Question 1

What does REVPAR mean in short-term rentals?

Accepted Answer

RevPAR (Revenue Per Available Room) is a key performance indicator that combines occupancy, ADR (Average Daily Rate), and the total time a unit is available, providing a comprehensive measure of revenue generation.

Question 2

What does ADR mean in short-term rentals?

Accepted Answer

Average Daily Rate; the average income earned per occupied room in a given period.

Question 3

What does RENTAL ARBITRAGE mean in short-term rentals?

Accepted Answer

Rental arbitrage is a business model where operators lease properties long-term, furnish them, and then rent them out on short-term platforms like Airbnb, aiming to profit from the difference.

Question 4

What does BOOKING WINDOW mean in short-term rentals?

Accepted Answer

The booking window refers to how far in advance travelers make their reservations, indicating lead time for planning and marketing efforts.

Question 5

What does CASH-ON-CASH RETURN mean in short-term rentals?

Accepted Answer

Cash-on-cash return is a profitability metric calculated by dividing annual net profit by the total cash invested, indicating how hard your money is working each year.

Question 6

What does BASE PRICE mean in short-term rentals?

Accepted Answer

Base price is the foundational layer of a pricing strategy upon which all other factors and dynamic adjustments are applied.

Question 7

What does DYNAMIC PRICING mean in short-term rentals?

Accepted Answer

Dynamic pricing in Airbnb means adjusting prices up or down based on multiple factors, rather than using a static, set-it-and-forget-it approach.

Question 8

What does ADR (AVERAGE DAILY RATE) mean in short-term rentals?

Accepted Answer

ADR (Average Daily Rate) is a key metric for pricing strategy, especially during high-demand events like the World Cup, where significant increases are recommended.

Question 9

What does CAP RATE mean in short-term rentals?

Accepted Answer

Cap Rate (Capitalization Rate) is used to value commercial properties by dividing net operating income by the cap rate, indicating an investor's expected rate of return.

Question 10

What does CASH FLOW mean in short-term rentals?

Accepted Answer

The net amount of cash being transferred into and out of a business, which in STR terms determines if your rental is actually profitable after all expenses.

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