Free Money - Real Examples of How Dynamic Pricing Drove Higher Rates and Occupancy
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Discover real-life examples detailing how property managers were able to uncover "free" money by using dynamic pricing to charge higher rates during peak periods and get bookings during low periods. This presentation shows how real managers used strategies for adjusting prices and how those strategies paid off. This presentation will allow you to take a deep dive into booking history and demand trends and learn to identify opportunities that will generate incremental revenue just through pricing.
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Free Money - Real Examples of How Dynamic Pricing Drove Higher Rates and Occupancy
- 2. Free Money Real Examples of How Dynamic Pricing Drove Higher Rates and Occupancy
- 3. Panel • Ian McHenry, CEO of Beyond Pricing • Dennis Goedheid, CEO, Casiola (Orlando) • Dru Brown, Director of Sales and Marketing, The Vacation Company (Hilton Head • Aaron Linfoot, VP of Business Operations, Meredith Lodging (Oregon Coast)
- 4. Learning Objectives • Learn how to identify when you might be able to drive greater occupancy through lower prices • Learn when you can push prices even higher and what the key signs of being underpriced are • Become familiar with different strategies and tools for automatically capturing these revenue opportunities
- 5. Panel • Ian McHenry, CEO of Beyond Pricing • Dennis Goedheid, CEO, Casiola (Orlando) • Dru Brown, Director of Sales and Marketing, The Vacation Company (Hilton Head • Aaron Linfoot, VP of Business Operations, Meredith Lodging (Oregon Coast)
- 6. What is Dynamic Pricing? • Dynamic pricing is pricing based on changes in supply and demand • As demand changes, so should your prices • Ways people dynamically price: • Manually – increasing or decreasing rates because you see changes in the market or your competitors • Using occupancy or time-based rules to adjust prices • Using an automated, data-driven revenue management software
- 7. Demand is Different Every Single Day Las Vegas
- 8. Demand is Different Every Single Day Waikiki
- 9. Demand is Different Every Single Day Lake Tahoe
- 10. Demand is Different Every Single Day Outer Banks
- 11. Demand is Different Every Single Day Hilton Head
- 12. Demand is Different Every Single Day Orlando
- 13. Demand is Different Every Single Day Oregon Coast
- 14. Demand Differs Even within a Single Market Lake Tahoe – Mountain (Kirkwood)
- 15. Demand Differs Even within a Single Market Lake Tahoe – Lake (Tahoe City)
- 16. Demand Differs Even within a Single Market Bend, Oregon
- 17. Demand Differs Even within a Single Market Sunriver, Oregon
- 18. If Demand is Different Every Day, Why Aren’t Prices? Example Waikiki 1 BD
- 19. If Demand is Different Every Day, Why Aren’t Prices? 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% $80 $100 $120 $140 $160 $180 $200 $220 25-O ct 25-N ov 25-Dec 25-Jan 25-Feb 25-M ar 25-Apr 25-M ay 25-Jun 25-Jul 25-Aug 25-Sep 25-O ct Unit Price Occupancy
- 20. $80 $100 $120 $140 $160 $180 $200 $220 25-O ct 25-N ov 25-Dec 25-Jan 25-Feb 25-M ar 25-A Unit Price If Demand is Different Every Day, Why Aren’t Prices? Honolulu Marathon
- 21. Hilton Head If Demand is Different Every Day, Why Aren’t Prices?
- 22. Hilton Head If Demand is Different Every Day, Why Aren’t Prices?
- 23. Two Simple Ways to Make Free Money 1) Raise prices during peak periods (and micro-periods) to drive higher ADR 2) Lower prices during low and shoulder periods (or days of week) to drive higher occupancy
- 24. Raising Rates for Micro-Periods • Example: Thanksgiving in Hilton Head • Results: • 2017 – 363 bookings, $214,478 in revenue • 2018 – 364 bookings, $318,706 in revenue – with more coming in every day! • Free money: $114,000+
- 25. Raising Rates for Micro-Periods • Example: Columbus Day & Fall Break in Hilton Head • Results: • 2017 – (2 weeks) – 459 bookings, $398,282 in revenue • 2018 – (2 weeks) – 534 bookings, $489, 462 in revenue • Free money: $89,000+
- 26. Raising Rates for Micro-Periods • Example: Columbus Day & Fall Break in Hilton Head
- 27. Raising Rates for Micro-Periods • Example: Christmas and New Year’s in Orlando (full year avg ADR = $160) • Results: • 2017 – $267 ADR • 2018 – $354 ADR • Free money: $87/night increase in ADR for the week = > $100,000 across 180 properties
- 28. Raising Rates for Micro-Periods • Example: Christmas and New Year’s in Orlando
- 29. Raising Rates for Peak Season • Example: August on the Oregon Coast • Results: • Example listing: Wave Crest • Revenue in August: • 2017 - $6,150 • 2018 - $11,532 • Increased ADR for first half of August and drove occupancy in second half
- 30. Raising Rates for Peak Season • Example: August on the Oregon Coast
- 31. Increasing occupancy in shoulder season • Example: May on the Oregon Coast • Results: • Example listing: Wave Crest • 2017: • Revenue - $2,730 • Occupancy - 26% • ADR - $341 • 2018: • Revenue - $5,702 • Occupancy - 67% • ADR - $271
- 32. Increasing occupancy in shoulder season • Example: May on the Oregon Coast
- 33. Q&A • Ian McHenry, CEO of Beyond Pricing • Dennis Goedheid, CEO, Casiola (Orlando) • Dru Brown, Director of Sales and Marketing, The Vacation Company (Hilton Head • Aaron Linfoot, VP of Business Operations, Meredith Lodging (Oregon Coast)
- 34. Slides • Twitter: @beyondpricing • Email: ian@beyondpricing.com