Length of Stay Trend or Experiment?

23 Replies

Fellow BP STR Owners, would like to read your opinions:

In my microcosm active STR market, a recent study of my local competitors on Airbnb I saw to see a trend of required longer stays. Two specific multi-property owners are requiring 5-night minimum stays across the board and based upon their calendar (although the bookings could be coming from other OTA's) it is working. They are also providing 25% weekly stay and 35% monthly stay discounts. I scratched out the math and if their calendars are accurate, this is a really smart strategy financially, but also could weed out the riff-raff as @Selena Walsh post this week discussed. So I'm following suit - but not exactly the same. Since my focus is on maximizing revenue and profit (occupancy comes along for the ride), I have taken my properties and are requiring the following length of stays:

My minimum stay is set to two nights so Tuesday (I don't get Tuesday requests) and Friday are left alone because I also restricted Saturday check-in and check-out.

Minimum stay by day of week is now set to:

Sunday - 4 nights

Monday - 4 nights

Wednesday - 4 nights

Thursday - 3 nights

I then lowered my rates for the weekdays to capture more revenue but priced below majority of the competition; e.g. if Property A was $100 per night for a minimum 2 night stay = $200.  Now the same property is requiring (4) nights at $75 = $300.  I adjusted my weekends slightly to encourage longer stays as well and since there are not check-in/out Saturday's, this is capturing more than my original 2-night requirement.  Leaving my minimum stay at (2) still helps my search position and broad searches.

I added weekly/monthly discounts slightly different per property to capture more days/$$$ but not as aggressive as 25%/35%.

Best,

Mike

Awesome stuff @Michael Greenberg !   I'm going to be so curious what the numbers look like for you after a few months!  Sounds like a worthwhile experiment as it's always my preference to get quality over quantity bookings so long as the numbers can line up.  Keep us posted !

Cheers!

@Michael Greenberg I have played with this for a few years and after an exhaustive amount of analysis, and creating my own algorithms and scenarios, it throughly depends on which days and seasonality. Where we have properties in vacation locales my occupancy skyrocketed by 31% if I went with 3 days including weeekends. When we went to 5 days it dropped by 40%. In other words we have a heavily dominated weekend market stay clientele. In our markets that attract several business travelers the 5 day minimum was a huge hit. In fact travelers would book for 5 days and only stay 3 or 4 because it was dramatically less then a hotel. So, what’s my synopsis? It all correlates to market and clientele. It really had no effect in me lowering prices dramatically or raising them. In other words it’s clear as mud!

I'm doing something similar, though it's based on my own desire for less turnover vs. trying to get more bookings.  I stay about 95% booked so there's no incentive for me to offer weekly or monthly discounts.  My minimum night stay is also 2 nights (though I'll allow single night bookings if I have an "orphan" night) but I want to encourage longer stays.

The strategy I'm taking is, if someone is booking a few months ahead, I'm requiring 4-night stays.  Then, as the calendar fills up, I'll change the settings to allow shorter stays that will fill the "holes".  (I NEED to make it so you can't check in/out on Saturday but I haven't implemented that yet)

@Michael Greenberg 's way is probably more efficient, LOL - when I get time again to really futz around with my properties again, I may very well adopt that strategy.  Thanks for sharing!

@Eric A. that is hilarious!  Interesting results and it's exhausting already (spreadsheet hell) and I'm just getting started.  I too have a strong weekend clientele and want to attract more weekday/business stays as that too is an opportunity in my market, especially in low season.  It appears from your post that you were priced competitively already whereas I have been market neutral with my competitors, but still getting north of 70% occupancy.  Similar to @Julie McCoy I want longer stays and 'better" clientele, especially at my larger properties that accommodate larger groups.

Thank you both - great stuff.

@Michael Greenberg thanks for sharing your strategy. Not enough of pricing strategies discussed here. @Eric A. Have you adjusted your weekend price since you began requiring a three night stay? I think we’re in the same market, St Augustine, so I’m wondering how you’ve done that.  @Julie McCoy On Airbnb, how do you require a 4 day minimum a few months out? Does that mean you change it in the description depending on your calendar every so often?

@Nancy Bachety Hi Nancy! Yes, we have St. Augustine rentals and it really depends on the area of town. Downtown is somewhat different from Vilano or St. Augustine Beach. Downtown we have seen that boosting the price to $150 a bedroom on the weekend gets rented quickly with the third night slightly less. The issue is the other weekday nights are very hard to get. Again, bigger houses with more bedrooms. In the beaches and Vilano we get guests who seem to stay longer overall. Especially, in the winter, spring, and definitely summer but my overall suggestion is to charge $125 - $150 per night per bedroom and keep raising it until bookings slow down. We have booked Thanksgiving for four days for $795 per night and we opened the dates this weekend. So, demand is there big time!!! Good luck.

Thanks @Nancy Bachety .  I agree, would be great to see different pricing strategies here.  I just received a booking for (8) nights (I never used to get these length of stays for November at this property).  They booked for $90 per night and my normal rate would have been around $100 for these same nights which likely would have booked a (3) night long weekend stay.  Simple math $90 x 8 = $720, $110 x 3 = $330.  No brainer!  Thanks for sharing more details @Eric A.

Originally posted by @Nancy Bachety :

@Michael Greenberg thanks for sharing your strategy. Not enough of pricing strategies discussed here. @Eric A. Have you adjusted your weekend price since you began requiring a three night stay? I think we’re in the same market, St Augustine, so I’m wondering how you’ve done that.  @Julie McCoy On Airbnb, how do you require a 4 day minimum a few months out? Does that mean you change it in the description depending on your calendar every so often?

 I've created rule sets for minimum-night stays.  Right now anything March 2019 or later requires a minimum 4-night stay.  As the dates fill up, I will have to manually go in and adjust the rule sets so 3-night blocks can still get booked, etc. but for the moment I'm just letting that ride.

VRBO allows similar controls, they just call it different things, and as usual, each setup is a bit different.  It's all pretty tedious, so I need to figure out a more efficient way to do it, but I enjoy being able to control things on that level. :) 

@Michael Greenberg Great thread! I used to do something similar with longer minimums on certain days of the week and may go back to that sooner than later. A lot of our units are < 1 year old so I'm still finding the pricing sweet spot before I get too complex with pricing + min night logic. Right now I'm doing something similar to @Julie McCoy I have prices set ~ 20% higher for 60+ days out and also have the min night set to 4 for approx. 60-90+ days out and adjust manually back to 2 night minimum as I get closer to the date range. [A large percentage of my bookings are made 30 days or less in advance). This has helped us get some "big wins" like whole month bookings, which are not that common in my market unless you are targeting corporate or traveling nurse markets. But Saturday check-outs are definitely a problem with this strategy.  Another factor for us - several of our units are duplexes where we have each unit listed separately and a third listing for both units together. I'd much rather rent out the full duplex, especially in peak season, so I try to incent booking the full place and create higher nightly minimums on the individual units vs. lower for the full duplex. 

I just recently stopped allowing the one nighters. When we first started I was loving them because I was able to fill every hole in the calendar. Of course in the early days bookings coming in is like a drug. But after a few years I’ve realized the one nighters are the cause of most of my stress. They seem to be more high maintence than other guests. My AirBnB interface unfortunately doesn’t allow rule sets like @Julie McCoy does. It’s one of those “let’s try it on certain people” jams.

Constant evolution in this business!

@Lucas Carl Yeah the only reason I'll allow them is I can control exactly when they happen... I wouldn't let the one-nighters be my default minimum, either.  (it still blows my mind that so many people are willing to pay a retail rate plus cleaning for only one night!)

Forcing high midweek minimum stays during off/shoulder season can kill demand on your STR. I would stick with 2 night minstays for Mon/Tue/Wed during the periods of low demand. Depending on where you are, you may want to try setting your peak season minimum stay to 7 nights, then decrease that minimum stay as you approach peak season. This can be a nice way to garner premium week long stays further out, then you can fill in the gaps with shorter stays as you approach peak season.

Of course a dynamic minstay solution that takes into account the periodicity and elasticity of any given day on your unit is the most ideal solution ;)

@Selena Walsh and @Julie McCoy - really like this "sliding nights scale" you have created and I'm going to add that to my strategy.  VRBO is definitely more challenging with this process right now, although their MarketMaker tool (that's been in BETA for 10 months now - hmmmm?!) will make this easier as I have been part of the "BETA" with one of my properties.  @Lucas Carl - I believe you may the ability to set this up if you are marketing on Airbnb.  You can set rules under "availability" "trip length".  @Jon Latorre I don't think the strategy will "kill demand" and based upon my experience and others on this thread, it can work with some homework, research and monitoring.  Maybe there will be a future process that can help automate this process.

Thanks everyone for your feedback and would welcome any additional ideas and thoughts.  It is a serious and important business topic, one that belongs here on BP and not a bulletin board.    Mike

@Mike Greenberg - I think it might be interesting to evaluate performance of minimum stays in an area, maybe partitioned by weekday / weekend minimum stays and possibly all bed/bath combos.

This leads to the question of, If you had perfect knowledge of optimal minimum stays for your market, would you assign those minimum stay values to your listing?

Running experiments sounds like a good strategy but a better strategy might be to look at performance of existing listings. This can save us the hassle of running the experiment and trying to interpret meaningful results with a sample size of 1. 

@Alan Da Costa Perfect knowledge of anything and I wouldn't be doing this :-).  Yes, absolutely I would assign those values to my listings.  It is presently running on my existing properties, the term "experiment" is that I am limiting the amount of time but willing to give it at least 90-days.  I will also be adopting the strategy that @Selena Walsh and @Julie McCoy have taken - the closer the dates become, the lower the minimum stay requirement.  Quite a bit of heavy lifting but it's my full time job now.

I'm in the process of acquiring STR cabin #1, consulting with @Lucas Carl on mgmt tips, with @Avery Carl as agent. Pricing strategy is vague atm but basically I'm taking the historic rates for that property (private property management co), factoring in Airbnb pricing on similar properties in the very local area, and dropping the price somewhat for the first few months to establish history and ratings (and keep occupancy as high as possible during low season we'll be heading into), and adjusting as trending indicates. 

Probably a 2 day minimum to start, though I'm considering a 3 day minimum as well. Filling in single days manually until we feel it's not worth doing so at some point in the future.   Gonna start on Airbnb and after we have that stabilized will add VRBO.

@Richard Lee I might suggest going live on both platforms at the same time. I notice that if you go live with one first and the other later, whichever came second never catches up. 

I’m getting antsy waiting to start my cabin acquisitions. My wife is insisting we visit the area first and we never seem to have time to get away for 3 days to plan the visit. 😔 Theres 3 cabins I’ve been watching from Avery’s mls blast that I’m ready to purchase sight unseen. Dang wives! lol At least it’s giving me time to watch the market and get my ducks lined up.