Building CompSets

Unleashing the Power of Short-Term Rental Comparable Sets

In the dynamic and ever-evolving world of Short-Term Rentals (STR), it's essential for property managers to stay ahead of the game. Understanding the performance of properties and setting the right prices are crucial for earning your owners more revenue. One effective tool that can help you achieve this is building Short-Term Rental Comparable Sets (CompSets). Compsets allow you to benchmark your property against similar listings, enabling you to track performance, gain market insights and make informed pricing decisions. In this article, we'll delve into the importance of comparable sets and how they can benefit property managers.

Why Comparable Sets Matter:

Comparable Sets, also known as comp sets, are groups of short-term rental properties that share similar characteristics, such as location, size, amenities, and guest capacity etc. These sets provide valuable insights into market trends, demand patterns, and competitive positioning. Here's why comparable sets matter:

• Performance Tracking: By analyzing the performance metrics of comparable properties, you can gauge how your rental is performing in terms of occupancy rates, average daily rates (ADR), revenue, and guest reviews. This data helps you identify areas for improvement and optimize your property's performance.

• Competitive Analysis: CompSets allow you to compare your property against similar listings in your area. This analysis enables you to understand how your property stacks up against the competition, identify unique selling points, and make informed adjustments to your marketing and guest experience strategies.

• Pricing Optimization: Setting the right price for your rental is crucial for maximizing revenue and staying competitive. By analyzing the pricing patterns of properties in your comp set, you can align your rates with market trends, adjust pricing strategies based on demand fluctuations, and ensure that you're offering a competitive price for the value you provide.

Building an Effective Comparable Set

To create a robust and accurate comp set, follow these steps:

• Define Your Market: Start by identifying your target property and the geographical area you want to focus on. Consider factors such as neighborhood, proximity to attractions, and target guest demographic to ensure relevance.

• Choose Comparable Properties: Select properties that closely match your rental in terms of key attributes such as property type, size, number of bedrooms, amenities, and guest capacity. Ensure that the listings you include in your set are representative of your market segment. Think like a guest, how are they searching for properties and what do they take into account when filtering and comparing. Not sure your are unbiased, ask a family member to talk through searching for a property for a trip. 

• Gather Data: Collect relevant data on each property in your comp set. This may include occupancy rates, ADR, revenue, guest reviews, and booking patterns. Utilize industry tools, marketplaces, and property management software to streamline this process. We believe the more granular you can go on data, the more flexibility you have on analysis and insights you can reveil. Want to learn everything we can capture for your analysis? Speak to an expert! 

• Analyze and Compare: Once you have gathered the necessary data, analyze it to identify trends, patterns, and benchmarks. Compare your property's performance against the average metrics of the comparable set to gain valuable insights into your property's strengths and areas for improvement. Take note of booking patterns such as Length of Stay by seasons, booking window by season, ADR captured, week day and weekend pricing differential, compare the shape of the pricing curve, look at amenities your property may be missing and how the market values them etc. 

Tools for Building and Utilizing Comparable Sets

To simplify the process of building and utilizing comparable sets, consider leveraging technology and dedicated tools. Here are a few tools that can help:

• Data Analytics Platforms: Utilize data analytics platforms specifically designed for the short-term rental industry. These platforms offer comprehensive data on market trends, performance metrics, and competitor analysis, enabling you to make data-driven decisions. There are a number of analytics tools out there, or if you feel comfortable enough you can leverage Business Intellegence (BI) solutions, Excel, Machine Learning or different modeling techniques to pull out insights. 

• Pricing Tools: Explore pricing tools that utilize machine learning algorithms to analyze market demand, competition, and other factors to recommend optimal pricing strategies. These tools can save time, maximize revenue, and ensure competitive pricing. You can either use your CompSet data to manage the pricing tool, or to build your own pricing tools entirely. We are always happy to nerd out on pricing technology and development, or if you need help we offer pricing coefficients and CompSelection via API. Just reach out! 

• Owner Reporting and Insights: Really show your value and expertise to your owners by showing how they are performing against their CompSet, that you track against the CompSet, and insights on how to improve their property to stand out. Owners are busy enough as it is, so by bringing them new ideas and recommendations to improve their property is a value add. 

• Owner Prospecting: Show off your expertise by providing real world data, insights and valuable information to prospects so they know they will be working with an expert if they sign up with you.  

Building and utilizing Short-Term Rental (STR) comparable sets (CompSets) is a valuable practice for property managers aiming to stay ahead and comes with huge rewards. You should be able to quickly identify opportunities to earn a great Return on Investment (ROI) with your CompSet data. That ROI can come in the form out increased revenue performance, increased conversion and lower guest acquisition costs, increased owner retention, increased conversion rates with new prospects and more. 

Curious how to get your hands on some CompSet Data? Speak to an expert today and we will get you started!