I got a chance to do an interview with Everbooked CEO David Ordal, about how they got started and what they are up to with their Airbnb Pricing Tool, Everbooked.
Ordal btw is a computer engineer, entrepreneur and world traveller, who has visited every continent but Antarctica. He’s been using short-term rentals since 2000, and Airbnb since 2010.
I think these kind of tools can be really helpful for Airbnb hosts of all types. Most hosts simply set their price and forget about it, so you can stand out by dynamically managing your prices just like hotels do.
Best of all, you can try it for 90 days risk free and see if it works for you. Check out the interview below.
How did you guys get started?
As a yield management geek, I realized we could bring the power of big data to the little guy; the micro-entrepreneurs and property managers making income via their Airbnb listings.
Can you give me a quick overview of how your service works and what data sources it uses (Airbnb, Expedia, etc)?
We help Airbnb hosts price their listings to maximize revenue, raising and lowering prices depending on what’s happening in the market. Everything is automatic: we capture and analyze demand data around the clock, and update their Airbnb calendar whenever anything changes.
In essence, it’s a simple concept: When demand is high we raise your prices. When demand is low, we lower your prices. We look at dozens of sources of data, but a few of the top ones include:
– Local hotel prices and booking rates.
– Booking and price data from competitive Airbnbs.
– Overall seasonal travel patterns.
– Local event activity (conferences, festivals, etc.).
– Weekday/Weekend booking trends.
Diving into the details a bit more, can you tell me how Everbooked can determine what big events are going on in a city to adjust pricing?
That’s a good question, Aaron. There’s some secret sauce here since events are one of the toughest demand drivers to track and assess. What I can say is we’ve developed a proprietary process to find events with a true impact on demand – i.e. those that draw lots of people from outside of a given city – rather than just picking up big events that draw mostly inhabitants of a given area.
We’re also factoring in distance from the event area in the equation to reflect the fact that hosts with nearby listings have a greater pricing opportunity compared with distant hosts.
Also, how do you take seasonality of a market into account? Like in Hawaii, there are specific seasons with higher and lower prices that are typically charged.
We account for seasonality by looking at general travel trends, hotel and Airbnb specific data for a specific region. We’re doing this on a ‘hyperlocal’ level — looking at how trends change by neighborhood.
For example, in Los Angeles, the beach neighborhoods have a much different seasonal profile than do inland neighborhoods near business centers.
Does your model take into account differences in vacation centric markets (guests book further in advance) versus other types of markets that may be more last minute?
We track demand data and provide pricing updates one year out. Therefore, changes in demand based on hotel, airbnb, and general travel patterns are incorporated into the model.
We counsel our clients to gauge their pricing based on occupancy levels relevant to local booking patterns.
How much can the average host expect to benefit?
In many markets as many as 1 in 5 hosts set only one price for their listing. For those hosts, we’re typically seeing a revenue increase as much as 40%!
Hosts who are already doing some demand based pricing (e.g. weekend / weekday or high season / low season) should expect an increase in yearly revenue on the order of 20%. At a cost of 1% of their revenue touse Everbooked, that’s a 20X return.
The increases come in two general forms by the way. First, hosts gain more revenue on the upside via price increases when demand is high. Second, they gain more bookings when demand is low because they’re priced appropriately for the low-demand market.
As a host, can I prevent my prices from going too low?
Yes! We allow you to set both a minimum AND a maximum price. If it’s not worth it to sell a night at less than $X, just tell us what X is and our system will automatically make sure your price is never set below that. We caution hosts to use this sparingly — sometimes you’ll want to set a lower price than your neighbors to gain a booking on a low-demand night — but we make the option available in case you need it.
Are there any types of hosts that would not benefit from your service?
We designed Everbooked to work well for all hosts. So if you’re in our coverage area you should be good to go. Our service is customizable to each property owner’s unique situation, listing and goals.
That said, the one’s who will do best with Everbooked are those that take a little time upfront to determine their price range, understand the features and benefits of Everbooked and are willing to work with it for maximum benefit.
How do you take quality of listing into account? Now and future plans?
We are currently gauging quality based on three factors:
-host
-listing photos, and,
-booking activity
For host quality we use proxies like number and level of reviews.
Looking at comparable properties (‘comp’s’) is another way to gauge and account for quality.
That said, quality is still an imperfect science, especially since each short-term rental is unique.
How are you different than other pricing companies?
We believe our data set to be the most comprehensive while our engineering and dynamic price modelling acumen are second to none.
With better data and the skill sets to harness the power of that data, we have the opportunity to create better algorithms and ultimately better pricing recommendations for our clients.
What is your opinion of the Airbnb pricing suggestions tool? Long term do you see Airbnb complimenting pricing services like yours, or turning into a competitor?
Airbnb’s new pricing tips may prove to be a useful addition to the tool kit for Airbnb host’s. We wrote a blog post about it that your readers’ may be interested in, Aaron:
https://www.everbooked.com/blog/airbnbs-updated-price-tips/
Future plans for VRBO, homeaway, or other listing services?
Yes, we have plans on our near term road map to add connectivity with VRBO and other platforms.
Any special discount or offer for my readers?
We can offer a 90 day free trial for your readers Aaron. Just ask them to sign up with the code:
‘vrfrontdesk’
They can sign up here for the 90 day Free Trial (normal is only 30 days)
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