Are you a host out there or a short terminal owner with a perfect review score and with lots of reviews?

Well, if you are, good news is, you can charge a lot more than your competition.

But how much more exactly can you charge?

Well, that depends on the city that you’re in.

And so in today’s episode, we’re gonna break down a few cities, we’re gonna look at their averages, we’re gonna look at the average review score across the board, identify how many hosts are actually out there with perfect review scores.

I’ll let you know, spoiler alert, it’s very, very small percentage.

So if that’s you, we wanna know how much more we can charge for our property.

And there’s several ways to do that.

There’s also a way to set up your property on a bit of an autopilot to take advantage of your exceptional review scores.

So stay tuned.

Welcome to Short Term Rental Riches.

We’ll discuss investing in real estate, but with a specific focus on short term rentals.

Quick, actual items to acquire, manage, and scale your portfolio.

I’m your host, Tim Hubbard.

I’m gonna start off with a few cities that you’ve undoubtedly heard of.

We’re gonna look at how many listings are in that entire city.

And then we’re gonna dig in a little bit further and find out how many properties out of that total market have a five star only rating with at least 10 reviews and also being listed on the market for more than 270 days.

We don’t wanna compare a property that’s maybe only there half the year.

That’s one of those settings, if you don’t check it, you could be comparing apples to something that’s not an apple, like a pumpkin, for example.

So let’s just go ahead and get into it.

So for those of you checking out the video, I’ve jumped on to AirDNA here.

If you’re not familiar with AirDNA, well, they are a statistics program for your short term rentals.

They scrape data across hundreds of thousands of listings.

So I’ve just pulled up Palm Springs here, a very common vacation city in the US.

Palm Springs, they have 4,068 active listings on the market.

And if we filter down to only those properties that have at least 10 reviews, and all of those are five-star reviews, that leaves only 320 listings left in the whole Palm Springs market out of thousands that have that review score history.

And now you’ll see that that’s actually really good compared to the next two cities we’re going to look at.

We can also see that the year-over-year growth is declining.

That means supply is coming off.

Now let’s take a one step further.

Let’s break it down and see how many have at least 20 five-star reviews or more.

320 to 280.

So this is actually not bad.

We’re going to look at a couple other cities here that have far worse average review scores across the city.

And that’s something that you really need to take into account because if you’re really stressing that you have a 4.9 average, but the rest of the market has a 4.9 average and 0.0001% of the market has five stars, well, then you’re doing pretty good.

So thumbs up to you.

So let’s go ahead and break down these next couple cities.

If we look at Las Vegas, let’s look specifically at the Las Vegas Strip.

They have 5.7 thousand total listings.

Now get this, if we narrow it down to only those listings that have at least 10 reviews and they’re all 5 stars, it goes all the way down from 5,700 to 64 listings.

Congrats to you if you have a property in the Las Vegas Strip and you’re one of those 64 listings, well, you’re doing a heck of a job.

In fact, you are definitely in the top 1%.

But what does that mean for the rest of you that are not in the top 1%?

Well, it actually means that you’re not doing that bad, right?

If you have a 4.9, if you have a 4.8, knowing that basically no one has an exceptional review score, well, then you can still charge premium prices.

And that’s what today’s episode is all about is, what sort of premiums can we put in place if we’re really knocking out of the park and we’re doing a really good job?

Before we get into some of the details there on what you need to be looking for, let’s look at one more city.

And this one I know you’ve heard of, Paris, France.

So Paris, France has 43,738 active listings.

Remember, I filtered this out.

So only properties are showing that have at least 271 active days on their calendar.

We know there’s a lot of regulations going on in France and a lot of these big cities, but I got to say 43,000 is still a lot of active listings.

So I’ve done the same thing here.

I’ve gone on AirDNA.

I’ve filtered out all the properties that had at least 10 five-star only reviews, and that knocked it way down from 43,000 to 751.

1.7 percent of the properties in Paris, France have at least 10 five-star reviews.

So again, this is a big difference from Palm Springs, right?

The average in Paris and the average on the Las Vegas trip is like way worse than the average in Palm Springs.

So you’re out there and you’re like, Yeah, Tim, that’s really interesting.

We know that it’s basically impossible to have perfect five-star reviews across the board.

And I would agree, the more reservations you have, the harder it’s going to be.

We’ve got tons of episodes talking about communication and guest experience, trying to make sure we have perfect experiences all the time.

You can check out all of our past episodes at strriches.com, but we know most of the time, there’s someone out there that they just didn’t have a good experience.

And maybe that’s because their flight got delayed, or maybe that’s because they stubbed their toe on the way into your property.

The reality is, is that we just can’t please everyone.

So what can you expect if you are still at the top of your game?

You’re in the 100th percentile in terms of pricing?

Well, you can expect your property to book up a lot faster, right?

Your booking windows are going to be much shorter compared to someone that’s just there in the average.

Why?

Because your property is going to show up at the top of the list.

You’re going to get more search impressions, more people are going to be seeing your property, and once they open it up, if they see just five-star reviews, you know there’s no sort of doubt there that you’re going to drop the ball.

So that’s one easy thing to note.

You will get booked faster, but there’s an exception.

If you have excellent reviews, you should be charging more for your property because you can.

And so how do we actually figure out what percentage increase we can put on our premium property?

Well, the answer lies in the data.

Data, data, data.

You have to look at the data.

We’ve talked about some really great tools for that, like PriceLabs.

We actually just recently had the co-founder of PriceLabs on, so if you missed that episode, go back and check that out.

But we know we can charge more, so we have to test this out, right?

First of all, we want to look up data to find what the other 90th percentile and up are charging for their properties.

If you’re out there and you’re brand new to this, well, just please know that if you use a tool like PriceLabs or use a tool like Beyond Pricing, this data is available.

You’ll want to create a comp set, and that’s going to show you how the rest of your market is performing.

That’s a great starting place, right?

We already know that we can charge in that premium level at the top of our market.

But if we want to get just a little bit more, knowing that our visibility is much, much higher, well, then I recommend raising your prices a little bit more.

But just a little, right?

We’ve got to monitor the booking windows.

If you raise your prices too much and your property is getting booked last minute, well, then you really risk not getting booked at all.

Of course, you need to know what the average booking window is in your market as well.

So again, you want to take your 90th percentile or higher, find out what their booking window is.

And let’s just say it was 30 days.

If you’re getting booked 10 days out, that’s a clear sign that you’re priced too high, even though you’re a premium property.

And I would say you’re starting to get in the risky zone.

We know that if you hold out and don’t get a booking at all, especially on a big day, and you’re doing everything else right for the whole rest of the year, that one holiday event, that could be the difference between you performing worse this year than you did last year.

So we have to monitor our bookings really closely.

And again, this is going to come back to testing.

So as a premium host, a premium owner with an exceptional review score history, there are a couple other things you can try.

One of those might be to raise your minimum night requirement.

So let’s say you’re in a market where the average night’s booked is two days for any given date range.

Well, maybe you try a three night average, knowing again that your property is going to be more visible to the rest of the market, meaning it has a much higher chance of getting booked.

And if you’re able to raise your minimum nights, well, then that means you have less housekeeping turnover and you very likely are going to have less vacancy.

I know we’re really getting into the weeds here and we’re getting into some deep revenue management stuff, but I’ve got an easy solution for a lot of you.

If you’re out there and you’re like, hey, I’m doing a fantastic job, but I don’t know what you’re talking about with booking windows.

I don’t know what you’re talking about with average minimum nights, all this stuff.

Well, there’s a great setting, assuming you’re using a dynamic pricing tool, you don’t have to fully understand everything to get the magic out of some of these tools.

Of course, we feel strongly that if you really know what you’re doing, that you certainly can earn a lot more.

And that’s why our team loves working with properties around the world.

If you’re out there and you want a little help, well, head over to coorsley.com.

There’s a Partner With Us button.

We’d love to chat with you about your property.

Okay, so you’re out there and you’re like, I don’t want to dig into the weeds all the time and be constantly monitoring the data and testing everything.

You just want to turn on a setting so that you can capture some higher income knowing that you’re doing a really, really good job.

Well, the setting you want to look for is an occupancy adjustment setting, and you want to make it aggressive.

Aggressive meaning that your far out prices are going to have a premium.

You actually shouldn’t need to discount your property at all, right?

Again, you’re at the top of your game.

It’s going to get seen more and it’ll get booked faster.

But if you just turn this setting to aggressive, that means it’s going to have higher premiums, but it’s still going to account for your occupancy.

So check out that setting.

And again, ideally, you’re in there viewing your occupancy and comparing it to the market, but I realize not everyone wants to or has the time to do that.

But this setting, turning on the aggressive occupancy setting, it’s going to help you.

And we know if you have a premium property that you could very likely be earning twice as much as someone in your neighborhood or a very similar property that’s not getting seen as much because it doesn’t have good reviews.

A couple last thoughts just to reiterate.

Remember that not every city’s average review score is the same.

We saw Palm Springs that had a lot more excellent hosts compared to Paris or compared to Las Vegas.

And remember, the more guests you have, it’s really, really hard to keep this exceptional review score.

So don’t beat yourself up if someone comes in and they leave you a bad review because they were just having a bad day.

We know we can’t please everyone.

And one last thing to consider, we’re only really talking about Airbnb here.

So remember, if you have an excellent review score on Airbnb and you have a really bad review score on VRBO or booking.com, then your pricing strategy should be different, right?

You should be marking up those prices differently.

If it’s the flip side, right?

Let’s say you had a couple crazy guests come in and they left you a bad review on Airbnb and you dropped down to, I don’t know, a 4.7, but you also already have a 5.0 on VRBO or a 10 on booking.com, well, then you can get those premium prices on those channels.

So when we talk about distribution between the different channels, we’ve got to keep an eye on these things.

And at the end of the day, everything that we do with our pricing, there is no crystal ball, right?

We have really good data, but that’s all that we have.

All that we have is the data, and we’ve got to monitor it closely.

I hope that helped you a little bit, gave you a little bit of insight.

And again, congrats to you if you’re out there and you’ve got a perfect five score review across the board.

That is not very common.

Keep it up, and until next time, I hope you have a fabulous week.

If you’ve been listening to the podcast for a while, then you know that I’ve been managing my properties virtually for years and years.

My team and I have managed thousands of guests.

We’ve learned a ton, and I’m really happy with the progress and the growth we’ve made.

In fact, we’re now big enough to help manage your properties as well.

Our team has a ton of experience, from the inner city apartment to the large lakeside retreat.

We’ve worked with all types of properties across the nation.

We’ll help to take the management workload off your plate while earning top revenue and excellent guest reviews, all while charging an industry low fee.

If you’d like to find out if your property fits with our program, just head to strriches.com.

There you’ll see a property management button.

Again, that’s strriches.com.

Just click on the property management button, and we look forward to chatting with you soon.