Over the past few weeks, we've begun sitting down with Accelerator members to look back at their first five months with us.

Across the board, one lesson keeps coming up:

Pricing.

More specifically…

1. How to price so that ADR goes up and occupancy goes up with it
2. How to set prices when you don't have a booking history to lean on

So today, I want to walk you through one member who figured it out.

They opened five cabins in April, in a North Carolina mountain town most travelers haven't heard of, with zero booking history.

Like most operators, they priced really cheap on Airbnb to get bookings flowing.

This strategy partially worked.

By late June, their top cabin was carrying the whole property at 90% occupancy. The next best was at 58%.

That’s when they began working with us to get a handle on their revenue management.

Five months in, here's where they are:

• ADR up 20%
• A cabin with a $281 ADR priced at $407 or more for October, with the front of the month already booked at $430
• Three of the five cabins earning about the same each month

And this week I’m sharing 2 lessons on how they got there.

But first, let’s set the scene.

Here's what their first few months looked like:

• Priced to get found. They opened "really, really cheap" and stacked Airbnb promos on top to climb in search.
• Every weekend sold out. 100% of weekends booked from opening day to roughly August 1.
• Weekends booked way too early. High-season weekends averaged a 37-day booking window.

The owners could feel something was off.

On our very first call in April, one of them said,

He was right.

When they first opened, they did almost everything new operators do.

Here’s what they did:

1. Open cheap for traction to fills the calendar fast.
2. Celebrate sold-out weekends as wins
3. Let their pricing tool make all the pricing decisions.
4. Cut prices midweek until a date books even if it barely covers costs

But once they began working with us…

Lesson 1: They raised rates after every booking (and got comfortable with unbooked nights)

In the Accelerator, we don’t just celebrate fully booked weekends.

We celebrate market-leading ADRs.

So, we advise our members to raise the rates for every available comparable weekend.

And to keep going until they don’t sell.

When this member’s cabin missed a weekend at the new rate for the first time, Katarina, who heads up our revenue management, told them why that was ok:

So they kept pushing.

In fact, looking back, they wished they raised rates faster.

After Katarina saw their initial numbers, she advised them to test past $540 on Fridays and Saturdays.

They raised in 10-15% increments, but high season only gave them about six weekends to test.

Lesson 2: Treat weekends and weekdays as two different pricing cohorts.

Here’s Katarina’s first rule of revenue management:

Leave Friday and Saturday out when you think about pricing.

Because for 95% of properties, those are the nights that get booked out most easily, so they need their own logic.

For the North Carolina cabins, they’d already priced in nine bands (three seasons crossed with three parts of the week).

But the gaps between them were significant.

In high season:

• Monday to Wednesday rates sat $50 – $60 lower than Thursday and Sunday
• Thursday and Sunday rates sat another $50 below Friday and Saturday

Amongst the properties we manage, we see high-season Fridays and Saturdays run almost 3-4x the Monday-to-Wednesday rate in a lot of markets.

This means…

If you’re selling out every weekend far in advance, then they’re priced too cheap.

Then there’s midweek.

Our members dropped the price on Monday through Wednesday nights to try to fill those slower days.

It worked for a while and occupancy went up a little, but then it stopped paying off.

Because they booked the rooms at rates that barely covered costs.

This is because…

Chasing the lowest rate is a losing game in shoulder seasons.

Instead, we recommended they price weekday rates below their competitors early.

This captures the midweek demand available, before competitors race to the bottom.

Then they let the rate rise as rooms fill.

Here’s a recap of the 5 months since they began working with us:

• June: one cabin at 90% occupancy, the next best at 58%, high-season weekends listed at $260
• July: ADR up 20%
• September: a little over 60% occupancy across all five cabins (not just one), with most of the empty nights midweek
• October: a cabin with a $281 ADR is now selling for $407 or more, and the beginning of the month is already booked at $430

Basically, in June, one cabin was raking in most of the cash.

By mid-September, three of the five cabins were earning about the same each month, with the other two only around $1,000 behind.

And, they did all of this…

• In year one
• With no booking history
• In a town one of the owners told us is "not a destination today (yet)."

So psyched to see where they go from here.💪

Ben Wolff
Founder, Oasi & Modern Hospitality Accelerator

P.S. This whole breakdown started because the owners posted their numbers in their private channel and asked our team to take a look.

We does these audits with all members in our live sessions inside the Modern Hospitality Accelerator.

​Fill out this 2-minute form to see if the Accelerator makes sense for your property.​