The owner of Mango Sunset BnB Inn at Lyman Kona Coffee Farms has been using Rate Yield for her other property in Quebec City for several years now and seeing great results. As such, it was only natural that we would want to try out Rate Yield on the 6-room property on the Big Island in Hawaii, and Mango Sunset agreed to be a pilot property for us to integrate with Cloudbeds.
When it came time to define the parameters of the algorithm, we ran into a slight problem. While Rate Yield focuses on current market dynamics and relies on competitive pricing to set rates, we found that many of the B&Bs competitors were not showing consistent availability on major channels or simply did not have a booking engine on their website. In order to make Rate Yield work for the small inn, we had to pivot our way of thinking.
First, we determined which channel brought in the highest share of bookings and then we used that channel to determine who competitors might be, even those we hadn’t considered in the past. We did this by using different filters that our target clients may search for. For example, we looked at hotels with exceptional guest reviews, we looked at proximity to different landmarks and we looked at agricultural tourism experiences. For most Rate Yield clients we find that 5-10 competitor hotels tends to be enough to create an accurate benchmark price. In the case of Mango Sunset BnB Inn, we found that the inconsistent availability of competitors online required us to have a larger competitive set with appropriate weighting.
After some careful analysis and taking advantage of all the flexibility Rate Yield has to offer, we were able to start pushing rates and see what the system could do. In the first month after going live, revenues increased by 41% year on year. In the second and third months we saw growth of 28% and 26% respectively. This growth represents an ROI of 26:1.
We are looking forward to seeing how Rate Yield continues to perform in this market as we head out of high season and remaining competitive is of utmost importance!
