Download the full transcript PDF.

[00:00:00] Sarah: Hello, listeners. Welcome back from another great week. My name is Sarah Karakaian.

[00:00:03] Annette: I’m Annette Grant. And together we’re–

[00:00:05] Both Annette & Sarah: Thanks for Visiting. 

[00:00:06] Sarah: Let’s kick off this episode like we do every week, and that is sharing one of you, our amazing listeners, who’s using our hashtag on Instagram. It’s #STRShareSunday. We’ll share you here in the podcast, on our Instagram channel on Sundays, to our entire email list. Annette, who are we celebrating this week?

[00:00:22] Annette: This week, we are sharing @littlecoveaframe. Again, that’s @littlecoveaframe. And I want to highlight something that I was wowed by in this property. Sarah walked in for us to record this podcast, and I was like–

[00:00:40] Sarah: Look, look, look.

[00:00:41] Annette: No. I’m like, I want an a-frame. I want to buy a-frame. Their loft area, please take a look at it. They have an alternative to bunk beds, which I think is just genius and can work for children, for teens, for tweens, for adults. It is a loft with four single beds. And what I love about it is they each have their own little nook. They’re built-in beds, and they have a reading lamp and a little shelf to keep your essentials within reach per their feed.

[00:01:12] It is so well done. And also, another highlight to this loft is they have a projector screen over the windows that pulls down, so all of the guests in that upstairs could have a movie night. I’m thinking they maybe had kids in mind with this, but this is so well done. I see there’s hooks in between the beds for whether it be they have a backpack and some binoculars. But if it’s for towels, or coats, or swimsuits, this is just so well designed.

[00:01:43] I want to give them a shout out there on that. And then the whole rest of the house is just so impressive. Take a look at their feed. I haven’t seen a Instagram feed this aesthetically pleasing in a long time. The view to the water is amazing. They are new to hosting, so let’s give them a little bit of love.

[00:02:04] And their logo, Little Cove, is inside a-frame. It’s really well done, but please take a look at that loft built-in beds. I just think that that is next-level design and thoughtfulness, not only for the guests, but also for your turnover team, so they’re not having to hike up there in bunk beds and try to change the sheets. All right, Little Cove A-Frame. Well done. We can’t wait to highlight one of you next, so please use our #STRShareSunday. 

[00:02:36] Sarah: Woo-hoo. Okay.

[00:02:38] Annette: Speaking of a-frames–

[00:02:40] Sarah: Yeah, I love how– of course you guys all know. Maybe you don’t know, but we have Colleen, who is on our team, and she is crushing, making sure STR Share somehow aligns with the episode that week.

[00:02:49] Well done, Colleen. We see you on that. But yeah, this week we have, on the podcast, a really interesting story, listeners. Monique DeLorenzo is a host of a QQQ A-Frame, the Vermont A-Frame, which, if you want to check out her a-frame, it is in our show notes.

[00:03:06] But like so many other hosts we actually know, she also works for a short-term rental industry brand solution. So she works for Price Labs. She was a host first, and then wanted to dive all in on the industry, which I think is so special. She’s a solutions consultant with Price Labs, a revenue management tool for hosts and property managers that provides users with data-driven, dynamic pricing and powerful market insights.

[00:03:33] So if you’ve heard of dynamic pricing, Price Labs offers that solution. It’s actually who we use in our business. Monique began her career in various sales position, but found her passion in the vacation rental industry after becoming a host herself. In this episode, we brought Monique on. I feverishly emailed her right at that point when Airbnb released their winter release, and all that chatter was going out around removing the cleaning fee and having to bake it into your nightly rate. I was like, Monique, what are you hearing at Price labs?

[00:04:06] Annette: Mm-hmm.

[00:04:06] Sarah: Do you have a direct connection with Airbnb? What is going on with the short-term stay cleaning pricing, the long-term stay cleaning pricing, removing it all together. We need it from you guys because you are all day pricing all the time. And we cannot wait to share with you what Monique shared with us in this interview. Annette, what was your favorite part?

[00:04:27] Annette: Oh, there’s so many favorite parts. I just think that it’s an exercise of continuing to stay on top of the reason you’re hosting, and it really is revenue, and that it can become easier with time, and there are tools out there that will help you if you give them the chance.

[00:04:48] Sarah: How about that bomb tip she left at the very very end?

[00:04:51] Annette: You got to stick around to the end because there are so many different philosophies on making money on your cleaning. Some people actually have to pay extra for their cleaning. Monique gives a tip at the end that is really innovative, something that you can– I think this is the thing, is that with Price Labs, there’s so many things that you can automate, and we also have all transparency. 

[00:05:16] We have our affiliate link in the show notes, and we have a offer for you from Price Labs. If you haven’t used them yet, take them up, especially here at the beginning of the year. And I think another thing that just blew my mind is that Price Labs does daily– yes, I am saying this– webinars for their users live, so you can ask your question. And they have 24/7 support Monday through Friday. So it’s a no-brainer to use them and let them help you with your pricing.

[00:05:44] Sarah: Monique, welcome to the show.

[00:05:46] Monique: Thanks for having me.

[00:05:49] Annette: We need to tell the listeners that this is a full-circle moment that I think you are one of our first people that we would go back and forth with on Instagram, one of the first a-frames we followed as Thanks for Visiting. So it is really full circle that you’re now on the show as a team member of Price Labs.

[00:06:11] You were at our conference this fall. We’ve actually seen you a couple of times this fall at the conference circuit. But let’s get into your story about your a-frame first and your history with short-term rentals, and then segue into you becoming a team member of Price Labs, and then we’re going to dig into some pricing.

[00:06:32] Monique: Yeah, let’s do it. I do feel like this has been a long time coming because my husband and I, when we first got into the industry, the Thanks for Visiting podcast was one of the first ones that we came across, and then we started following you on Instagram, and then back and forth, and you guys were one of our first Instagram “friends”.

[00:06:49] We still consider you guys such, so it’s really fun. It’s really exciting to be making these in-person connections that we’ve made over the last few months after so many years of talking just on the internet. So yeah, a little bit of background about how I got started in the industry.

[00:07:08] It was early 2018, and my husband and I were both working our typical 9 to 5’s office jobs. Very monotonous. Love the stability of an office job. I won’t knock on that, but it just left something to be desired. And we’re both very outdoorsy people. We love the mountains. We love nature.

[00:07:30] We like hiking. He loved skiing, and I learned to love skiing, and now I’m obsessed with skiing. And it started as like, doesn’t everyone browse Zillow with their partners and just be like, oh, look at this house? How cool is this? And it started that way, and we were sending each other real estate listings in Vermont.

[00:07:51] We had gone the summer before together, and it was maybe my first time that I was there with him, and I fell in love with it. So we start sending each other listings, and you start coming up with these ideas, and we were like, well, maybe if we rented on the weekends, we’d be able to keep this as a place for ourselves to get away.

[00:08:15] And one thing led to another, and within three months we were under contract on the a-frame. We had a pretty strict criteria of what we were looking for in terms of the size of the house, the budget that we were getting trying to stay within, and the amount of effort that it was going to take to get up and running.

[00:08:34] Because Vermont’s about four hours away from us. We’re located in New Jersey. We found a place that checked off almost every single one of our boxes, and we closed at the end of the summer. By mid-October, we were hosting our first guests. I did not think that we would have achieved everything that we have in those five years.

[00:08:57] We have a small-ish, but really engaged following on Instagram. We have had dozens of repeat guests. We have made a community of other a-frame hosts. We’ve made a community with people like yourselves that run podcasts and informational sources for hosts.

[00:09:14] We’ve built a website. We have direct booking. The amount that we’ve accomplished within five years between the marketing and the following that we’ve created, it really feels like we’ve created a community, whereas we went into it really thinking that it was just something that would help us offset the cost of the mortgage.

[00:09:31] Annette: I love it.

[00:09:33] Monique: I was proven wrong very quickly. So it was pretty much within the first six months of hosting that we realized that, okay, this could actually be something. And five years later, here we are.

[00:09:46] Annette: Tell our followers right now, if they’re sitting at home, how they can connect with you via Instagram right now so they can see while they’re listening.

[00:09:55] Monique: Yeah. Our Instagram handle is @thevermontaframe. So just all one word, no symbols, no underscores. Our website is thevermontaframe.com. You can find us, Monique and Jason Pomeroy, as well. That’s definitely the best way to keep up with what’s going on a-frame wise in our life.

[00:10:12] Annette: I have one last question about this specific property. Was a-frame on that must have list? Were you like, a-frame or bust?

[00:10:22] Monique: Sort of. The first property that we really fell in love with was an a-frame. And I was like, oh my God, how cute is this? Look at how sweet it is. And it ended up not being the house that we got. It is a house that is a short-term rental now, which is really funny. I think that the people that own that house are really sweet.

[00:10:39] It’s super cute, and it’s not that far from us, an absolute must have. We just wanted something that felt like a true cabin in the woods, something that didn’t feel like out of place. We live in a Cape Cod in New Jersey, and if you were to put a Cape Cod on a side street on the mountains in Vermont, not that there’s anything wrong with that, but it wasn’t the vibe that we were going for.

[00:11:06] I really, really, really wanted it to be an a-frame, though. The final three places, it was two a-frames and one log cabin. But I was really hellbent on the a-frame, even though it wasn’t actually one of our must haves.

[00:11:20] Sarah: I love it. I also love– this is like just sticking out to me– how you don’t have to have 15 properties in order for you to make this really significant in your life and to make a big life change for your family, that you’ve really gone all in on this property and created that impactful community.

[00:11:38] It’s just a really cool accomplishment. Talk to us now about how the heck Price Labs came into this because I, unlike Annette, did not make the connection at first. Vermont A-frame and you at Price Labs were two different human beings until Annette connected the dots for me. I thought you were this pricing scientist lady who was crushing it in that world.

[00:11:59] Annette: No, she’s the Vermont A-frame. Come on.

[00:12:01] Sarah: Yeah. And I was like, what do you mean? Worlds were colliding. And Annette and I know a couple of other people in our community, in our world who started working for brands in the industry, so I’m sure our listeners are really interested in how you were able to make this newfound passion into a full-time career that doesn’t necessarily involve the A-frame. The A-frame is a part of life.

[00:12:23] Annette: But so complimentary to–

[00:12:24] Sarah: But so complimentary. How’d do that?

[00:12:27] Monique: Yeah. I think for the first several years of hosting at the a-frame and running everything behind the scenes, I was still working at that office job or a different office job at that point, I believe. And I just was not passionate about it. It was bare minimum. It’s not always fun working for someone else.

[00:12:48] There were some perks to it. It was close to home. They were nice people. But giving yourself 110% towards someone else chasing their dreams isn’t exactly my idea of satisfying. So on the back end, I just started putting more and more effort into the a-frame, and eventually, I left that office job.

[00:13:13] And they were restructuring. They decided to outsource some of the work that I was doing, and my husband and I stepped back, and we were like, we need to take this as a sign. I can’t just jump back into something that isn’t going to fulfill me. So let’s take inventory of where we’re at in our lives and what we’re really passionate about.

[00:13:35] It took about six months for me to really hone in on what I wanted to do, and I never, in my wildest dreams, thought that the hospitality industry in general was where I would end up. I was never a waitress. I was never a hostess, never a bartender.

[00:13:52] Annette: Oh girl, you got to get out there. It’s fun.

[00:14:01] Monique: Even though I’m a social person, I’m a personable person, and I really like connecting with people, that just wasn’t where I was at. And when he suggested the idea of like, you’re really good with everything a-frame-related, why don’t you try to break into this industry?

[00:14:19] We have some family that’s in the industry, not short-term rentals specifically, but hotels. I had some experience with them, and I was like, okay, I’ll give it a shot. And I went into it with no real direction other than the guidance of thinking about what companies have we worked with ourselves specifically that I think have been beneficial to our growth? And dynamic pricing was the first software that we implemented. It was before we used a PMS, before Instagram was the only other–

[00:14:58] Annette: Part of your techstack. 

[00:15:00] Monique: Piece. Yeah, Instagram was our tech stack. Love it. And then that was the first thing we signed up for, and I was like, this was a really important piece of the puzzle in making us successful.

[00:15:15] And one thing led to another, and Price Labs is who we’ve been using for the last two years now, I want to say. I saw a job opening that looked like it would be good for me, and I just went for it. And it was honestly the second job that I applied to.

[00:15:32] Annette: No. 

[00:15:33] Sarah: I love it.

[00:15:34] So Annette and I have been champions of dynamic pricing since I discovered it– you know what I mean– years ago. And it’s like, wow, this really works and helps you. We always say Airbnb’s Smart Pricing looks out for Airbnb, as it should. And so it just makes sense that we should get something that is not related to a third party.

[00:15:54] And when I discovered Price Labs, it was like, okay this is not my area of expertise, looking at data and analyzing market trends. It’s not something I enjoy doing, but I knew that I had to figure it out if I was going to be successful for myself and my clients. And so I want our listeners to hear from you because while this isn’t necessarily a Price Labs episode because you do want to get to the core of what’s going on right now with pricing within Airbnb, but really quickly, I want you to share.

[00:16:25] You have one property, and you saw success using a third party dynamic pricing software, Price Labs, and then of course decided that you wanted to work for the company. So talk to our listeners out there who have 1, 2, 3 properties about that, it being your number one piece of tech that made a difference for you because I think they need to hear it from someone who is so excited about the success that they started to work for the company. What great way to– 

[00:16:53] Annette: Testimonial. 

[00:16:54] Sarah: Testimonial. Yeah.

[00:16:56] Monique: Yeah. And there’s actually multiple of us at the company. You can take a look at the website. There’s a profile on the blog highlighting myself, but there’s also several other team members that were users of Price Labs before joining the company. But I think you said it best that you’re not a data expert, but that you saw that there was a need to use data when determining where to set your prices. 

[00:17:20] That’s the beauty of the software in a nutshell, is that you don’t need to be the expert in order to make data-driven decisions on where your pricing should be set up. Let the algorithm, let the software itself do the actual heavy lifting of the analytics, and then take that data in the way that we digest.

[00:17:39] It is very simple and easy to understand, and use it to inform your strategy. There’s nothing worse than going into setting your rates blindly without knowing where the competition stands at the very least, and what your high and low seasons are. If anything else, those are the two biggest things that you will learn off the bat by starting to use dynamic pricing.

[00:18:03] Sarah: I love it. And how about the investment you made pre-work for Price Labs you felt was well worth part of your revenue from the a-frame and put towards Price Labs?

[00:18:14] Monique: It’s $20 a month. 

[00:18:18] Sarah: Yeah.

[00:18:19] Monique: The amount that we made back on that, I wish that I could give you an exact figure on what our ROI was, but we certainly made that back within our first month of using the product.

[00:18:32] Sarah: Yeah. Yeah. And I can attest that too, listeners. It was shocking how much I was able to push my rates at different times of the year that I didn’t even think of it or getting an alert essentially from Price Labs. It was like, hey, you need to know that this is coming, and you are not prepared. Your prices are not in line with what you could be collecting from travelers. So that was really great for us. 

[00:18:55] So can we dive into what’s going on right now and how Price Labs is digesting the information about this whole cleaning fee fiasco with Airbnb because people are wondering, and I know Monique, you and I have talked on email, so obviously this is all still happening/not happening/maybe it’s happening, but at the core of it, users are wondering, do I need to bake my cleaning fee into my nightly rate? 

[00:19:26] And if so, what if my competitors aren’t doing that? Am I going to look inflated? How is Price Labs viewing all of these different changes within Airbnb as of late and how it impacts hosts’ price?

[00:19:42] Monique: Yeah. There’s a couple of different ways that you can approach it. So a couple of months ago, there was that big scare that the cleaning fees were going to be eliminated, that if you didn’t set a cleaning fee for the two-night stay or the one-night stay, that you weren’t going to get any cleaning at all. That it had to be different prices. 

[00:20:03] So when you’re in Price Labs, we actually don’t set your cleaning fee whatsoever. You’re always going to set that on Airbnb. Now, what we can give you is data around where you might want to set that cleaning fee. At the end of the day, we are all running businesses, and cleaning for a short-term rental is different than cleaning for a hotel. 

[00:20:23] For a hotel, you can have staff. You have the same room repeated over and over and over. There is no kitchen. There is typically one bathroom, and there’s maybe one or two beds. The differences between cleaning short-term rentals and hotels, think of the difference in just the short-term rentals that you might be looking at.

[00:20:45] My listing is a two-bedroom, one and a half bath small, about a 1,000 square feet. That is so wildly different than a large four-bedroom home with five bathrooms, a kitchen, and a kitchenette, things like that. So the fact that we would ever be expected to eliminate our cleaning fees entirely is just wild to me, and I do not recommend someone just eliminating it together.

[00:21:14] If you remember, I don’t know if it’s still there because I control everything through a PMS now, maybe you can tell me if it is, but when I first signed up for Airbnb, there used to be a box that you could check off that said, I pay my cleaners a living wage. Do you guys remember that? 

[00:21:31] Sarah: Mm-hmm.

[00:21:31] Monique: Okay. If that is something that is so important that it’s worth calling out to guests, why would the software ever want to fully eliminate a cleaning fee? To me, I would love to see them do what they ended up doing with pet fees and rolling it into the final price. That way, you can still have your cleaning fee set, but it’s the final price that’s displayed to the guests.

[00:21:54] To me, this is where it becomes more of an Airbnb problem versus a problem that the host should have to solve. Now, just because I think of it that way doesn’t mean that it’s something that the host doesn’t actually have to solve because it doesn’t really seem like Airbnb is tackling the whole perception of the cleaning fees, right?

[00:22:14] Sarah: Right.

[00:22:14] Monique: Is this all making sense?

[00:22:15] Annette: Mm-hmm. 

[00:22:15] Sarah: Perfect sense. Yes. 

[00:22:17] Annette: For sure.

[00:22:18] Monique: Okay. So with that being said, as it stands right now, hosts are still able to set their cleaning fees. So how do you determine where your cleaning fees are set? Me personally, we just charge exactly what our cleaner charges us. We don’t need to factor in the additional cost of laundering and whatnot because that’s actually all built into our cleaning fee.

[00:22:42] Other overhead items are built into our nightly rate, like the cost to replace our linens, do a refresh on towels, and sheets, and whatnot. But in terms of the actual cleaning, all of us just pass that charge onto the guests. Now, what we’ve noticed is that when our cleaning fee was actually set at the rate that our cleaner charges us, we were on the higher end of the market.

[00:23:03] And this is actually where Price Labs comes in. We have a tool within our software called Market Dashboards. It is separate from dynamic pricing. You do not need to have a listing to use Market Dashboards. You can pay about $10 a month to get a market dashboard and look at all the information for all of the listings in your area.

[00:23:20] At the bottom of our dashboards, we have an entire section dedicated to fees and amenities. You can filter down that dashboard and look at CompSets in your area. Let’s say you filter it down. I have a two-bedroom place. I’m looking at just two-bedroom listings. I want to know what other two-bedroom listings are charging.

[00:23:40] We will show you that in the dashboard. And not only will we show you that. We’ll show you what percentage of booking the hosts are getting that are charging the cleaning fee relative to the market. So you have your cleaning fee set between 115 and $140. We’ll show you what share of the bookings those hosts are getting. So it really helps you identify quickly on a curve where the most common cleaning fee is set at, and is it reasonable with what the guest expectations are?

[00:24:10] Sarah: Wow, that’s powerful. Does that go across any other amenity that we can charge for on the OTAs, on Airbnb, like pet fees or, I don’t know, linen fees, management fees, resort fees? Are all those visible in Price Labs’ dashboard? 

[00:24:26] Monique: Not quite. It’s harder for us to show those because Airbnb rolls it all in now. So since we’re scraping data that’s publicly available on Airbnb, and since Airbnb doesn’t identify those things as line items anymore, it’s harder for us to identify. What we can show aside from the cleaning fees though are extra guest fees, which is really helpful, we can also show you what amenities other hosts have to offer, that way, you can easily compare where you are at versus the market.

[00:25:03] Sarah: What are your thoughts at Price Labs? And this might be a little bit of a curve ball, so maybe you’re not prepared to answer. That’s okay. But what’s Price Labs talking about with Airbnb now coming out with, they say, early 2024, the ability for an Airbnb user to see what their neighbors are charging for a particular night?

[00:25:21] Do you think that’s as powerful as what Price Labs has to offer? Do you see people, I don’t need any other tech? Airbnb’s giving me everything. I don’t have to partner up with any third party offerings. Everything I need is right here. What are your thoughts on that?

[00:25:38] Monique: We’re already giving you that data. And honestly, if you’re not already using a dynamic pricing tool, you can go find that data yourself manually. The difference is, how difficult is it going to be? Because it starts to become a little tedious when you’re doing annual research like that. We’ve been providing that data.

[00:25:57] I’d be curious to see how do they aggregate it? Are they just showing you line by line, night by night, what other hosts are charging? Because we can do that, but we can also aggregate the data to show you what the 25th to 50th percentile is charging, what the upper 90th percentile is charging. And we can also show you how that fluctuates over time.

[00:26:17] We’ll also show you in our dashboards the rate that people are actually getting booked at, because what your rates are set at versus what people are getting booked at can be very different things. 

[00:26:27] Sarah: Yes.

[00:26:28] Annette: For sure. 

[00:26:29] What do you see as the number one thing when hosts start to use a dynamic pricing software? Is it 90% of them are undercharging? What are some stats that Price Labs does champion of like, look, when a host comes on, 90% of hosts make more money? What are some of those trophy staff that you guys can throw out so hosts know, whether it’s Price Labs or anyone, they should be using a dynamic pricing tool?

[00:26:57] Monique: Yeah, I think number one would be, and I think it goes on both ends of the spectrum, people are either over or undercharging. I guess a better way to describe it is just not charging what the market demands. So knowing where you sit within your market, that’s going to be the first thing that you learn off the bat by looking at sections in Price Labs, such as neighborhood data. 

[00:27:19] I’ll try not to get too technical here within the software because I know not everyone uses it. You might not know what I’m talking about. But yes, that would be the first thing that I would say you could look at. Second thing is looking at where your high and your low seasons are. You probably have an idea what the peak season versus off peak season is. 

[00:27:41] Or if you’re in more of an urban market, you might not actually see seasonality, but you might see differences in demand. So demand and seasonality are two other things that we’ll be able to show you just off the bat by the data that we’re finding in your market. I would say the third thing that a lot of people don’t know to utilize are not just dynamic pricing, but dynamic minimum stays.

[00:28:04] Annette: Oh, okay. So they’re not using dynamic minimum night stays. 

[00:28:10] Monique: Yeah. Let me ask you. When you have your listings, when you first started, did you set a two-night minimum? Three-night minimum?

[00:28:19] It was one night. I turning, burning. I didn’t even know.

[00:28:22] Sarah: She was chaos over here. 

[00:28:24] Annette: I had the same price Monday through Friday. Friday night, Saturday, different. It was one-night stays, there was nothing dynamic about it. 

[00:28:33] Sarah: I was Miss trust no one. You must stay at least three nights in my metro market. Yeah. So both yes and no.

[00:28:43] Monique: Okay. So for both of you, did you find that you either didn’t fill up the calendar because you had a more restrictive minimum stay? Or on the other hand, did you find that people were booking these one-night stays for random weekends, six months out? 

[00:29:00] Annette: Mm-hmm.

[00:29:02] Monique: Okay. 

[00:29:02] Annette: I did change it, though. Over time, I did change it, and I never did less than a– yes, I went to weekend minimums. What was I? Oh boy. That was a rough one. 

[00:29:11] Sarah: We’re okay being vulnerable over here at Thanks for Visiting. 

[00:29:14] Annette: Yeah.

[00:29:15] Monique: This is the perfect example of how you can improve your minimum stay strategy. You never want to eliminate a future guest from being able to book because the minimum stay is too restrictive. But at the same time, you don’t want to risk segmenting your calendar too much to the point where the availability that some people might want isn’t there.

[00:29:37] That’s where the dynamic minimum stays come in. And what we can do is tell you what your default minimum would be based on information that we’re pulling from the market. We’ll give you a suggested default minimum, but then we can also tell you, hey, outside of let’s say 90 days, we’re noticing that people are actually able to book a longer stay. I want to increase your minimum outside of 90 days to a three-night minimum from a two-night minimum.

[00:30:02] Or, on the flip side, as we get closer in, we’re noticing that your typical booking window is about 30 days. And if you’re not booked inside of 30 days, you might want to decrease your minimum to try to scrape up whatever demand is left.

[00:30:16] Annette: Scrape up that demand. You got to get the crumbs. We need them sometimes. 

[00:30:22] Monique: It’s tough out there sometimes.

[00:30:24] Annette: The streets are tough, yeah.

[00:30:25] No, these are facts that’s like, you’ve got to scrape sometimes, for sure, because I think sometimes we do get too stringent, and it’s like, wait, the demand isn’t there. If no one’s booking, no one’s booking. So if someone wants to come for one night, let them in.

[00:30:38] Mm-hmm, with caveats, listeners. You know how we feel about that. So that’s incredible. What else, Monique? Is there any other features that you see hosts being really shocked at when you share it with them? 

[00:30:52] Monique: What isn’t shocking when you first go from using manual pricing to dynamic pricing? People can often be shocked at how high we assume that they’ll be able to raise their rates. 

[00:31:04] Annette: I would agree with you on that.

[00:31:07] Monique: Yeah. And there are guardrails that you can set within Price Labs and any dynamic pricing tool. You can always set your minimum, and you can set your maximum if you choose. I work with people about 50/50 who decide to either set a maximum or not. I always recommend setting your minimum, making sure that you know what your break-even rate is so that you set your minimum price at or near that rate that you’re comfortable with.

[00:31:30] How high the rates can go out further into the future for high demand dates for high seasonality can be a little shocking at first. But what’s nice is that we actually give you the data right there, line by line on your calendar to identify, okay, your seasonality is causing your price to go up by this percent.

[00:31:49] And we’re also noticing an increase in demand. So it’s going up an additional X%, so that’s why we’re getting to this final price. So it’s not like we’re just saying, hey, we’re telling you to do this without any data to back our claims up.

[00:32:04] Annette: Right. And I just want to mention here, as consumers, we are all participating in dynamic pricing on a daily basis. If you’re looking at flights– I know I take Ubers often. The same ride could be $10 to $50 depending on supply we have. 

[00:32:29] Other industries have been using dynamic pricing forever, and I just encourage hosts, if you aren’t using dynamic pricing, why not? Think about all the other industries that are using it. It is second nature to us to not question that. That flight to visit your friend during the fall, it might be three times more expensive in the spring. And we don’t think anything. It’s supply and demand. It’s old school economics.

[00:32:56] So I’m going to go with when we talk to people about dynamic pricing, when you’re saying push the rates, people get in shock of how high the rates could possibly go, and they think they’re not going to get booked. And so I say, be patient with it. The dynamic pricing is there to help you, not hurt you. 

[00:33:15] One question that we get often, and I don’t ever know how to answer this– it is so funny. We get in DMs and also email. Why would I use a dynamic pricing tool? Airbnb has Smart Pricing. Wouldn’t they want me to get booked?

[00:33:30] I want to scream because I’m like, they’re looking out for themselves. Of course, they want you to get booked because they want the calendars booked all day. How would you respond to someone thinking that Smart Pricing is going to– Smart Pricing used to take such a nosedive. I was like, no way. I don’t even want anybody in the property for that price. How should we answer that question eloquently and honestly?

[00:33:57] Monique: Okay, so Smart Pricing is just that, it’s looking out for Airbnb. I know when we first started, Airbnb was the only platform that we were on. So for us, it wasn’t like people could find us on other platforms. But Airbnb doesn’t necessarily know that. So their Smart Pricing is going to drive people to stay on their platform because if a listing is booked on other platforms or has a direct booking website, the host might not lose business. 

[00:34:27] The property manager wouldn’t lose business by having it booked somewhere else, but Airbnb loses the business. They lose that service fee. So if they undercut the same listings pricing compared to where it’s listed, whether it’s on Vrbo, direct booking, Booking.com, Hopper, any of the other OTAs that are out there, they’re just trying to keep the reservation on their platform. So to me, that’s the biggest driver for people not being users of Airbnb’s Smart Pricing tool.

[00:35:01] Annette: Thank you. Now I’m armed with my answer because mine was like, they’re just looking at– it was not as eloquent as that.

[00:35:07] Sarah: I’m just getting mad. 

[00:35:07] Annette: Yeah. One of my final questions is this, Monique. Dynamic pricing and pricing and marketplaces, it sounds, I don’t know, an analytic– 

[00:35:17] Sarah: Analytical.

[00:35:18] Annette: Analytical. But in reality, if someone is in the hosting industry because they love hosting and they love making their property a wow factor for their guests and their travelers, and the five-star reviews, that component, I want to reassure them but from you because you were on both sides, user, and then now you work at Price Labs. How much time– 

[00:35:40] Sarah: Mm, great question.

[00:35:42] Annette: Do you think a successful host who has awesome pricing and an awesome revenue management strategy, how much time do you think they should expect to be inside of Price Labs on a weekly basis, monthly, wherever you want to take us?

[00:35:56] Monique: Okay. So I think the initial setup and getting to understand the system is always going to take a little bit longer. Just because it’s something new, it’s unfamiliar. You want to make sure that you understand how all the features work. You want to make sure that your base price is set correctly, that you have your minimum stays set up correctly.

[00:36:13] So for that, I would say, probably a couple of hours within the first week, we have webinars that are really wonderful. We have a basics webinar that goes over everything you’ll need to go to get your listing properly set up. We run that Monday through Friday. It’s live on Zoom. It’s usually a very small group.

[00:36:31] You can ask questions one-on-one with– it’s usually myself or someone from the team. So do that webinar, then you set everything up based on what you learn, or you follow along. So a few hours the first week. Within your 30-day, I always recommend just keeping an eye on things every other day, maybe as long as you have it set up properly.

[00:36:51] Once you have your pricing honed in and you feel confident that the forward-looking pricing is looking good, the seasons look correct, we’re raising it where it should be raised, we’re lowering it where it should be lowered, you can then start to focus more on what’s your strategy versus what’s your actual prices.

[00:37:09] And from there, you can probably reduce it to checking your prices maybe once a week. That’s typically where I’m at with myself and my husband. Sometimes I’ll even go two weeks. Right now, we’re about to get into our peak season, so I’m checking it a little more frequently just to see where January and February are shaping up to be.

[00:37:33] During the summer, I usually check every other week, and that’s usually enough for me to spend 30 minutes in there, looking at my forward, looking at the tool that we have in their portfolio analytics that can allow you to benchmark against yourself from previous data. And even just within 30 minutes to 45 minutes, you can infer a lot of information about your own performance.

[00:37:55] Sarah: That’s amazing. So to wrap up, I know you’ve got to head on to– 

[00:37:59] Annette: A webinar.

[00:38:00] Sarah: A webinar for Price Labs and keep educating people on pricing. So we’re going to let you go here. But going back to the original reason why we wanted you on the podcast today, Monique, but everything that’s going on with Airbnb and its pricing structure, it sounds to me like a Price Labs user could show up to one of these webinars, workshops and see like, hey, do I need to change anything to be making sure that I’m taking my piece, the marketplace now that these things are changing?

[00:38:27] Am I being flexible within the price lab software so that it’ll reflect appropriately on Airbnb? Is that the relationship you have with the users so they don’t feel like they’re like, ah, what do I do? I don’t want to lose money. I don’t want to leave money on the table.

[00:38:42] Monique: Yeah, yeah. So we have the webinars recorded on the website. That way, if you need to just listen up and then send an email over to our support team, we have 24/7 support. We also have chat support 24 hours a day, five days a week, so Monday through Friday, where you can get an instant answer.

[00:39:00] So if there’s ever anything that you’re unclear about, you don’t know if you have things set up properly, just email our support team because they typically get back to you within a few hours. 

[00:39:09] Sarah: That’s awesome. 

[00:39:10] Monique: From there, if you’re looking to see where you’re sitting within the market, you may not even need to join one of our webinars. I would look at tools like our neighborhood data tab, which comes right within each dynamic pricing– within each listing, you have a tab for neighborhood data, and that’s specific to each individual listing. You can infer a lot of– if you’re looking at the cleaning fees in particular, you’ll want to use the Market Dashboard.

[00:39:35] We have the webinar for that up on YouTube, and we run that one the first week of every month, and I always forget whether that one’s on Wednesday or Thursday. But if you need us to send it out, you can just ask our support team. We’ll send you the signup link. 

[00:39:50] In terms of, because this is what I do want to cover because it is the one thing that we wanted to talk about, how to actually offset those cleaning fees in a dynamic pricing software, I covered a little while ago about doing a little bit of market research to see where other people are sitting at with their pricing. 

[00:40:09] Let’s say that you’ve determined that the price that other hosts are charging is actually a little bit less than what it actually costs you to clean. And this is the case from my own personal experience. Our cleaning fee is a bit higher than what the market is charging. 

[00:40:23] What I’ve done within Price Labs is I took a look at what the average length of stay is for our guest, which is about, let’s round it down to two. There’s a $30 difference between what we charge and what the average cleaning fee is for a two-bedroom house in our area.

[00:40:44] I’ve added that amount as a pricing offset in Price Labs. So what I did was I took that 30-dollar difference, divided it by two, and I added a 15-dollar nightly offset to our pricing. That way, whatever price Price Labs is pushing, it’ll be an extra $15 to account for that $30 that we’re missing on Airbnb because I’ve then lowered my cleaning fee on Airbnb to be more competitive with the people who are charging a little less.

[00:41:14] Annette: Love that.

[00:41:15] Sarah: That is a hot tip.

[00:41:16] Annette: Yeah.

[00:41:17] Monique: Yeah. 

[00:41:17] Annette: Boom, boom. No, that’s the way to go.

[00:41:22] Sarah: Incredible. All right. We’re going to let you go, Monique. Thank you so much for your time today. Thanks for your insight as a host and as a pricing expert now working at Price Labs. Listeners, if you’re interested in Price Labs, let them know the podcast sent you.

[00:41:35] We definitely want Price Labs to know how much we love them. We use them. We champion what they’re doing for us. We’ll have a link in our show notes. But Monique, thank you so much for sharing your expertise with us today. And we’ll be sure to share all of your information on your property and ways to contact you on Instagram in the show notes as well. So with that, I am Sarah Karakaian.

[00:41:55] Annette: I’m Annette Grant. And we are– 

[00:41:57] Both Annette & Sarah: Thanks for Visiting.

[00:41:58] Sarah: Talk to you next time.