I previously wrote about maintaining optimism in the short-term rental market as things will rebound very quickly once restrictions lift. In this post, I’d like to dive deeper into what can be done during the lockdown to improve your chances of getting at least a few bookings during this period.
The main way guests find your property online is if it is priced correctly, so having a strong pricing strategy is key to getting bookings during the lockdown. As there is currently not much demand from guests but a lot of listings available, you need to make sure your pricing is attractive for the few guests that are still in need of accommodation.
One way we do this at Zodiak to achieve around a 55% occupancy rate during level 3 is by offering weekly and monthly discounts to encourage longer bookings. You are competing for a very limited number of bookings during levels 4 and 3 so you need to incentivise guests to book longer stays to bump up your occupancy rate. It’s better to get one 18 night stay at $120 per night than just two 3 night stays at $250 per night, and it’s easier to get that one long booking than two short bookings. This way, you lock in some income and give yourself some predictability in an otherwise uncertain situation. There are still some people travelling to Auckland for necessary work for longer periods so this option works very well for those guests.
Another way to make sure you are priced correctly for the current market is to constantly revise your nightly rates if you are not getting any bookings. Adjusting the price down by just $5 every few days will allow you to drop the price just enough in order to start getting some traction. When you start getting a few enquiries, you know your pricing is correct compared to other similar Airbnbs guests are looking at. Lowering the price too quickly can result in missed income though so it’s best to lower only $5 at a time and wait a few days to see the response.
With the above two methods, your prices will be much lower during the lockdown than where you want to be for when restrictions lift, so how can you ensure you don’t get booked up at low prices for the next two months? The best way to do this is to create a seasonality pricing strategy that can raise your current nightly rates by a percentage for future dates. We are currently pricing our properties for lockdown until the 14th of November, after which the price is automatically increased by 80% for the rest of the year using our pricing software. I predict that there will be a flood of bookings as soon as level 3.3 is announced (when retail begins to open up again) as this will signal the coming end of level 3. It really depends on what the Government decides to do in terms of dropping the restrictions so the 14th of November is just a guesstimate – hopefully, the Government give us some actual timelines soon so we can start planning ahead.
With the above strategies, you can ensure you are priced correctly to at least get some income during the lockdown, and that you can bounce back quickly once demand picks up again. I am still confident that this summer will see extremely high nightly rates and occupancy rates as people are very keen to travel and get back to normal as soon as they can. If we keep the vaccination rates high, we can see the lockdown lift sooner rather than later. Keep it up NZ! If you’d like to learn more about how short-term rental works and find out if this strategy is a good fit for your goals, then please visit our website at www.zodiak.co.nz or get in touch with me directly at [email protected].
Stefan is the Managing Director of Zodiak Management, an all-in-one Airbnb management service.