Operating a successful short term rental property requires staying on top of key performance metrics. Without understanding the critical numbers that drive your specific local rental market, it’s impossible to optimize pricing, occupancy and ultimately your bottom line.

As an experienced vacation rental owner, you need to have these key data points at your fingertips. Knowing where your property stands relative to historical averages, the competition and current trends is crucial for making smart business decisions.

Here are the 6 critical numbers every STR owner should know or be able to quickly find:

1. Average Monthly Occupancy Rate

The occupancy rate indicates the percentage of days your property is booked each month. Tracking occupancy shows how demand fluctuates seasonally in your location.

For example, a beach town may see 95%+ occupancy in peak summer months. But plunge to 55% in the winter off-season.

Compare your monthly occupancy to local averages to see if you are over or underperforming. If your rates are too high for shoulder seasons, you may lag behind the norm.

Measuring occupancy over time also shows the impact of bigger events like COVID-19. Knowing the averages helps put your own numbers in perspective.

2. Average Nightly Rate Range

The average nightly rate for similar rentals shows what guests are willing to pay. Checking rate ranges on Airbnb and VRBO for properties like yours (size, amenities, location) reveals the market’s pricing.

If your rates are above or below comparable listings, you can adjust accordingly. There may be valid reasons for disparities, like extra features or better views. But big gaps indicate your pricing needs recalibration.

You also need to watch shifts in the average rates over time. If the market rate drops 10% from last year, you likely need to adjust your prices down too.

3. Rate Adjustments

Average rates are a baseline - but your property may deserve a premium or discount. Unique amenities, upgrades, location perks or restrictions call for rate adjustments.

For example, add 10-20% for:

- Hot tubs, pools, or game rooms

- Oceanfront or scenic views

- Brand new furnishings and remodels

- Walkability to major attractions

Take 10-20% off for:

- Noisy locations like highways

- Dated decor and amenities

- Lack of a/c, parking, or dishwasher

- Strict pet or smoking policies

Be realistic about how much your property merits in premiums or discounts compared to the average. Don’t overprice and scare off renters.

4. Booking Window

The booking window is the average number of days in advance guests book an STR in your area.

Some markets like vacation spots see most bookings 60-90 days out. While urban city rentals may be booked only a few weeks ahead.

Tracking your booking window helps optimize pricing for maximum occupancy. If bookings slow down 30 days out, you may need to lower rates to attract last minute travelers.

Sudden shortening of the window can indicate external events like COVID-19 uncertainty. Knowledge of averages provides useful perspective.

5. Market Segment

Most vacation rental markets can be divided into tiers based on factors like size, amenities, location, age and price. Common tiers are: Budget, Economy, Midscale, Upscale and Luxury.

Identify which segment your particular property fits into. This allows better comparison against true comps instead of inappropriate apples-to-oranges.

Don’t expect a dated economy home to achieve luxury pricing. But it may outperform other homes in its lower tier. Benchmark against your specific peer group.

6. Annual Projections

Crunching the numbers on past year’s performance provides annual occupancy, RevPAR and gross rental income projections.

Factor in seasonality, upcoming events, and market conditions to forecast next year’s potential performance. This gives revenue goals to aim for through pricing strategies.

Track rental income month-by-month and year-to-date against your annual projections. Shortfalls indicate when you may need to adjust rates or marketing to get back on track.

Why These Metrics Matter

Knowing the critical numbers for your specific property type allows you to objectively gauge performance and make decisions. Without understanding the market context, you’re just guessing based on emotions and assumptions.

For example, you may feel June bookings are terribly low. But if you check the averages, you see your occupancy is actually normal for the seasonal shoulder month.

Or your gross rental income could be up 5% year-over-year. But if your market tier is up 15%, then you are lagging competitors.

Metrics also prevent knee-jerk reactions to regular fluctuations. A 10% occupancy drop from August to September seems alarming in isolation - but may just reflect typical seasonal declines between peak summer and fall.

Keeping Up With the Numbers

Savvy STR owners have a system to monitor key metrics constantly across dynamic markets.

Track on a calendar: Mark occupancy rates, RevPAR, total income and other KPIs on a physical or digital calendar to visibly see trends over time.

Update projections: Re-run revenue projections quarterly factoring in new data, events and conditions.

Review reports: Most STR tools provide reporting on bookings, occupancy, rates and more - analyze frequently.

Compare to averages: Check your local vacation rental association or Visit Organization for monthly and annual occupancy rate and RevPAR averages.

Google the competition: Search Airbnb, VRBO and other sites for comparable rentals to check their rates, reviews and availability.

Talk to neighbors: Connect with other STR owners nearby to share numbers and see what they’re experiencing.

Conclusion

The short term rental market fluctuates seasonally, reacts to events, and shifts across years. Savvy owners stay on top of the critical occupancy rate, RevPAR, booking window and pricing data points for properties like theirs in their specific locale.

Crunching the numbers provides an objective view of true performance against local averages. Without this market context, you can’t make informed business decisions or determine if poor performance reflects a problem or just normal swings.

Monitor your key metrics consistently, and keep pace with changes in the averages. This allows you to spot red flags early and adjust pricing, marketing and strategy to optimize bookings, occupancy and rental income.