Optimising Short-Stay Income
One of the many perks of short-term rentals is the ability to charge higher average daily rates around key periods, such as events, school holidays, long weekends and seasonal changes, writes Eric Hammond.
2 October 2023
Seasonality Is Key
Optimising your average daily rates (ADRs) throughout the year is central to maximising short-term rental profits and one of the differentiating factors between short and long-term renting. Seasonality plays one of the biggest roles in booking demand and increasing returns. Like the travel industry as a whole, short-stays experience peak revenue months based on seasonal demand. Alongside big name sporting matches, concerts, and various other events that go hand-in-hand with warmer weather, November through to Easter is particularly lucrative. The upcoming school and university holidays paired with the many public holidays in between will be key drivers.
AirDNA, a leading data source for Airbnb and Vrbo, ranks the previous December, January and February as the top three months in the wider Auckland market from the past year. December achieved an ADR of $306, followed by $310 in January and $290 in February. In comparison, when the cold weather blew in for winter, the wider Auckland market sat at a lower rate of $224 for June. The Stay Hub achieved significantly higher ADRs over the same periods, highlighting the incremental revenue owners can achieve through professional management. In December, our ADR sat at $382 across all property types, $348 in January and $374 per night in February.
New Zealand is renowned for its warm summers, beautiful environment, and sandy beaches. Combined with its urban city experience, this makes places like Auckland a tourism go-to when summer hits. While the wider Auckland region can achieve high occupancy and profitable returns year-round, when summer is ushered in, areas in and around Auckland’s coast become even more attractive and can achieve higher ADRs than the CBD. According to AirDNA, average daily rates in Downtown Auckland sat at $271 in January this year. Comparatively, on the Eastern coast, St Heilers took in an ADR of $345, Kohimarama sat at $317, and Glendowie achieved $409. This highlights the demand for short-stays outside Auckland’s CBD. While city centre apartments are lucrative, rates around the coast not only have the demand, but often feature more bedrooms as well as beach amenities, driving higher incremental gains.
To capitalise on financial gains during sunny weather, prep your property accordingly. Invest in sun loungers, BBQs, and, for more upmarket properties, additional amenities such as a hot tub always works a treat and commands a higher premium. It’s also a good idea to check your amenities are in good working order. A property management company can put a routine maintenance plan in place to ensure regular cleaning and service checks are carried out.
Flocks Of Crowds
Summer also means an influx of events. The bigger the city, the more there is happening, therefore the more people there are travelling. As key revenue drivers, events can double or even triple nightly rates based on increased demand.
For domestic travel, international concerts draw in flocks of crowds. Some of the biggest upcoming events for peak season will be the Foo Fighters in January and Pink’s Summer Carnival tour at Eden Park in March 2024. Events can supplement demand in the cooler seasons as well. Despite July being the coldest month of the year, thanks to the FIFA Women’s World Cup, ADRs and occupancy in Auckland this year were higher than your typical July. The Stay Hub saw a +21% increase in rates versus June, achieving an ADR of $253 across all properties and hitting nearly 6,000 booked nights.
A property management company utilises a team of revenue experts to monitor demand, seasons and events, adjusting ADRs on a daily basis and maximising your profits. While joining a company like The Stay Hub can set you up for success from the get-go, it can take time to build a property’s momentum and reputation through positive guest reviews. These alert algorithms for online travel agents such as Airbnb push the ranking of your listing higher. The more stays and reviews you have, the more traction you gain. A professional property management company knows how to fast-track this process, ensuring your earnings are maximised. With spring finally here and summer hot on its heels, now is the time to jump in and capitalise on the summer fun!
All data accurate as of September 2023.
The Stay Hub offers a full range of Airbnb and short-term rental property management services, covering everything from extensive global marketing to hands-on revenue management, guest vetting, cleaning after each stay, and plenty more. We have a technological and data-led approach, with owner and guest experience at the heart of our operations. Visit www.thestayhub.co.nz.