up there. But when it is low season or when things are going to be not as booked, you might want to descend into the middle territory. So, like, the. The reason is if 90% of the market is going to get booked or 80% of the market is going to get booked, you can be priced a little higher than you would at a normal time of the year and then still get booked. Everything is going to go off the market, like almost everything. If you're a good enough property with good reviews on your listing, things are fine.

I was going to say in low season.

I was.

Sorry, I was just. Very quickly, I was going to say that if anybody's watching and is worried about that, then there's always a way of getting the price back up per night with upsells. So people like sort of this, they sort of dismiss upsells really quickly and say, well, make a difference. Or, you know, they think, oh, well, you know, if I had an upseller, it's going to be extra revenue. But if you're going 20 less on your normal rate, that will mean you get the booking. And then as soon as they book, you can then say, would you like our upsell of whatever that would be and you can mark it up so you can make that money back.

Yeah. One thing I will say is although those dates are sitting at their minimum, they are also a little farther away. And what might as well happen is as the dates get closer, somebody will book those off. So, like, although I'm saying maybe if you want to proactively book, maybe lower it, there is also some level of risk tolerance associated here to say, like, okay, maybe I'll hold off to the web closer.

So here's the next. And I think I know what you're going to do, but is there a way where we're how many days out now? About a month away, so four weeks away from this. Is there a way that we can. With the lower price, can we reduce the rate? And then the closer it gets to that date, then the price then starts to go back up to its normal base price or the normal price that we keep.

Yeah, there are a couple of things that can be done. Remember, the price is minimum price is 239. Here yeah, what I'm not going to save any of this. But what you could do is you could say, look, let's be okay with 220. Let's say that at 220, if I get a booking, I'm, I'm still profitable. As long as I'm not losing money on a booking, it's okay to take it. Right. But you could say 239 is still sort of some mental threshold or barrier to say, ideally I would want that. Right. Let's say what you can do is. Sorry, you can say if a date is more than two months out, I want that minimum price to be 239. So don't start selling April 2024 at 2:30 just yet, or even May for, for 230. But once the date is within so 60 days, now use my minimum price of 220. So you can create these two tiers in some ways to say my minimum price can change depending on how far out it is. And same thing with prices themselves. Some of these things are automatically being applied like last minute discounts and occupancy adjustments. So there are things that are automatically in place to say if a date is. So suppose these sets of dates stay unbooked as you get closer and closer, what would happen is that these health numbers will start looking, looking worse. And that in itself, like our base price recommendations, want to see those health numbers be bad for a few weeks to say, okay, I should make a change like at the drop of a hat, it's not going to say, let's change your base price like certainly. But what, what we do have is what you. And these are on by default. You can say in the next 15 days, if I'm less than 10% booked for those 15 days, automatically drop the price. They're still going to stick to your minimum price. So like if it's 239 now and it stays unbooked, it's not like it'll go any lower because Your minimum is 239. But if you actually end up changing your minimum to 220, then maybe it'll drop down gradually. There is some benefit to that from an OTA perspective as well because when the prices drop for book dates that have not booked, they start showing with some promotion, things like that as well.

Lovely.

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 O s t l y.co.uk call and book in an appointment with.

One of our sales team. So yeah, so that's fantastic. So basically we can look at those dates and obviously it's saying here that so the days were about 94% which is great, but we ideally know that, you know, these dates here are Sunday to Wednesday. It could be after spring break. But we want to get them to be proactive in getting them, in getting them booked. And if we, if we looked at the market data that we did and we saw that that little line just underneath it was sort of te probably around the 221 mark, like, like we said, 220 mark.

Yeah.

If we drop the price to that, then it may proactively get it booked but we don't want anybody booking that lower price too far out. So if we could change it to say 30 days out, anything booked after 30 days, at least that minimum of whatever it was. But because we want to be proactively booking what could be seen as a slow time, we want to be able to minimum put those dates at that price to get it booked. But as soon as it passes that threshold then we're sort of doing it at that rate.

So let's say you say for whatever reason that these dates, I am absolutely sure this is very low demand. I have seen the data itself not go into book and you say I want to proactively reduce this one. You could go and say, okay, only for this period, make the minimum price too. So you can practically do those things or you can create rules to do those things depending on how far out it is.

Brilliant.

Other thing that was very curious to me, not the right phrase I was very curious about is the fact that there seems to be Thursday, Friday two night reservations here and there are only two back to back. I guess in some ways. But what they mean is that this Saturday night, which generally tend to be in demand, ends up sitting empty here. So I was trying to see what could be done to avoid this. Because by taking a two night reservation here, you have effectively broken down your weekend. Yeah, you have split your weekend now. Right. Like you could have taken a single weekend booking there and now you Don't. And I do see that he has a three night minimum for Fridays and Saturdays. Let's, let's review these settings. Yeah. So what he's done is he said let's do a two night minimum on weekdays. I have three nights on weekends. And then last minute he didn't actually have to create this rule because it's the exact same rule. It's saying men of night is within the last two. Like in the next two days, weekdays should be two and weekends should be three, which is the exact same thing as here. So it's not going to do anything. Most of the times what we generally recommend and actually let's see what we are recommending. This will be fun. So what we actually seem to be recommending, and this is what I kind of knew about Orlando as well. Orlando is a long stay market. Like people come here with their kids to go to Disney or Universal Studios and whatnot and they stay for a long time. So like what, what we seem to be saying is increase your mem stay to much longer and then last minute as dates get closer, that's when you want to start lowering it. So that's something to consider. Like just looking at existing bookings. Just want to see like because on the, on the calendar I'm able to see that. So I don't know if he has blocked the calendar here or if it is booked. I want to see from portfolio analytics what's happening.

Yeah, I'm going to go look.

I want to show like a few different things here. One is the easiest. This is sort of almost to me a no brainer to avoid. This is one of those things where I don't know why OTAs do it the way they do it. Because if you have a minimum stay of three nights here, you would think on Friday that if a booking has to go over Friday it has to be three nights long. But that's not how OTAs work. Now. They used to when like many years back that way but now all they do is they check when the guest is checking in. What's the minimum stay and it's tonight. Sure, two nights are allowed. Right. So although he has set his weekends to be three, these kinds of bookings are possible. So like the first thing I would ask him to do is include Thursday in that three night weekend booking. So instead of having the weekend setting applied to only Fridays and Saturdays, I would say apply it on the Thursday as well. And that would make sure that the minimum right here is three. And that way if anybody's starting A booking on Thursday, they have to book at least on Sunday, check out on Sunday. So you're not splitting your weekend as well, right?

Massively, yeah. For somewhere like Hol as well. That, that's key. It was really interesting that Price Labs is saying a minimum stay of six nights.

Of six nights. Yeah. So I want to dig into that one first. I, I want to see what has Kenny been getting. Right. So like he has been getting. His length of stay that he's been getting has mostly been three to four nights and equal number of nights are booked with a two night stay and five to six night stay and we are looking at total book nights. That's important because if you look at total number of bookings two nights will tower up because even though. So there are probably nine bookings here and there are probably three bookings here. So like if you look at by number of bookings it'll look like yeah, I'm getting a ton of two night bookings but that's not necessarily the right way. You should look at by number of nights. But even then here like the, the recommendation we had was a lot more aggressive than what he has been getting right now. There could be two reasons for this. One is our recommendations are generally based on what do we see in the market. So next I'm going to pull up the market as well and then two CUNY's numbers are going to be impacted by what his settings are. So if he's allowing two and three night settings then he will get those two and three night bookings and as he gets those there is now lesser chance of getting this five and six night workings.

Right.

So but regardless like we are recommending six I would say let's not jump to it. Let's, let's say when it is more than 60 days out, let's keep it five then make it four and then make it three nights. Within you know, 30 or 40 days. Don't completely depart from what you had but make incremental changes and see if they help. Like that's generally our advice in anything. But can we.

Sorry to interrupt but can we see as well from this data what his average lead time is? As in from the point of the book into the point of arrival.

Correct. So There are some KPIs on up up top here and I like, let's see for from Jan all the way to March 10th or let's say April end for all the bookings in that period he has 23 bookings. The average length of stay is 3 points and average lead time is 22. Yeah, 22 days. Right. So. So that's, that's aggregate numbers. Those are helpful, but don't always paint the entire picture. There is this neat section called length of stay in booking window which actually breaks it out. It says, what's the booking window? How many days do you get booked, how far out? And it's saying 20 of your stays booked, 20 of the nights got booked more than 2 to 4. Between 2 to 4 months out. 16. So like it gives you a distribution. It generally tends to say very little stuff happens past minute and very little stuff seems to be happening very far out here in the. Right. In the middle window of like two weeks to four months. Four months, Right. And then same story with length of stay.

And so with that being said, then if we're going to go through the rules and price labs have suggested we would say anything more than 30 days, you would recommend a minimum of six nights, say, and then as soon as it gets to that four weeks, you're gonna then say four nights.

It's. I think it had three nights or something like that.

Yeah. And so eventually when we get into stay restrictions. Yeah. So basically anything more than far out. So anything more than 90 nights, seven nights, anything last minute, and we're including Last minute within 29 nights, it then drops down to free. And we're sort of saying that the Thursday. I think we should. I think I would definitely recommend to him to go for this, like suggest this and then make sure his Thursday is classed as a weekend.

Yeah, I would want to say start a. Like we look at the market data that's suggesting this. But like other things, it's. It's not always like, okay to just go make an extreme change because of this. I would say go with four nights and three nights on the weekdays. Like make that incremental change rather than sort of a big change and then see what that helps with. Right, yeah, that would generally be my recommendation here. Now, looking at market data, I did see if he had created a market dashboard already or not. He has one credit left. I will let him create this one. I pulled out another market for the same area and I was looking at sort of the similar data for the entire region. Let's stick to four to seven bedroom homes to stay comparable to what he has.

Yeah.

Want to get a sense of like those two things, like the lead time and the length of stay, like, are they wildly different? Are they a little different? Like what are they cool in terms of booking window, I think he's Getting bookings right where these numbers are pretty much zero for him. The market does have a little bit there but, but the meat of it is in the same window that is getting so, so, so that's, that's fine. This I did know like the online market gets a ton of these seven to 14, like people book a week or 10 days and just go well.

It makes sense because you know, and again the majority we get every single guest to fill in a Google form. And one of the things we've implemented into the business is, is in the Google form it asks, you know, a couple of questions. The name obviously the email. But we. How many people in your party, what was the deciding factor in why you picked us as your place to stay? And are you celebrating a special occasion? And everybody is saying Magic Kingdom, everybody's saying Disney Spring break, kids birthday. And when you come to do Disney as you know, if anybody's been to Disney, to the Orlando one, it's not small. You need at least three days to even scratch the surface. So for that and then if you throw into like Universal and all the other things, you know, you're talking five days before you've even, you know, got a chance to do anything else. So that window there, that five to 14 days, that makes a ton of sense to me. Yeah.

So that, that might be why our recommendation was like do six. There's plenty of six night demand that you'll still fill up your calendar with that.

Yeah.

Again not something that like this is true with anything like even price wise. We generally say if you have been running something and running it well, you don't want to like jump to a completely new setting. You want to slowly get there. So like try see if it helps or not. So which is why I'm saying like don't jump to six, go to four. Like make it a four night minimum outside of 30 nights, three night within and see what starts happening.

Yeah, I mean the main thing for him, I think you hit an L on the head. Make Thursday your weekend, the start of your weekend.

That, yeah, that's a no brainer.

I think go anything more than 30 days out, make it minimum stay at four nights. Because again if there's only one property, right, and I say this a lot, when you've got one property and say that your minimum stay is seven nights, you've only got 50 bookings in a year to take but take two weeks for maintenance and whatnot. So you've only got to find 50 bookings. And if you're then putting Everything down to free night, then you've got to find 100 bookings because you're making your life a lot harder then. And when you get orphan dates, like the dates that we've seen, like those ones and twosies, they're so hard to fill, where you could be cheeky and you could be cute and you could be clever and you could start to message people and say, hey, got the two nights but would you like to upgrade it to four, etc. But at the point of booking, if you can capture those people that are looking and if, if you use the data correctly, I mean, obviously Kearney's is brand new to this. He's probably gone and put three nights day because he thought minimum three nights. Say that's what everybody's doing. But when you look behind the scenes of price labs and you set up the basics and then you go the next step down, which is, it's amazing that we can do this now, is that you can go, oh, this is actually what the data is telling us, this is why it's telling us and this is what everybody else is doing. So you get that extra level of confidence that you can do that next step instead of just sort of plucking a number out of the sky and hoping for the best. What was with the you amenities one that I saw on that chart that you were quickly. The report that you had there was something with amenities. If you could just quickly walk us through that one because I think that's going to be important.

So amenities chart is essentially we show two things. One is what's common. So you'll see that a lot of numbers here are very close to 100%. Like almost every home in this region has WI fi. That's no surprise.

That's a no brainer.

Yeah. Every home has tv, every home has kitchen, every home has pool. What you'll also see is there are two numbers here. One is about supply and one is about demand. So the supply number is it's saying 99.58% of the listings have a kitchen, which, I mean if it's a short term rental property. Yes. And then we are talking here, it's like four to seven bedroom properties. There are a solid 0.4% properties that haven't listed kitchen as an amenity on Airbnb here. The second one is saying what is the demand? So it's saying 99.9% of bookings are happening on a property that has a kitchen. So those 0.4% of listings that haven't listed Kitchen as an amenity are hardly getting any bookings, which is not a surprise. Like, I mean, if somebody shows up to book, the assumption would be that there's a kitchen. But if you're not listed it, they still want to question it. The useful sometimes thing to look at is desired amenities and sometimes very mundane stuff shows up here just because of how things work. And I'll go to that. But this is a useful one that shows up here. A pack and play or a travel crib. It's saying it has a desirability score of 7.2%, which basically means maybe half the properties have it, but the number of like 50% of the properties have it. But something like 57.2% of the bookings are done on a property with a travel trip because people are looking for it now. I said so this one actually seems like now that I see it, it makes sense. People are coming here for Disney. They probably have a younger sibling. Yeah. Sometimes mundane stuff shows up like shampoo and cable tv, which is essentially the good properties tend to list a lot of, like a lot of things amenities on their prop thing and so like that's out. People tend to book shampoo as well. But high chair, barbecue grill, hot tub, generally speaking, it gives you a sense of like, okay, what could be something that I add to my property? Yeah. This doesn't mean that you go add shampoo and start expecting a 6% bump in your bookings. But this is more to like spark some.

It's about, it's about like confirming the assumptions and it just makes sense. And again, if you've got more beds and you've got a large place and you're near Disney, which is very catered towards smaller children, there's a very high chance that in that party there is going to be somebody under the age of 2. Where to travel crib, high chair. Makes a ton of sense.

Yeah.

Brilliant. Just confirms assumptions. This is fantastic. We can definitely take this to, to, to CUNY and we can implement it and we'll be able to sort of see in, you know, six months time what the difference has been because like I say, if we can help earn 20, $30 extra on a booking over a year, that makes a big improvement on the P and L profit and loss. Appreciate that. So we're gonna look at the base, we're going to look at the minimum, we're going to look at the, the night stays. I'll feed this all back to cuny. We'll look to implement some, some things and we'll report back after the summer.

That's super. Thanks, Mark.

Appreciate your time. Thank you very much.