Distributing your listings across different online travel agencies (OTAs) like Airbnb, Vrbo, and booking.com is a sound strategy for any short-term vacation rental. Just as important, however, is to grow your brand with your own website and booking engine.
In short, you want as many eyeballs to see your listings as possible in order to maximize your revenue potential.
There are limits, however, to the total number of places you want to list your properties. At Beyond, we’ve been able to track booking growth against the number of channels properties are listed on, and there is a diminishing rate of return above four channel listings.
Additionally, the added burden of having to manage multiple listings on multiple channels can be more of a headache than a benefit, especially if you’re doing that manually (more on this later).
Having a listing on 2 or 3 of the major OTAs, combined with your own website and booking engine, is the sweet spot to be in terms of channel distribution.
Why Net Average Daily Rates (ADRs) Matter
The net ADR for a booking only represents the amount of revenue or ADR for a booking that a property manager receives after paying for host distribution fees on different distribution channels.
Net ADRs are important when it comes to analyzing profitability because distribution channels have different fees associated with them that can skew how much money a property manager is adding to the bottom line of their business.
Hotels, for example, have historically used net ADRs to calculate which of their online distribution channels are the most profitable. Hotels then use this net ADR data to determine which channels they should exclusively sell on during periods of high demand in order to maximize net revenue when demand outweighs supply in the market.
Channel Markups to the Rescue
Channel markups are one of the quickest and easiest ways to grow net ADRs across all distribution channels. Channel markups automatically add a channel-specific flat fee or percentage amount onto daily prices for each channel to help cover the cost of distribution fees that OTAs charge.
Static channel markups may still be causing property managers to leave money on the table, however, so using a markup strategy that takes into account shifting trends in market supply and demand is important for maximizing your revenue management and distribution strategy.
Beyond’s Relay is a dynamic channel markup tool that automates and simplifies a sound distribution strategy. Stay tuned for an exciting announcement regarding this great tool, but in the meantime feel free to request a Relay demo here.
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