The most important Airbnb Hosting KPIs
“If you can't measure it, you can't manage it.” stated by Peter Drucker a guru of management. It is very important to know if your business activity is succeeding or failing. Therefore, you should keep a track on your performance without overloading with unnecessary metrics.
Tracking property management KPIs is critical, but it's equally necessary to pick the ones that make sense for you and master a few key measurements first.
Why is it important to monitor property management KPIs?
A KPI can be defined as Key Performance Indicator and as the name implies, these data can provide you useful information regarding your performance. KPIs will help you define your next steps, will show you where you perform better or where you must implement a correction plan.
The most important Airbnb Hosting KPIs to track
Focusing on the most important goals, we suggest keep records of the following Airbnb KPIs. More specifically, there are five (5) KPIs which you can use to measure your performance.
1. Average Daily Rate (ADR)
Average Daily Rate (ADR) represents the average amount each guest pays for a night over a specified time period. It’s the division of the total amount by the number of nights sold. A high ADR may suggest that you make the most money during the high season, but it may also mean that your occupancy falls outside of these times. Therefore, you should always look on occupancy rate too (see below).
2. Direct Bookings
Tracking direct bookings is a crucial statistic for recurring business and especially in Airbnb management.
Aiming on more direct bookings, you have less dependency on OTAs which will help you to reduce the cost of the platforms’ fees. As we have already explained in another article, being available on many OTAs is still critical for your business.
Before optimizing direct bookings you have to take into consideration that additional expenses will incur, such as the creation of your own website and the hosting of a booking platform on that website, but by increasing your direct booking it will pay off in the long term.
To calculate the percentage of direct bookings you should divide the total number of direct bookings with the total number of reservations.
3. Listing Optimization
Except from numerical KPIs, there are also the qualitive KPIs. For example, listing optimization could affect other numerical KPIs such as ROI, ADR and occupancy. Listing optimization is crucial because it represents your home’s amenities in the available platforms. Therefore, a more optimized home has more possibilities to be booked in comparison to the competitors. Such factors could be:
• Would you want to book your listings if you saw them?
• When was the last time you updated your photos?
• How do you stack up against your competitors?
• Do your listings explain amenities, facilities, check-in and check-out procedures, and any other important practical details?
• How frequently do you update your listings to keep them up to date and relevant?
• Are your house rules and policies expressed simply and politely?
4. Occupancy Rate
The Occupancy Rate (OR) is expressed as a percentage. Divide the number of nights sold by the total number of nights in a particular time period to calculate it. The highest the occupancy rate the highest the possibility to be booked during a certain time period. Just keep in mind that lower ADR usually equates to increased occupancy and vice versa.
5. ROI
Return On Investment (ROI) is one of the most common and important business KPIs. The calculation is really is because you just take the total revenues and remove the total costs (including investments).
The equation is really simple, you can just improve your ROI by reducing the costs and increasing the revenues.
In Conclusion:
To conclude, it doesn’t matter if you are an experienced or new to the Airbnb management. Just try to have a close monitor to these five elements – KPIs in order to understand better the business. At the end of the day by starting a business you should be ready to invest some time to get familiarized with the KPIs. You always want to know how your money perform.
Airbnb Host Tips
Hosting ain’t easy. It takes a lot of work and a lot of time. It requires you to wear multiple hats. It entails strategic thinking, data crunching, and adapting to emerging trends in the short-term rental market. Whether you are new to hosting or an old hand, however, there are always tips and tricks you can learn to help you lighten the load and make you a better host.
Below you may find 10 tips regarding your Airbnb. You might be familiar with some of them, but it is worthy to spend some time reading them.
1. List on Multiple Channels
Even Airbnb is a very famous platform, you will always need visibility to other platforms. You should remember and follow only one rule. The higher the views you have the highest the possibility to be booked. So, while hosting on Airbnb is a given, also consider online booking platforms such as Booking, Expedia and VRBO.
2. Calendar synchronization
When listing on two or more online booking platforms, it is of utmost importance that you connect your calendars and prevent double bookings. A channel manager or a property management company is the best way to sync your calendars across multiple platforms. More specifically, a property management company could connect your calendars under its own account by reducing your cost.
All reservation data including pricing, availability, minimum night requirements, etc are updated in real-time so double bookings and other pitfalls of listing on more than one booking platform are completely avoided.
3. Always Be Available
Real time responses are more crucial than ever. In today’s world, everyone seeks for personalized experiences. So, guests demand quick and appropriate responses to their messages. But, from the other side it is almost impossible for you to be always available for your Airbnb management. One option is to deliver this task to a property management company, and the other option is to create pre-defined messaging templates, so you don’t have to draft new messages each time.
4. Self Check-in
Self-Check-In could a be useful tool in your Airbnb management. It has lot of advantages and with options ranging from lockboxes, smart locks, and key exchange services, you can easily save yourself time, hassle, and eliminate the stress of waiting on a guest to arrive. Self-check-in also helps guests feel trusted, provides them with privacy, and enhances their safety.
5. Review Your Guests
Everyone should keep in mind that the Airbnb reviews reflect the opinion of the guests for the property and consequently there is needed to be careful and specific management to get the best result. Moreover, the Airbnb reviews can also become a very useful tool for the hosts, because through them they can get feedback that will reflect their advantages or the chances for improvement. It is also worth saying that Airbnb reviews do not appear with chronological order and you should search them to be sure you find the most recent one. Getting good reviews consistently will improve your Airbnb SEO rankings and increase conversion. An easy and effective way to get guests to review your listing is to write them one, encouraging them to review you in return.
6. Use Dynamic Pricing Strategy
The years during the global pandemic many aspects of the Airbnb management have been changed. One of the most important aspects that has been affected was the prices. So, it is not safe to use your historical data to plan your future revenue. To remain competitive demands a dynamic pricing tool that will provide you up-to-date insights and analysis on how best to diversify pricing in real-time to maximize conversion and revenue.
7. Plan for Seasonality
Most vacation rental markets have a high season, a mid-season and a low season. Therefore, you should plan in a way that ensures you attracting guests throughout the year. Factors like, Airbnb minimum night stay policy and different prices during weekends are crucial for your listing and your performance. For example, lower minimum night stays during the off-season and longer ones during peak season can all go a long way in ensuring your short-term vacation rental business is growing optimally.
8. Hire a Co-host
If you are new on Airbnb management, it’s not bad to have an extra set of hands to help you. A property management company can always act as a co-host to help you manage your listing. Co-host can have limited or fully access to your profile and it’s always up to you to decide the level of authority – responsibility the co-host will have.
9. Think Like a Guest
Putting yourself in your guests’ shoes is the best way to deliver a memorable stay that will not only see them leave your Airbnb a great review but turn them into loyal, repeat customers. For example, provide enough pillows and toilet paper so they don’t have to ask you for more. Whenever possible, be flexible with check-in and check-out times. A personalized welcome basket can make the difference upon check – in by creating a warm atmosphere. Provide local guidance, from shopping and dining recommendations to a whole travel guide which can also be used as a marketing tool.
10. Keep Learning
There is always more to learn, especially in a landscape that is always evolving. Keep an eye on your competitors – in your location and the Airbnb Category you fall under – to learn from what they are doing right as well as their mistakes. No one is perfect and there is always plenty of room be perform better than the last year.
