Airbnb Vacation Rental KPIs: The Top Metrics to Track

What is the secret to becoming a successful property manager? The success of property management depends greatly on being able to articulate one's approach at the same time being resourceful. To ensure that all property managers are consistently diligent in their performance, having deep knowledge of the business and having the capability to make current and proactive decisions are also key factors.

You may wonder how you can make informed decisions, stay on top of things as well as run a successful business along with the activities you need to meet the demands of your day-to-day obligations. Sounds daunting? Allow us to guide you through the maze and help you understand the process for better success!

To make informed business decisions and drive the success of your vacation rental property management business, you could track a number of key performance indicators (KPIs). In order to shed clarity on this topic, we will discuss the following

__- What are vacation rental performance metrics? __

- How Can Measuring Key Performance Indicators Help You Manage Your Property better?

- What are the Top Metrics to track for a successful Airbnb?

What are Vacation Rental Key Performance Metrics?

A Key Performance Indicator (KPI) is a measurable value that shows how effectively a business achieves key business objectives.

Vacation rental key performance metrics allow you to track the status of specific processes that are important to hosts and property managers. There are several key performance indicators (KPIs) that will show you if you are still on track to meet the goals of your rental business. These tools also enable evidence-based comparisons over time, making it easier to achieve goals and long-term improvements to better benefit your vacation rental business.

How Can Measuring Key Performance Indicators Help You Manage Your Property better?

No matter your business size or plans to scale, it’s important to stay on top of your vacation rental business. If you're a property manager, you should always know how you stack up against your past performance as well as your competition. One good way to do this is by tracking the number of property management KPIs, or key performance indicators.

You may wonder, how can key performance metrics help you to manage your property better? Vacation rental metrics can be used to provide measurable values that can help you, as a property manager, to measure your performance and progress so you can make informed decisions and achieve your business objectives. Furthermore, with the right information, you will gain insights into identifying and comprehending market trends, as well as finding solutions to any problems that may arise within the business.

These metrics are crucial so that you can make decisions based on facts rather than based on emotions or personal feelings.

The Top Metrics to Track for the Success of your Airbnb

Following key metrics help in keeping track of your finances and overcoming major obstacles, and identifying any issues that need to be rectified in your vacation rental business process. So let’s take a look at some of the top metrics you should start tracking for your vacation rental.

1. Occupancy rate

The occupancy rate of a vacation rental is the number of days that a property is rented out by guests during a specific period of time.

__The Calculation: __

Number of booked nights ÷ Number of available nights

__Example: __

You rented your property out for 21 nights out of a 30 day month. 21÷ 30 = 70%

Your occupancy rate for the specified time period (Month) would be 70%.

Pro Tip: Compare your occupancy rate to your area's average occupancy rate. This will give you an indication of your performance as well as your pricing strategy. This may mean that your rates are too low if it exceeds the average for your area.

2. Average Daily Rate (ADR)

This is a key metric that shows the average rate per property. The average daily rate of a vacation rental represents the daily revenue that a rented room or property can earn.

__The Calculation: __

Average Daily Rate = Total bookings revenue / total number of nights booked

You can keep track of this metric for each year, quarter or season.

Side note: While it is a good indicator of what you can earn, it is not completely accurate because it does not account for expenses such as taxes.

3. Average Length of Stay (ALOS)

This metric displays the average number of nights booked by a single guest.

This reveals the number of consecutive nights that a single occupant booked your property. The average length of stay is critical to monitor because too many short stays can raise your operating costs and make your venture less profitable.

__The Calculation: __

ALOS = Total number of nights booked ÷ Total number of different guest bookings.

4. RevPAR - Revenue per available room

The term "revenue per available room" refers to the amount of money made per available room. It calculates how much revenue your units generate based on your average daily rate and occupancy rate.

This is an excellent metric for gaining an overview of business performance and increasing revenue. This metric is essential for every host because it provides a comprehensive picture of how you are performing financially.

__The Calculation: __

RevPAR = Gross rental revenue / Total no of available rentals for the specific period ( you would like to assess)

OR

RevPAR = Average daily rate x Occupancy rate

5. Net Operating Income

The revenue earned by a property after deducting operating expenses is known as net operating income (NOI). It's an important metric to examine your vacation rental profitability, which can be improved by lowering your operating costs. You can use this calculation to review and re-adjust your business model as seen necessary to your needs.

__The Calculation: __

Net Operating Income = Gross Income - Operating expenses

Example:

Your rental income is $150,000 and your overall expenses including cleaner fees, maintenance repairs fees, insurance, property management costs, and taxes equal $75,000. NOI = $100,000 – $75,000 = $75,000

6. Revenue per Property

Hosts and property managers in charge of multiple properties must understand how much each one generates. By calculating the revenue per property, you can determine which properties are the most cost-effective.

The Calculation:

Revenue per property = Gross rental revenue / Total number of available properties for the specific period

7. Total Revenue for All Your Vacation Rentals

Your total revenue is the sum of all reservations made during a given time period. This data can assist you in determining how much profit you might be able to make in the future.

__The Calculation: __

Add up all the costs that your guests paid (nightly rates, cleaning fee, taxes, etc.).

8. Revenue per channel

If you list your properties on sites like Airbnb, VRBO, and Booking.com, as well as have your own direct booking website, it's critical to track your rental revenue per channel.

All of these platforms require time and energy, so by analyzing the revenue generated by them through a channel manager, you can make more informed decisions and better allocate your time.

__The Calculation: __

View your earnings on all OTAs and vacation rental software to compare them.

Pro Tip: Looking at a graph or pie chart will be helpful to see the dynamics and contribution to understanding where you are making the most money and which areas need improvisation or change.

This metric is also useful for determining year-on-year trends and helps you in forecasting for the future.

9. Inquiry-to-booking conversion rate

While receiving inquiries is great, they are useless if they do not convert into bookings. This metric would be extremely useful for staying on track with your conversion rate as well as determining whether you are converting enough inquiries into bookings.

__The Calculation: __

Inquiry-to-booking conversion rate = Number of inquiries received x total number of bookings for the said property

Pro Tip: If your inquiry-to-booking conversion rate is low, it could mean that you are taking too long to respond, or that your property simply does not meet guest expectations.

10. Average response time to an inquiry

To maintain your response rate, you need to respond to inquiries within a minimum of 24 hours. Moreover, it is one of the key ranking factors on any platform and this is applicable even when it is your direct booking site as well as any other social media platform. This is also a contributing factor when applying for superhost status on Airbnb.

__The Calculation: __

Average response time to an inquiry = add up the time it took to respond to all your different inquiries / the total number of inquiries you received.

Tools to track your KPIs

It's important to know what KPIs are and the impact these KPIs can have on your business - but, you need to begin tracking these metrics to get an accurate read on your business. This will require some assistance to understand what tools can help you with these tasks.

These are some of the important tools we recommend for your progression:

1. Spreadsheets

Spreadsheets are one of the simplest tools to make use of and are cost-effective too. You can keep track of all your Airbnb metrics by using a dedicated KPI spreadsheet with several tabs for each metric. Spreadsheets have several tools within the app you can use as well, but you will need to be familiar with using them.

In contrast, maintaining heavy data spreadsheets can be tedious since it is necessary to assign time as well as input everything manually; to ensure that it is up-to-date with the most recent measurements.

2. Airbnb reporting

Airbnb also provides some reporting options. It is essentially an updated version of the Performance tab. While it does not provide all of the key operational metrics, it does provide some useful insights:

1. Quality This section contains seven metrics. This section contains information about the accuracy of your listing, amenities, check-in, cleanliness, communication, location, and value.

2. Occupancy rates This section includes four metrics that will help you better understand your revenue. You can find information about your occupancy rate, cancellation rate, length of stay, and nightly rate in this section.

3. Conversion You can find information about your booking conversion, booking lead time, returning guests, and wishlist additions in this section.

4. Earnings This is where you can see how much money you've made from bookings and cleaning fees.

5. Superhost Airbnb's reporting features will also tell you how you rank in the company's Superhost program. You'll find information about your current status and what you need to do to meet the Superhost requirements here.

6. Cleaning In terms of cleaning, you will find information about the cleanliness of your property as well as the earnings you have made by charging cleaning fees. The cleaning section is reserved for resources such as checklists to assist you.

3. Vacation Rentals Software

Vacation rental software that provides comprehensive reporting capabilities can be an incredible resource for hosts as well as property managers.

When you have easy access to data, you can make more informed decisions quickly and adjust your strategies accordingly. Additionally, automating your hosting tasks will result in a significant improvement in all of your KPIs.

Ready to find out how Hostaway can transform your business?

However, you decide to move forward, before diving in headfirst and tracking all of these vacation rental metrics and KPIs at once, start by picking a few from each category. Above all else, remember to take advantage of the most valuable and powerful tool you could invest in which is vacation rental software and other useful tools that will help you to scale your business and increase revenue.

At Hostaway we offer an all-in-one solution in vacation rental software for property managers, with the flexibility of the most advanced solutions while being easy to use. One of the key features includes Reports and Analytics. Hostway’s Analytics & Reporting gives property managers valuable insights into their business.

You stand to gain comprehensive customizable reports for your key performance indicators along with the industry's most powerful analytics and reporting tools, built on years of experience and best practices from short-term rentals, vacation rentals, and hotels.

If you're curious about how your gross margins or occupancy rates compare to industry norms, we've got the team and the tools to help you succeed! Get In touch today and schedule a demo call at your preferred time with one of our product experts to receive actionable advice and discover how Hostaway can fit your property management business & unlock growth potentials for you.