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U.S. short-term rentals have seen demand soften through the summer of 2023. However, even with fewer travelers, 50% of property managers using Key Data saw year-to-date revenue increases as of August 20th, 2023*. The other 50% of U.S. property managers saw a decrease in revenue. This begs the question, what’s causing the divide in revenue? Let’s take a look!
*U.S. Direct data as of August 20th, 2023
Impact of Inventory On Revenue
The 50% of short-term rental property managers that saw an increase in revenue year-to-date for 2023 had one notable difference from the 50% that did not; their inventory increased by an average of 24% year-over-year. These companies saw a 14% average increase in revenue as of August 20th. Meanwhile, inventory was down an average of 2% year-over-year for the companies that saw an average decrease in revenue of 13%. This indicates that shrinking inventory may have posed an additional obstacle for property management companies already facing challenges in 2023.
While revenue and inventory rates had massive gaps, RevPAR (Revenue per available room), Average Daily Rates, and Adjusted Paid Occupancy % were quite similar between the two groups. This paints the clear picture that U.S. property managers who have seen revenue growth in 2023 have done so due to their inventory growth year-over-year.
The performance demonstrates that an increase in revenue does not equate to an increase in RevPAR. Companies expanding inventory should carefully evaluate associated employee costs, and whether the new properties align with their brand. To continue the momentum sparked by higher revenue, a strategic revenue management plan is needed to increase RevPAR. But, higher revenue is preferable to lower revenue nonetheless.
How to Use Data To Increase Your Inventory
With the notable differences between the companies that increased their revenue year-over-year and those that did not, you might consider focusing your attention on inventory growth. When paired with strategic management, higher revenue can create a positive impact on RevPAR. So, here are a few ways you can utilize data to expand your inventory:
Find The Best Areas to Invest
Identify the fastest growing markets with Key Data’s Feeder Market report. Plus, see a geo-targeted heat map showing where guests are coming from and which markets are growing the fastest.
Dive Into Profitable Property Types
Compare the performance of your units based on key metrics like bedroom count, amenities, and property type to get a clear view of what’s driving bookings. If your guests consistently book 3-bedroom, beachfront properties with a pool first and for the highest rates, you know what to target when adding to your inventory.
Look Into Missed Demand
See which searches are most popular on your website before guests book with DemandIQ® inside your Key Data Dashboard. Plus, identify which searches had zero results so that you can identify the gap between guest demand and your supply. Then, use the insights to target new inventory and let prospective homeowners know you already have guests searching for their property type.
Enhance Your Reputation With Homeowners
Happy homeowners stay on your program, and can attract more homeowners. Keep communication open with your owners by sending customized owner reports for their individual units straight from your Key Data Dashboard. Or, automate these reports so that your homeowners never miss an update.
Benchmark Your Performance
Quickly catch changes in your performance compared to the local market to identify when it might be time to change your strategy. By knowing exactly where you stand, you can spot disruptions easily and quickly adjust your strategy in response.
Want to learn more about how you can stay informed on market trends to grow your business? Contact us to get a personalized demo of the Key Data Dashboard.
