How do you predict the future? When it comes to the world of serviced apartments and co-living, historic data has proven a reliable oracle. Operators could project occupancy levels throughout the year thanks to what happened in previous years. Operators could analyse previous lead times and travel trends to make wise investments. Operators could examine prior ADR levels to make smart pricing decisions and accurate revenue forecasts.
In short, harnessing past data has been the key to successful revenue management. Then along came a coronavirus.
Past no longer helps the present
Covid-19 not only exposed the innovative living market to its greatest ever shock, but it also exposed the lack of real-time market data available to companies. Operators could no longer rely on past experience, historical performance and market trends to ensure they get the best return from their units. There was no data from previous pandemics to fall back on.
In an era where analytics are vital for all businesses, what can serviced apartment and co-living companies do? Focus on the now, focus on themselves.
Focus on the now
From lockdowns and Covid windows to travel restrictions and tier systems, the coronavirus situation is rapidly-evolving and so is its impact on the accommodation market. Operators therefore need to analyse their performance in real-time and frequently update their revenue strategy.
For example, operators should gauge their current lead times and set prices accordingly. If guests are booking three days ahead instead of three months, what’s the point in offering prices far in advance? April might historically be a high occupancy month for an operator, but April 2021 could be in a coronavirus window (higher demand, higher prices) or third lockdown (lower demand, lower prices).
Focus on your business
Previously, gauging market-wide competitor data helped ensure you found the right price points for your units. But, with industry data lagging behind and competitor data unreliable due to various Covid factors, operators need to focus on their internal data. What guest trends have you seen in the past week? What booking channels are performing for you? What occupancy levels do you need to break even?
If you find that guests are prioritising cleanliness, for instance, then make sure your cleaning protocols are front and centre of your booking site. You may even be able to charge more for cleaning fees as people are willing to pay for the added security.
How to successfully use data during a pandemic
- Set up a dedicated team. PropTech might generate valuable data, but you need people to interpret it and make decisions accordingly. Operators should put together a data team and divide responsibilities.
- Choose metrics. What are the most important metrics that affect your performance - is it occupancy levels, ADR, monthly revenue, lead times, book-to-show rates, pick-up, forecasts? Deciding what you need will help you determine what indicators are required to show this and where best to source the data (e.g. if your key metrics are lead times and length of stay, you need to examine your channel management).
- Devise KPIs. In order to make sense of what you’re seeing, operators should set KPIs for each of the chosen metrics across various locations. E.g. What % occupancy is needed across long-stay units to de-risk the portfolio?
- Analyse frequently. From daily to at least once per week, operators need to monitor the data and make timely decisions. If you wait too long, the data will expire and you’ll be playing a game a few moves behind (this is where revenue management tools like dynamic pricing and PMS reporting really come into their own).
- Use it wisely. This is not the time for hunches or gut feeling. Operators should use data to regularly make smart decisions. For example, if the data shows your extended stay offering is the least impacted, consider offering discounts and targeting long-stay channels to attract guests. Alternatively, if rates are lower due to medium / long stay, ensure that your costs are streamlined too.
Step 0 - use a PMS
As a baseline step, all innovative living companies should work with a PMS. Accurate, real-time data enhances performance and maximises profits, but producing internal intelligence-led reports tailored to your customers and business can be time-consuming. Well, not any more. At res:harmonics, our advanced dashboard reporting makes it easy to pull custom data from all parts of your business, create detailed and easy-to read reports and give your company an edge over your competitors.