The Revenue Lever Most STR Operators Don’t Know They’re Ignoring

The Revenue Lever Most STR Operators Don’t Know They’re Ignoring https://arrival.vrma.org/Blog/the-revenue-lever-most-str-operators-dont-know-theyre-ignoring

Jasper Ribbers, co-founder of Freewyld Foundry, argues that approximately 95% of short-term rental (STR) operators fail to use "pacing" effectively. Pacing is measured via the Market Penetration Index (MPI), calculated by dividing an operator's forward occupancy by the total market occupancy. Ribbers suggests that operators often focus too heavily on last-minute bookings, missing out on "early bookers" (special occasion travelers who are less price-sensitive) and "middle bookers." By overpricing far-out dates, operators often enter a cycle of panic-discounting as stay dates approach, which destroys RevPAR.

Ignoring pacing leads to missed revenue during the early booking window and reduced search visibility on platforms like Airbnb. "The lower you expect final market occupancy to be, the higher you want your MPI," Ribbers notes. This strategy ensures that properties maintain booking momentum, which signals quality to OTA algorithms. Proper pacing allows operators to capture bookings at healthier rates across a wider window rather than competing in a race to the bottom 14 days before a check-in.

• The MPI Formula: Your Forward Occupancy / Market Forward Occupancy.
• High Season Strategy: Aim for an MPI of 80% to 100%. If demand is high, you can afford to pace slightly behind the market to capture premium rates later.
• Low Season Strategy: Aim for an MPI of 150% to 200%+. In low demand periods, securing occupancy early is more vital than holding out for a specific rate.
• Review Cadence: Track MPI and "pickup" (the number of new bookings, not total nights or revenue) weekly.
• Adjustment Thresholds: Make small, intentional price changes of 5% to 10% rather than drastic 30% shifts.
• Market Warning: The "far-out premium" (e.g., pricing future dates 20% higher by default) is often ineffective in the current flat or declining market environment.

This brief highlights a critical transition in STR management: moving from "set-and-forget" dynamic pricing to active pacing management. For technology vendors, there is a clear opportunity to develop more intuitive MPI dashboards that contextualize internal performance against real-time market data. Operators should realize that automated pricing tools are only as good as the strategy behind them; if a tool is set with outdated premiums from the 2021-2022 travel boom, it may be actively harming the property's booking window and OTA ranking.

https://arrival.vrma.org/Blog/the-revenue-lever-most-str-operators-dont-know-theyre-ignoring