Booking Lead Time for Short Term Rental Occupancy Targets for US Virgin Islands

A 2 bedroom on St Thomas Island in the USVI that had been for sale:

https://www.zillow.com/homedetails/68-Lovenlund-Est-L-Saint-Thomas-VI-00802/2059252459_zpid/

After we get things sorted, like the full analysis and due diligence (12.5% tax on St Thomas!), then the USVI Short Term Rental A license for an extra $65/yr, then get it furnished, we’re ready to set the pricing and occupancy targets.

Here, we’re going to go over our occupancy targets.

Set the occupancy targets for each month.

When we set targets, we want to look at what’s happened in a market. And for that, we need data, like AirDNA. We’ve got an Enterprise account, which is helpful in a lot of ways, plus a really nice US dashboard access that lets us chop the information in a lot of ways.

I’ve trimmed out all the high nightly rate beachfront places – as this place is inland a bit – and I’m left with an occupancy rate goal for each month.

I see that July last year had a 62% occupancy (31 * .62 = ~19 days) which can become my target for this year. If I’d like to be a bit more conservative or aggressive, I can add or subtract 5% from the average, which adds or subtracts about a day from the target, depending on my goals or philosophy to hit RevPAR.

When to get booked with lead time

Next, I’m looking at booking lead time. This is what helps me decide when I want to get July’s 19 days target booked. Will they all happen in July? Or should I expect them in June? Or February?

Let’s see.

This market is pretty flat compared to some markets.

For example, Destin, FL:

I wouldn’t want to book February the same way I book for July here.

With my filters set to match my property type, I can export this data and easily add this to my targeting.

The math of booking lead time

Personally I still combine the 0-6 & 7-14, which always puts me aiming for all of my bookings (here, 19 days) getting hit somewhere within two weeks to go.

Looking at my market for example, I want 18% of my bookings (19 * .18 = 3.4 nights) to happen by the time I hit 90 days to go. Usually I’ll start paying attention closely with about 180 days to go.

By the time we hit 60 days to the end of July, we should have 18%+10% (5.4 nights). With 30 days to go, we should have 8.8 nights and start aiming for 11.7 nights, and so on.

It’s a gradual (or steep) climb to full occupancy depending on the month you’re aiming for and month we’re in.

Exporting data and finding the numbers

Excel can easily help you determine these numbers from your export here.

After exporting, we can add some simple formulas. Here’s the pacing data for USVI St Thomas 2 bedrooms in this area with the export (col B-H) and the math of the percentage booked up to that day for that month:

Then, you can keep it all in a big spreadsheet. You can keep track of your targets and current place in them each time you get a booking.

The reason most investors fail at pricing

The mistake everyone makes in pricing – and the reason people fail – is because they don’t pay attention to this. They start to worry about July in June. And that’s obviously a huge mistake, because as we can see, by June half of all bookings that will occur have already occurred.

If you’re empty because you priced too high, you’re in a scramble to drop prices last minute to catch the minority percentage of bookings that are going to occur.

Your goal is to ride the Wave of Demand™ leading up to it. You’ll be in much better shape financially (and mentally).

If your bookings have dried up, get with me about a pricing audit for your property, where we’ll dig into your listing, calendar, and pricing strategy, and create a new plan going forward to begin hitting your occupancy goals.