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We have put together this list of FAQ's to answer some of the common questions we receive from owners regarding pricing.
Please note that as per the agreement you signed with us, PHH has full autonomy on pricing and will not enter into discussions with owners regarding their property's pricing.
What Systems do you use to manage pricing?
To ensure we’re in the best position to capitalise on future shifts in demand and our listings stay ahead of the competition we utilise a dynamic pricing system built for the short-term rental industry.
The dynamic pricing system gives us real-time data and market insights to understand how our listings are performing so we can adjust pricing to maximise revenue and occupancy. Similar to how hotels and airlines adjust pricing according to demand, we are able to capture more dollars in busy seasons and improve our occupancy during slower seasons.
As a homeowner you will notice our prices fluctuate every day - this is intentional. Our pricing model considers the pricing data from your property's prior bookings along with seasonality, local demand/events and the day of the week. We’ve set conservative minimum prices to protect your returns.
The pricing data from the dynamic pricing system is pushed into HomHero which then in turn updates the booking websites. The dynamic pricing system manages the nightly rates as well as last minute discounts and even increases the pricing for bookings further ahead.
How do you set the prices when we first list?
We will compare your property to others in our portfolio and clone the pricing from the most similar successful property.
The factors we consider when doing this are:
The number of guests your property can accommodate
The location including distance to the beach or major attractions
The quality of the property
Whether the property is an Absolute Beachfront, Beachfront or Waterfront
Whether you are pet friendly (not being pet friendly will reduce bookings)
Whether you have air conditioning (will also reduce bookings)
Whether you have a pool or spa (increases demand significantly)
Do you set a minimum nightly rate?
Yes. PHH will set a minimum nightly rate based on the factors listed above. Your property will never be booked below the minimum nightly rate. We set a minimum rate for midweek (Sun - Thu) and Weekend nights (Fri & Sat).
Do you set the pricing lower when first listed?
We try to set the pricing slightly below the market rate to ensure that there is a high level of demand and high occupancy in the first month. This ensures high rank and high visibility of your property on the booking platforms. This is part of a carefully created strategy that has ensured our properties are the most successful in the area for many years.
How do prices vary throughout the year?
Our dynamic pricing system updates rates based on demand. These demand signals are pulled directly from data from multiple booking websites including airbnb, Stayz and booking.com on a daily basis.
To ensure we do not underprice your property we have minimum prices set up for the following peak periods:
Easter Long weekend
Xmas Peak - First weekend before xmas to second Saturday in January
Jan school holidays. Second Sunday in Jan to end of NSW school holidays.
There is very low demand for July and September school holidays so no minimum prices are set. The dynamic pricing system increases rates based on demand.
Do prices increase if my property is busy?
Yes - our dynamic pricing system automatically increases prices as your occupancy increases. Conversely it reduces prices automatically if your occupancy is low.
How do Profit Margins Vary Throughout the Year?
Profit in winter is typically in the 20-30% range with profit increasing substantially as we enter the summer months from October through to April. Summer profitability will range on average from 50% up to over 80% in peak season. Our annual average owner profit for FYE 2023 was 59%.
How Do You Set Winter Pricing?
Our strategy in winter is to achieve consistent bookings across the quieter winter months from June to September. It is critically important for success in the summer months that properties achieve a steady flow of bookings during winter. Whilst all bookings are profitable, our key aim in the winter months is volume of bookings rather than profitability. This means that bookings may often go as low as your minimum nightly rate.
Consistent bookings across winter means that your property is in a strong position to do well when summer starts. This is because each booking helps to maintain the rank (visibility) of your property on the booking websites as well as to increase the number of reviews. If you do a search on stayz or airbnb you will consistently see our properties at the top of the rankings for each area.
Our strategy has been tested over more than a decade and is part of what helps our properties to achieve double the bookings our competitors do - and to secure the highest rates in the marketplace when peak season arrives. In winter our properties are achieving 20-25% higher occupancy than our competitors. So whilst 80% of neighbouring properties are sitting empty losing money, yours are making profit and achieving higher and higher rank.
Whilst the profit on each booking is lower (at around 20-30%) the foundation of bookings throughout winter is key to a successful summer of bookings. Not having these bookings means that rank declines to the point where it is very difficult to find the property in search results. So are these bookings "worth it" - most definitely!
How often do you review pricing?
Our dynamic pricing system updates pricing automatically on a daily basis. Our staff also monitor booking performance daily and make adjustments to maximise bookings.
How Does Calendar Availability Impact Pricing?
Whilst we understand that owners naturally want to block dates to enjoy their properties, blocking durations longer than 2 weeks causes a significant decline in rank on the booking websites (particularly for new properties). The booking websites seek to promote those properties with good calendar availability, regular bookings and competitive pricing. In short, the more your calendar is blocked the more difficult it is to achieve bookings. This, in turn leads to us having to reduce rates.
What are the minimum night stays?
For all seasons there is a minimum night stay of two nights. If we have a one night gap between bookings our dynamic pricing system will automatically make the one night available at a higher nightly rate. Due to the higher rates in peak season we also permit one night bookings for one night gaps (orphan nights).
Our long weekends are set as two night minimums as our system is able to charge the same rate for two nights as we do for three. This strategy has proven to increase long weekend bookings.
Why do you charge separate cleaning fees?
We always charge a separate cleaning fee as this means that all bookings will be profitable irrespective of the duration of stay. For all properties we charge a per person linen fee in addition to the cleaning fee. These fees are not visible to the guest who will only see a total amount for their booking.
Why don't you have longer stays at Xmas?
Because we structure our bookings with a base rate plus cleaning and linen fees, the nightly profit is the same no matter the length of the booking, but by inviting shorter stays we tap into a much larger market of potential guests making the property more likely to book. Because guests are preferring to stay for shorter durations and a lot of properties do not offer this we can charge much higher rates. This is why our properties achieve above market rates in peak seasons.
How do the website rankings work?
Think of your property like a sporting team's league table. Every booking is a win which moves you up the table. The higher up the table you go the better your team does. The bigger the value of the booking the more goals you are scoring. The more wins on the board the better you do, even if it's a 1-0 victory! Soon everyone is seeing your property - they want to book with you on page 1, not with the one on page 5 of the search results!
What discounts do you apply to bookings?
The dynamic pricing system automatically applies discounts to unoccupied dates and will increase the discount amount as the available dates get closer.
No matter the discount, the nightly rate will never go below the minimum price set for your property.
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