Revenue management holds the key to optimizing yields from short term rental properties. At Lagom, we believe that revenue management is a balance of art and science. Read more to discover key performance indicators to monitor, ways to streamline your revenue management approach, effective communication techniques with property owners, and more.

Why Do You Need Revenue Management for Short-Term Rentals?

Imagine a scenario in which your vacation rental home is a smashing success, customers are yearning to make reservations with you, and your revenues are through the roof. This vision can come true with a savvy revenue management plan in place. This is only possible by carefully adjusting prices, restrictions, and distribution methods.

A vacation rental revenue management strategy’s primary objective is to sell the right product to the right customer at the right time, through the right channel, and at the best price. To maximize revenues, this balance must be attained. This delicate balancing act is what separates the most successful property management companies from the rest of the pack.

However, if you feel like your revenue management plan needs an overhaul, it can be challenging to know where to begin. Fortunately, the rental management experts at Lagom are here to share their insights and tips to help you revamp your strategy and achieve your revenue goals.

Top Revenue Management Metrics to Prioritize

Revenue managers have a plethora of key performance indicators (KPIs) at their disposal to help them track their vacation rental business’s financial health. The top three metrics that revenue managers typically focus on are:

ADR (Average Daily Rate)

This measure monitors the typical amount paid by visitors each sold night over a certain time frame. It is determined by dividing the total revenue received by the number of nights sold.

Occupancy Rate

This metric calculates the proportion of nights spent in a given timeframe. It is determined by dividing the number of nights booked by the total nights offered during that time period.

RevPAR (Revenue Per Available Rental)

This complete metric accounts for both revenue and occupancy. It can be computed by either dividing the total revenue by the number of nights available during the period or by multiplying the ADR by the occupancy rate.

The bottom line of your vacation rental property can be improved by making informed decisions regarding pricing, marketing, and other revenue management techniques by closely monitoring these variables.

Lagom’s Vacation Rental Revenue Management Approach

To ensure the success of our clients’ rental properties, Lagom’s holiday rental revenue management strategy focuses on a number of essential components.

  • To maintain accuracy and maximize earnings, manual oversight entails active management of the revenue management process. We at Lagom keep a close eye on price, constraints, and distribution methods to make wise decisions and modifications.

  • The approach taken by Lagom particularly emphasizes the importance of performance insights. We offer clients detailed performance indicators and useful insights by utilizing data analysis and reporting solutions. This enables clients to keep tabs on their progress, pinpoint problem areas, and decide wisely on their rental properties.

  • Our revenue management tactics are created to generate the most income and profits for the rental properties of clients. We are able to offer quantifiable results that help us deliver maximum revenue for our clients by putting best practices into use and using cutting-edge technologies and procedures.

  • We use cutting-edge analytics and data modeling tools to spot possible problems before they arise. This enables us to take preventative measures to solve problems and make the required adjustments to ensure that average yield doesn’t drop

With a sophisticated revenue management strategy, Lagom stands out from its competitors by driving consistent and robust growth for its clients.

Through the use of cutting-edge technology and data-driven insights, Lagom empowers property owners to optimize their rental income and increase demand for their properties. By providing the necessary tools and support, Lagom ensures that its clients achieve their financial goals while maintaining high occupancy rates.

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