Revenue Management Lessons (Ep 601)

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In this episode of “Get Paid for Your Pad,” I want to start by wishing everyone a happy Thanksgiving holiday. As I prepare for my own Thanksgiving getaway to Mexico's Valle de Guadalupe wine country, I'm excited to share insights on a crucial topic: discounts in revenue management.

As some of you might know, I've been deeply involved in revenue management for Freewyld, the hospitality brand I co-launched. We recently initiated a revenue management course, one of the first in our industry, to help hosts understand this vital aspect better.

The heart of this episode revolves around discounts on Airbnb, a powerful tool for enhancing conversions. Airbnb promotes listings with discounts by incorporating features like strike-through pricing, additional line items in the price breakdown, and eye-catching callouts. These features make listings more appealing to potential guests.
I discuss various discount strategies, including early bird and last-minute discounts, emphasizing their potential benefits. Length of stay discounts, often known as weekly and monthly discounts, are also crucial in encouraging longer bookings. I dive into the nuances of these discounts and their impact on guest conversions.

Moreover, I explain how hosts can set up custom promotions to provide extra incentives for potential guests. These customized promotions can be a valuable addition to your pricing strategy.

Towards the end of the episode, I introduce a special Black Friday promotion. We're offering an incredible bundle deal that includes lifetime access to my programs, Casual Mastery and Legends X, along with 90 days of access to the Rising Star Mastermind.

It's a fantastic opportunity to access these valuable resources at a discounted rate.
In summary, this episode provides a deep dive into the significance of discounts in revenue management on Airbnb. I share practical insights and strategies to help hosts optimize their listings and attract more bookings through effective discounting. Don't miss out on our exciting Black Friday bundle deal, where you can access these valuable programs and resources at a discounted rate.

Before we wrap up today's episode, remember to connect with us on Instagram @getpaidforyourpad for exclusive content and behind-the-scenes moments, and don't forget to hit that ‘Subscribe' button on our YouTube channel for even more great content. We appreciate your support, and can't wait to see you on our socials. Stay tuned, and keep being awesome!

Jasper Ribbers (00:01.254)
What is up, everybody? Welcome to Get Paid for Your Pad, episode 601. Today is Thanksgiving Day. So I want to start by wishing everybody a happy Thanksgiving holiday. Today's first day, when you're listening to this, it might be Friday or Saturday. But I'm about to head off to Mexico for the weekend. Me and my wife and our little dog were actually going to Valle de Guadalupe, which is the wine.

country in Mexico. There's about 100 wineries down there, which I didn't know. And since I live in San Diego, we can literally take an Uber to the border. We can cross the border into Mexico, rent a car at Tijuana Airport, and we're going to spend four or five days driving around the wine country, checking out some wineries, having some wine. So literally looking forward to it. There's also a lot of really great food I heard in this region. So we are going to spend a couple of days

made some reservations at some pretty awesome restaurants. So super excited to take a few days off. But before I leave for Mexico, of course, wanted to get a podcast in for the Friday. And today I'm going to talk about discounts. Just going to be talking about discounts. I probably don't have enough time, actually. I might do another one on Monday. But discounting is a big topic.

Uh, and you know, recently, if you've been following this podcast, then you probably know that, uh, I've been really focusing on revenue management, right? Because for free wild, our, uh, hospitality brand that Eric and I just launched a couple of weeks ago, uh, my main role in their company is going to be the revenue management. Now, as of right now, we just launched, we only have four properties online. Um, but as we're going to be expanding, uh, I'm going to be solely focused on revenue management.

Right now, I have to wear multiple hats as our team, Freewell team is still fairly small. So I'm wearing multiple hats, but eventually I want to focus solely on the revenue management side. Also, I think it was about five or six weeks ago, we actually launched a revenue management course. I think this is really the first course in our industry that really focuses on revenue management. And we had a couple dozen students that signed up for it.

Jasper Ribbers (02:23.05)
And I've been working with these students over the last six weeks to help them set up their pricing tool, create a real revenue management strategy, create the rhythms every day, every week, every month. What are we looking at? What data do we need to look at to really make informed decisions about our pricing strategy? How do we make informed decisions to change our prices on a daily, weekly, and monthly basis? What kind of data do we need to be looking at? And through this process,

both on the free outside and also through the cashflow mastery. And I'm just learning a lot, not just learning new things for my own revenue management strategy, but I'm also kind of learning what our students are doing, what mistakes they're making, and also things that they are not aware of that you can do as part of your revenue management strategy that I think is very beneficial. And so I want to cover today, I want to cover

a number of these things and this all has to do with discounts. Discounting is a very broad topic actually within revenue management because there's a lot of stuff that you can do. Of course, you might have a discount set up as your strategy in your revenue management and your pricing tool. For example, a lot of people have like a 20, maybe 30% last minute discount that typically

be spread out of the last 30 days or so. So if somebody wants to book 28 days out, they might get a 2% discount. If they book 15 days out, it might be a 10 or a 15. And this is something that you can set up in your pricing tool that if you're using a pricing tool, you probably have something similar set up. But today, what I really want to talk about is not so much the pricing that's part of your pricing strategy in your pricing tool, but more the

things that we can do on Airbnb to get some additional benefits. OK? So I'm not talking about giving a discount when somebody reached out to you and sending them a special offer, for example, right? That's something that you can do. We typically don't do that. I don't really like giving out discounts, individual discounts to people when they reach out. Because when people reach out for a discount, they're typically not going to be the most enjoyable guest.

Jasper Ribbers (04:51.386)
For my experience, and besides that, we have a very specific pricing strategy set up. So there's a reason behind why the prices are as they are. And so we didn't really see a reason to give additional discounts to people just because they asked for it. Now, there's one exception. We do provide discounts to our past guests. So we send out emails.

to our past guests and give them special deals. We'll give them 10% or 15%, 20% off for certain dates. And we use that as a tool to fill up our calendar. And the reason that we do provide these discounts to our past guests is because these past guests, they've already stayed with us. And it was a great experience for both us and the guests, because otherwise they wouldn't be on our email list. And

It's like when somebody's already stayed with you, then they already know the property, so you get fewer questions. And they've already stayed with you. If it was a great experience, they're probably not going to cause any problems. So they're like a lower risk guest, really. And also, you want to create some loyalty with your past guests, right? So giving your past guests a discount makes a lot of sense. Obviously, you see this in all sorts of industries.

the airline industry, the hotel industry, there's all these, you know, whatever you buy, even if I buy at 7-Eleven, there's a rewards program, you know, there's a loyalty rewards program pretty much everywhere. So it makes sense to give your loyal customers a better price, right? But today what I really wanna focus on is the discounts that you can set on Airbnb itself. And there's some benefits that you can get from that.

Airbnb really wants us to provide discounts, because they want to be an affordable platform. And also, they want to convert more. They want to convert more viewers into bookers. And they have a number of tools that will increase that conversion. And discounts is a big part of that. Because obviously, when you apply a discount, the price is going to go down.

Jasper Ribbers (07:09.054)
Airbnb has a few features. For example, they do four things to help you increase your conversion when you add a discount on Airbnb. Number one is you get an extra line item in the price breakdown. So let's say you have a long stay discount. Let's say it's a weekly long stay discount of 10%. And if somebody searches for a week in your calendar,

You get an actual line item in the price breakdown that says like weekly discount of X amount of dollars. Number two is they can also do the strike through on the Airbnb price. So you'll see like what the original price was and then you see that strike through and then you'll see like the actual price. So these are two things. Then the third thing is Airbnb will add, sometimes they will add a call out underneath

the price breakdown. I'm going to share my screen in a few minutes here. So if you're watching on YouTube, you can actually see what this looks like. But the call out is the third kind of promotional tool that Airbnb will give you. And then the fourth one is they'll send out emails to their customer base to promote your listing. And whether these four benefits apply also depends on the amount of the discount.

And I've also noticed that it doesn't always make sense, the logic. So sometimes you think that you're going to get it, but you don't get it. Obviously, the emails, we don't know, because we can't really see if Airbnb is going to send them out. But the strike through and the call out and the extra line item, those are the three things that you can test. So you can set a discount and see if it actually shows up. But what Airbnb says is that if your discount is at least 10%

then you get the strike through and you get the actual line item. If it's 15% or more, you get the call out. And then if it's 20% or more, you also get the email. But I've noticed that logic is not always valid. So I'm actually going to share my screen. If you're watching on YouTube, you'll be able to see it. If you're not watching on YouTube, then I'll do my best to explain it over audio. But.

Jasper Ribbers (09:34.31)
But yeah, I've noticed that a lot of hosts are not aware of this functionality. OK, so let's see. I'm going to share my screen here. 12 seconds.

OK, there we go. Boom. All right, so we have our listings here on Airbnb. So first of all, I want to explain where you can actually set these discounts, because a lot of people are not aware of that. So what you want to do is you want to go to your dashboard, and then you want to click on Calendar. And if you sign up for the new Airbnb layout, then this might already be different, because I've noticed that in some markets,

the new listing setup inside Airbnb has already been updated. I was talking to a host who has listings in Puerto Rico, but he lives in San Francisco. And his complete layout of the Airbnb has already been updated. But ours is still the old version. So anyway, so the way to find these discount settings is you go to Calendar. And then you have to click on one of your listings.

And then if you're using a pricing tool, you probably get a pop-up that says your settings are limited. You can edit all pricing availability settings in your property management software or your pricing tool. In my case, it says property management software. And that's actually an important point to mention before I dive into this. Depending on your PMS, you might be able to set certain discounts inside of your PMS or even in your pricing app. For example,

We use a long stay discounts and we can only set that up inside Airbnb. But if we'd had a different PMS, then we might have been able to set it up in price laps. And I've noticed this is very dependent on your PMS and what pricing tool you're using, where you should be setting these discounts. So that's just something to keep in mind. Make sure you understand.

Jasper Ribbers (11:47.446)
where to set up these discounts if you have to do it in your pricing tool or your PMS or straight on Airbnb. So in our case, we're using Pricelabs and Hostfully. So in our case, a lot of these discounts, we have to do it directly on Airbnb, okay? All right, so after you click on the listing, now you see on the right side, you see there's a vertical column where it says pricing and it says availability.

At the top, it says base price, then it says custom weekend price. Now, for us, the source of truth there is in price lab. So it doesn't matter what's on Airbnb there. It's going to take the price from price labs. But below that, you'll see there is a section that says discounts. There are a number of discounts that you can set. There's the long stay discounts. They have the weekly, and they have the monthly. So as you can see, we have it set at 13%

weekly discount, and we have a monthly of 20%. And then below that, there's a button that says More Discounts. If you click on that, you'll see there's a whole bunch of other discounts that you can set. For example, you can set the early bird discount. So you could say, hey, X amount of months before arrival, we're going to give you a discount. And now I know that most people actually do the opposite. Most people will add a premium to far out bookings.

Um, but, um, but you know, it's kind of interesting because you could, for example, you could set a 10% premium, uh, on let's say bookings that are free months or more out and then you're a pricing tool, but then you go on Airbnb and you can set a 10% early bird discount. So then the two discounts can, the premium and discount cancel each other out. But what's nice is then you actually, you get that, uh, you get that, uh, those benefits, those, those four benefits that I mentioned.

You might get some of them. So you might get a strike through, or you might get an extra line item that might help conversion, even though the price technically stays the same. Anyway, so you can do the early bird discount. You can do a last minute discount as well. So you could say any amount of days between 1 and 28 before arrival, you can set a discount. You can't do the gradual discount, though. You can do it in price labs and probably

Jasper Ribbers (14:11.742)
other tools as well, where you could, as I mentioned, you could say, hey, I wanna do like 20% discount for the last 30 days, but you want it to be gradual. So the higher, the fewer the days before checking, the higher the discount. But on Airbnb, you could just set, I could, for example, I could say like, hey, 10 days before arrival, we'll do like a 5%, right? But then you could add, I think you could add, but you could add as many as you want. So you could kind of.

layer, you could say like, oh, 10 days for arrival, it's this, 15 days is that. So you can add as many as you want. And then if you do that, so for example, let me see. Well, let me walk you through the other discounts first. So you can add as many early bird and last minute discounts as you want. Then the next one is trip length discount. So this is generally more commonly known as length of stay discounts.

A lot of hosts have a weekly and a monthly, but you can actually set a free, you can even do like a two night discount. So for us, we have it, as you can see, if you're watching, you can see it here. We have like 5% for a free night stay, 7% for four nights stay, 9% for five nights stay, 11% for six nights, and then 13 for a week, and then 15 for two weeks.

17 for three weeks and then 24 monthly stays. Now in our market, we never get these longer stays. So it doesn't really matter, but it makes sense. From my perspective, it makes sense. We want to encourage people to book the longer stays. So it makes sense to give them not just a weekly and a monthly, but even like a free night stay. We'd rather have somebody book a free night than a two night. So we want to encourage people to do that. Now the question is, is that 5% really going to matter for a free night versus two nights?

I don't know, I mean, small discount, but here's the beauty of it. So I'm going to go into our calendar now on Airbnb and select a free night's day. And ta-da, as you can see, you now get a little line item that says long stay discount. And I think that will, that might help with the conversion because if people, people will love getting discounts, right?

Jasper Ribbers (16:30.25)
So somebody looks at our listing and puts in a free night's day, and they see, oh, we're getting a discount. I think that might increase the chance that they're actually going to book that stay. Also, when they see that, people might think, oh, well, what's going to happen if we stay four nights? So they might go on our calendar, and they might play around with it. People are flexible, and they'll see, oh, if we book four nights, we get a bigger discount. Because our discounts go up.

for every night. Now, as you can see, we don't see the strike through here. But we do have the call out, even though our discount is less than 20% and Airbnb says that, or less than 15%, Airbnb says that the call out only applies for 15% and 20% discounts. But sometimes it shows up anyway. So that's why I was saying, it doesn't always make sense. So I highly recommend.

Go into your Airbnb listing and play around with these discounts and then just see how does it actually show up on the guest side. Now let me select a week here. Let me just go to February because then our calendar is empty, so it's easy to select the dates. So if I select a week, now it says weekly stay discount. And now we have the strike through here at the top. So.

It says instead of 4.26, the price is now 3.54. And also, and we have the call out, this is a rare find. Freewell's place is usually fully booked. So yeah, it's kind of interesting that we're still getting those call outs. But it seems like no matter what we do, we always get a call out. If I do free nights, now I suddenly get to strike through for different dates. I get to strike through, and sometimes you don't get to strike through. It's so random.

But now it doesn't give me the additional line item on the price breakdown. But it does give me the call out. So anyway, my point is you want to experiment with these discounts. One thing that you have to be very careful with, and this happened to a number of students that I've been working with, sometimes when you, if you apply multiple discounts, sometimes Airbnb will

Jasper Ribbers (18:55.55)
will only apply in one. So for example, somebody in our mastermind, he, what he was doing is like, he had, he raised his prices on this pricing tool. And then he added like a custom promotion for all of his dates to counter that price increase to get these benefits that I've been talking about, right?

I was talking to him and I showed him like how we were setting up these long stay discounts and he was like, Oh, that's cool. Let me, you know, let me, let me implement that too. And then he implemented it. But then suddenly a couple of days later, he was like, Holy crap, my, my prices have gone up by a lot and it turned out that the setting up the long stay discounts actually was canceling out the custom promotion. So you have to be a little careful with that. Um, but let me show you how to set up that.

that custom price promotion. So underneath the longest stay discounts and the last minute and the early birds, there's another section that says promotions. Now, if you click on the custom promotion tab, Airbnb will then ask you to select certain dates. And I've noticed you can only set up a promotion for the next three months. So as you can see on my calendar here, like February 21st and onwards is blocked out.

So we'll select some dates here. So let me select February 6 to 13. And we're going to add a custom promotion. And when you do that, now you can see what kind of benefits you get from Airbnb. Because it will give you a sliding bar where you can select the discounts. And then it will show you which of those four benefits you get. So if I put it at 10%

Then it says, oh, you get a new line item on your price breakdown and you get to strike through. But then if I move it up to 15, then I get a special call out. And then if I move it up to 20 or more, then it's placement and emails to guests. All right. So let me, let me set it at a 20% for those dates. And now I want to see, I want to see what happens on the, on our, on the guest side here.

Jasper Ribbers (21:17.962)
So I've added this promotion for the 13th until the 20th. So let me select that entire week. So I'm selecting the 13th to the 20th. And now it basically shows me the same thing as before, because I also have that weekly discount. So now, yeah, there's that promotion, but there's also the weekly discount of 13%. And what I'm noticing now is that it's not actually applying that 20% promo discount.

it's actually applying our 13% weekly discount. So that's why it's kind of tricky. You really have to trial and error and kind of test different things out. Because Airbnb, when you go into the help section, it says, oh, if you have multiple discounts, we'll apply all of them. So it should be on top of each other. So in this case, the client should get the weekly discount and the promotion, but they're only getting the weekly.

But if I select different dates, now I'm going to select the 14th to the 17th. Again, it's just applying the long stay discount. We select some other dates as well. I'm going to go 16 to 19. Yeah, so now it's only giving me the long stay discount. It's not giving me the strike through. And it is giving me the call out.

So again, it doesn't really make sense.

Um, 60, 13, let me, uh, wait, let me try this. Oh, I was, I was adding the wrong dates. Okay. Let me try again. So seven to 10. Yeah. So it's not, uh, still not applying that custom promotion. So, so when you set up these discounts, um, just make sure check if it's actually, if it's actually working out, I might have to remove those long, long stay discounts and then apply the custom promotions were actually, uh,

Jasper Ribbers (23:22.082)
to actually get that custom promotion to work. But I really like the long stay discounts. It's something that we implemented recently. And yeah, I feel like it helps with conversion. But I'm going to need a little bit more time and a little bit more data to really see what the effect is, of course. But yeah, it's definitely very interesting.

to dive into these discounts. And also, I know that this is a big deal for Airbnb, these discounts. So I do really believe that when you have some sort of discount set up in Airbnb, like I think it helps with conversions, the strike through and the actual line item, I also have a suspicion that Airbnb is probably going to give you better visibility in the search results as well if you apply these discounts. So go ahead.

Check it out. Again, make sure that you check out the documentation in your PMS if you want to apply some of these discounts, because you might have to set it in your pricing tool or on your PMS or directly on Airbnb. All right, so I'm going to keep it at, I'm going to, how do you say that? I'm going to, well, basically I'm going to.

wrap up this podcast, and I'm going to pack my bag, and we're going to jump in an Uber, go to the border with Mexico, and we're going to have some fun in Mexican wine country. I'll do another podcast on this topic. I'll talk about some other type of discounts that we are using. For example, we're playing around with the gaps, the orphan nights. We're playing around with the adjacent days. So you could also set.

uh, discounts, like if somebody books an adjacent day, because obviously like we want to, like, we have like a five night gap in our calendar or something. We'd rather have people book the free nights that are adjacent to, uh, to one side of the, of the calendar gap versus like booking the free night, free nights in between, right? So there's a lot of, there's a lot of cool stuff you can do to kind of optimize your calendar and give people incentives to book the dates that you would.

Jasper Ribbers (25:43.926)
that you prefer them to book, right? So that's it for today. Last but not least, I also wanna mention that, of course it's Black Friday today and everyone's giving out giant discounts and promotions. I've been getting hundreds of emails from all sorts of companies offering all sorts of great deals. And Eric and I actually had our offsite last week.

which we do, we try to do this every quarter where we go somewhere and we shut down everything that we do on a regular on a day to day basis and we're just thinking high level on the strategy for our business. We did this last week, both for FreeWild and also for overnight success. And one thing that we discussed was like, we've never really done like a Black Friday promo. Like everyone does that. And we were thinking, you know what?

Let's do a killer Black Friday promo. Let's put something really, really cool together for the community, especially for the people who know about our programs. I'm sure if you've listened to this podcast for a while, then you know we've got Legends X. We recently launched the Casual Mastery. We've done other programs in the past as well. But as of right now, the main programs that we have is Legends X, Casual Mastery. And then we have our Mastermind as well.

our rising stars, Masterminds, where we have about 50 or so operators in that Masterminds, which is awesome. Because every week we do a call, we get guest speakers into the calls to teach us different things. We have a Slack community where we can talk to each other on a daily basis. So it's a pretty powerful community. But anyway, we thought, you know what? Like for Black Friday, we're going to create a bundle.

It's so that we've never done this before, but we thought, what wouldn't it be cool if we can just offer like all these free programs as a promotion, uh, all at once for people that have been, have been listening and being on the fence, maybe in the past of like, let me, should I join legends X or not, you know, you've been on the fence, you will, you know, it's a powerful program, you know, there's hundreds of students have gone through it who have been getting amazing results that we're very proud of. But for whatever reason, maybe you couldn't afford it.

Jasper Ribbers (28:01.29)
Wasn't the right time or whatever it is. Well, now is the time. We're now giving you a crazy Black Friday bundle where you can literally, for a very affordable price, you can get all three of the programs. So Casual Mastery and Legends X and Rising Star Mastermind. The Casual Mastery and Legends X for a lifetime. So you'll never have to buy another course again. Pretty much covers everything you want to know.

But then also we're giving you 90 days of the inside of our mastermind as well. It's pretty cool because we've recorded every single training that we've done the last, I don't know, like three, four years, we've recorded every single training that we've done and we probably have over a hundred trainings in there that we have recorded that you can get direct access to if you join the mastermind. So it's not just like the 90 days, like the weekly calls that we have and the

the daily connection with us, but also with all the other companies. You'll also be able to literally have all the trainings that we've done in the past. So it's pretty cool, I think, what we put together. So anyway, long story short, I created a pretty link, getpaidforyourpad.com slash Black Friday. So getpaidforyourpad.com slash Black Friday. No dashes, no nothing, just Black Friday. And that's where you can find our special bundle

Black Friday offer. So I'm really excited about this. I mean, if you really want to grow your business, pretty much a no-brainer in my opinion, of course. I mean, we're the ones who are selling it. So we're obviously very confident about our own products. But anyway, yeah, go check it out. This offer is valid until November 29. So we're giving you guys a few days to check it out, consider it. But then November 29 is the last day.

that will be available. And also we did put a limit on it because obviously there's quite a lot of fulfillment that comes along with these free programs. So yeah, we can't have a limited amount of people join. So we did put a limit on it. You'll see on the page how many are still available. So with that said, I hope you enjoy your Thanksgiving holiday. And I'll be back on Monday with another podcast. I'll cover some other.

Jasper Ribbers (30:26.326)
Strategies within the revenue management that we recently started trying out So I'll see you next time