Loading...
Loading...
Category: Pricing & Revenue
By: Emily Chen
Reply by Camille Dubois:
This is one of the most misunderstood metrics in STR hosting. Higher occupancy is NOT always better. **The math:** - Scenario A: 90% occupancy at $100/night = $2,700/month - Scenario B: 70% occupancy at $150/night = $3,150/month - Scenario C: 60% occupancy at $180/night = $3,240/month Scenario C earns the MOST with the LOWEST occupancy. Plus fewer turnovers = lower cleaning costs and less wear and tear. **General targets by market type:** - Urban/business markets: 70-80% is healthy - Vacation/resort markets: 50-70% is healthy (higher seasonality) - Luxury properties: 40-60% is healthy (fewer bookings at higher rates) If you're above 85% consistently, you're almost certainly priced too low. Raise your rates until occupancy drops to 70-75% and watch your total revenue go UP. 65% in Denver is perfectly fine if your nightly rate is competitive. Focus on revenue per available night (RevPAN), not occupancy. PriceLabs (https://pricelabs.co) dashboard shows this metric clearly.
Reply by David Okafor:
I was obsessed with getting to 90% occupancy when I started. I ran a pricing experiment: raised my rate 20% and watched occupancy drop from 85% to 72%. My monthly revenue went UP by $400 and I had 4 fewer turnovers (saving $480 in cleaning). Net improvement: $880/month from working LESS. The sweet spot for my market (beach town in FL): 65-75% occupancy. Any higher and I'm leaving money on the table.