The Math Behind Long-Term Discounts: How to Make Sure You’re Not Losing Money

Short Term Rental RichesJun 15, 202313m 35s92 viewsScore 85
Pricing & Profitability
intermediate
long-term discounts
STR pricing
revenue management
variable costs
occupancy rate
M

Summary

AI-generated

This video explains how to calculate the profitability of long-term discounts for short-term rentals. It covers analyzing past performance, estimating future revenue and variable expenses, and avoiding common pricing mistakes to maximize net income.

Key insights

  • A 100% occupancy rate might indicate that nightly rates are too low, suggesting an opportunity to increase prices and potentially earn more with slightly lower occupancy.

Mistakes to avoid

  • Giving out discounts out of fear of not getting booked can lead to earning less profit overall, especially if the discount pushes the net revenue below the property's break-even point.

Tools & resources

  • PriceLabstool

    Dynamic pricing tools like PriceLabs or Wheelhouse can help analyze pacing (current bookings vs. historical performance) to better estimate future occupancy.

Frequently Asked Questions

Curated by Learn STR by GoStudioM · Summary & key insights generated by AI · Reviewed by editorial