This March, a common concern surfaced for Evolve homeowners: If guests weren’t traveling, how could they still earn rental income? The months that followed brought many unpredictable moments. One thing many of us at Evolve wouldn’t have predicted was the complete turnaround in bookings — and an unexpected speedy recovery during a time when nearly every other industry was down. Come June 2020, our gross booking value was up 60% compared to last year. You might be wondering why.
Well for one, guests are seeking out private vacation rentals right now. When they stay with Evolve, they depend on arriving at a place that’s professionally cleaned and safe. We give them a way to return to the vacations and people they love with an added layer of confidence.
But there’s another big factor at play here that’s less obvious on the surface — our in-house pricing algorithm, SmartRates.
Every day, SmartRates works hard behind the scenes and analyzes billions of data points (yes, billions) to make sure our owners are always earning as much as possible with pricing that is still approachable to guests. When it came to COVID-19, SmartRates was just the tool we needed to make sense of all the rapid changes in the market — and adjust prices accordingly, in real time.
Here are just a few of the many things SmartRates tracks:
Overall Demand: SmartRates detects changes in the market demand and adjusts nightly rates accordingly, never dipping below the nightly minimum.
Seasonality: SmartRates accounts for seasonal occupancy trends in the area, decreasing nightly rates during “off season,” and increasing them in “peak season.”
Last-Minute Bookings: If demand is low and the competition is high, SmartRates will reduce nightly rates (again, never dipping below the minimum).
Current Trends: We adjust our prices based on current trends. Right now, guests are looking for private, more remote properties.
Similar Properties: SmartRates assesses how homes with similar amenities and bedroom counts are priced and makes sure our homes are priced competitively.
Check out the SmartRates page on our website to learn more about how this tool gives our homeowners a leading edge.
Once SmartRates gathers the data, our teams step in to make sense of it and help our owners earn more. During COVID-19, Evolve’s regional revenue experts were able to use learnings from SmartRates that made the difference between a sustained slump in the market to Evolve having one of our brightest spring seasons yet and getting ahead of the recovery.
In March, when stay-at-home orders were suddenly put in place and traveler demand drastically decreased, we made the decision to reduce our rates across the board. SmartRates allowed us to make swift adjustments and turn down the rates on several markets at the same time.
SmartRates in March
Many homeowners outside of Evolve stayed at their normal rates at the start of COVID-19, while Evolve dipped our rates down in anticipation of market changes. This led us to convert at much higher rates than the marketplace at large, and thus rank higher in searches. Pulling down our prices by an average of 15% in March was one of the best decisions we’ve made for our homeowners, as these conversions continue to help our listings rank higher on websites like Airbnb and Vrbo — which has led to a record number of bookings at higher rates for the summer season.
SmartRates in April
Come April, guests had their eye on booking future trips and planning ahead as a way of daydreaming. They were in search of homes with pools and private recreation centers in more remote places that fit into the new world of social distancing. They also wanted larger homes with areas to spread out and relax, as many of the activities they might normally do while traveling remained closed. SmartRates helped us quickly find the places most likely to perform based on the larger trends we had assessed and raise the prices on those homes.
SmartRates in May and June
The strategy we set up at the beginning of COVID-19 has paid off enormously. The high conversions for March and April help us continue to top search results, and now we’re in the prime spot to raise rates, because in many cases, we’re offering just the kind of travel that guests are trying to find. The week of 6/21, for example, our rates were 17% higher year over year. And compared to the rest of the market, Evolve homes received 30% more bookings on average.
As always, our goal during COVID-19 has been to follow what the market is doing and position our owners to succeed — and it was exciting to see this same strategy work during one of the biggest challenges the travel industry has faced.
The process of setting rates is intricate — which is exactly why homeowners trust us to set their rates for them. Prices change every day and that’s normal and planned — all the more reason no one person could ever keep up.
We only earn money when our owners do, so our interest lies in both of us earning as much as possible. There’s no way a single homeowner, even versed in the business, could research over a billion data points and then carefully analyze everything that might be affecting the numbers. To do this would be more than a full-time job — and that’s the last thing we want to put on their shoulders when we’re trying to make vacation rental easy for everyone.
If you’re thinking about partnering with Evolve and have questions about this or any other aspect of managing your rental property, feel free to see if you qualify for Evolve’s services to learn more. There’s no pressure at all and we genuinely want to help you if we can.