** AIRDNA: my town is too small, what should I do? **
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Hello and welcome to the J'poster Complet channel, the channel which helps seasonal rental companies, professional sub-renters, and seasonal rental concierge services to increase their turnover.
Today I'm going to talk about a question that was asked to me by Rachelle, who joined the max income training, the training that helps you use AIRDNA, and I said to myself that indeed, I had Heard this type of question before. This is an extremely relevant question. It's worth answering in general. The question is this: when we have AIRDNA, but we work, or we have our property in a city that is small, there are therefore few ads, in fact, on Airbnb, and therefore few ads present on AIRDNA. How do we do it? Can we therefore work on the basis of what we have? If we suddenly want to merge the data from several cities to be able to agglomerate and have perhaps more consistent statistics, what should we do? What do I recommend you do in this situation? So I'm going to talk about that. If this is something you're interested in, stick with me.
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The subject of AIRDNA and cities that are too small is a subject that is extremely recurring. And I won't hide from you that, in our activity at J'annonce Complet, this is a subject that we are obviously constantly confronted with, because there are a lot of properties entrusted to us by seasonal rental concierge services, it There are many properties which, in fact, concern towns which are very small. Just a week and a half ago, precisely, I was asked for a market audit for a couple who are starting out with a small investment property: a house with a possible garden, in a small town. We were asked to audit the market, to do an analysis for the potential of this real estate investment for seasonal rental.
In these cases, when the size is small, what is the problem? If you are not aware of this problem, I just have a quick point. In fact, the problem is that if we don't have enough listings on Airbnb, we won't have enough information in AIRDNA. In general, when we talk about AIRDNA, we recommend having at least 50 ads in your city to be truly confident about the use of the data. 50 ads is a minimum. It's between 50 and 100. Obviously, the more the better. That's important. If we don't have them, but we still have our property in that city, then what do we do with it?
The first thing is that you can, and sometimes this is the request that is made of us, you can look at what is happening around. Sometimes people say to me: “I'm in a town that doesn't have many goods. Around me, I have other towns that don't have a lot of goods. What I would like is to merge, in fact, the performance of all the cities so that we can have more consistent statistics. » The question we ask is: is it possible, for example, to negotiate with AIRDNA the purchase of several zones at a negotiated price, and that I have, inside, the figures which are also merged. That's not possible. AIRDNA will tell you: “You can purchase all zones. » I'm not even sure that they are negotiating a price for the purchase of three or four cities. I even believe that someone had tried, and told me that they had been rejected. And what's more, technically, they won't even be able to give you a nesting of the statistics, in fact. So in the end, I don't think this is the most problematic scenario.
The first solution you have, in fact, there are three. The first solution you have is to say to yourself: “Too bad, I'm mourning, I'm just buying this. » Perhaps for financial reasons, for example, you will only be able to invest in that city, with the biases that that represents. If you choose to limit yourself to this information, keep in mind that in particular on occupancy rate information, even on revpar, moreover, you can, over certain months, over certain periods, have data that will seem extraordinarily positive to you, or conversely, surprisingly low. It's possible that this is linked to one or two ads which have a slightly unusual performance, which will, in fact, distort your average. So, when analyzing the numbers, if you see that the trends remain relatively consistent, if you have things that are relatively stable, let's learn from them. My recommendation would really be not to draw too specific lessons from it. For example, to make your demand forecasts, you can possibly confirm certain trends that you have in mind, but you will not be able to go to a level as precise as what we usually recommend doing. But it still remains a certain amount of information that is of interest.
Another point on which it may be of interest, even if you have a city with 20 advertisements, is the comparison by type of property. For example, you can evaluate the average price differences observed between a studio and a one-bedroom apartment. If you have a project, you are actually hesitant to divide between three studios or two T2s, you can still look, roughly, at what is the difference in average prices observed between these two typologies. For the measure, it only condenses goods of the same typology. It remains relatively consistent.
Last recommendation: if you don't have the means to invest in more than just one city of yours... I lost my last recommendation. Wait. I don't do it on purpose. I'm sorry. Yes, that's it. I found him. Last recommendation would really be to look at the average. In fact, as you know, on AIRDNA, percentiles allow you to filter. If you don't know what a percentile is, I really encourage you to go watch the YouTube channel: AIRDNA playlist. I made a video that explains what a percentile is. This will help you better understand what it is. But suddenly, for those who already know what percentile is, percentiles help you filter the best ads. When you have a city with only 20-30 listings, I don't recommend using percentiles. Because in fact, we make a filter, we arrive at a scope which is so small. Sometimes it's just an announcement, it doesn't make sense. It is better to look at the average, so as to still try to have something consistent as much as possible. That's scenario number 1, if you don't have the means to invest a little more than just one city.
Now, scenario number 2, which for me is a possible scenario, which is not at all ideal, and which I have heard before. So, that’s why I’m going to talk about it. It would, in fact, consist of buying the surrounding towns. This is the example I gave you earlier: negotiate with AIRDNA to buy all the small towns around. For me, it's a bit of a choice between the plague and cholera. That is to say that we have a problem of an insufficient number of advertisements in a city, and then we will buy the towns around which also have an insufficient number of advertisements. So for me, it's a bad choice. This is a bad calculation. The basic idea isn't bad, but in the end, I think the result is a little bit counterproductive. Some have invested more money to stay with this uncertainty of data consistency. So in my opinion, the best scenario - and this is what I put in place for the market audit that was asked of me for the investor couple, as I mentioned at the start of the video – is to buy your city with an insufficient number of ads, and to complete with a larger city. As close as possible. For what ? Because you will have the perspective of your city with the potential statistics, but you can put that in line with consistent statistics on which you have much more certainty, and which will be able to confirm much more macro seasonal trends. This is very important, because for example, it will allow you to carry out your future demand forecasts: am I going to have weak, strong, medium, event-driven periods? And obviously, you are going to impact a gap between cities. For example, if you want to globally estimate the financial potential of a property, you are not going to base yourself on the largest city, because it is very likely that in your smaller city, the expectation of gain is lower. On the other hand, for the largest city, you can estimate the seasonality, and then, for the orders of magnitude of prices that are observed on the market for Airbnb, there, you will be able to model yourself on AIRDNA. And complete, and have with these two elements, something much more coherent, much more consistent.
Another important point is that sometimes, when we are in this situation, we hesitate between two cities. If you're hesitating between two cities, if you have two cities of similar size that you don't know which one to choose, what I recommend is to think about traveler behavior. For example, the study I did concerned the Disney area. I had the choice between a much bigger city close to Disney, and a city a little further away with fewer announcements, and much further from Disney. The first thing I did was look at the driving distance between my small town, and the big city, and the medium city. I noticed that the bigger city was already closer to the small town I was studying. I hope it's clear what I'm saying, because I'm saying city, city, city. This is because I want to respect the confidentiality of the file, but I try to give you cities anyway. So, we're going to say the small town, the town near Disney, and the town further away. The small town was closer to the town near Disney. This town near Disney had more listings than the average town a little further up. And in terms of behavior, reservations, I told myself that given my distance from Disney, I would very likely have travelers who would have reservation behavior more similar to what travelers who go to Disney do, rather than what travelers who go further north do. So, that's why I based myself on the study, as I said, of the AIRDNA statistics of the small town, plus the AIRDNA statistics of this large city, which had a much more consistent volume of announcements, and which allowed me, therefore, to put into perspective everything I was studying about my smallest town.
So. I hope it will be much clearer, the way that is ideal for me to deal with these kinds of situations. The message to convey is that it is not because we are working in a smaller town that, on the one hand, there is no potential for seasonal rentals, that is clear, but that we cannot use AIRDNA to sell on a daily basis and to build our revenue management strategy. It would be really wrong to say: “AIRDNA, for me, is not possible. I don't have enough listings,” or even sometimes it happens: “My city doesn't exist in AIRDNA. » It's extremely rare, but it happened to me once. In these cases, it's exactly the same. If your city does not exist on AIRDNA, I recommend that you take a consistent surrounding city which will allow you to have an idea, at least, of the seasonality. This is what is important: seeing the evolution of the strength of demand over the coming months is essential for correctly implementing your revenue management strategy.
That's why. I hope this can enlighten you.
− I see that you write to me: “Exact”. I don't know what, but in any case, thank you for confirming.
− Hello Onyx. “If in the city there are approximately 60 properties, is that enough? Otherwise, the biggest city is 20 – 25 minutes.”
It’s true that 20-25 minutes might be a little far away. It also depends on the type of city, it depends on the type of clientele. 60 goods, I think we can say that it is acceptable. It's true that it's not huge, but it's acceptable, and you can already produce analyzes that make sense with 60 ads. If you have 60 ads, there is still one important point that I can share with you. Try as much as possible to carry out analyzes on the scale of the entire heritage, especially when you study seasonality. In any case, the study of seasonality is always on the scale of the entire heritage. But even when you study your occupancy rates, when we have few advertisements like that, it is better to try not to filter too much, unless there is really a need for which you absolutely want to see the prices of T2s, and in which case, it makes no sense to put the prices of studios, T2s, and T3s to analyze for a T2. On that, I agree 1000%, but overall, to study seasonality and city trends, it is better to keep all the announcements as much as possible to ensure that you have a solid base on the statistics.
I don't know if you have any other questions to ask me on this subject, if you have any other questions today, in a more general way, to ask me. Don't hesitate to tell me how the February school holidays are going for you. Maybe depending on your city, it's more complicated or not. I don't know. I see we have some people who follow us on YouTube, other people who follow us on Facebook. I see more people following on YouTube. Besides, I may be thinking about changing the availability of Lives. Do I still have to do them on Facebook? Also, should I only do them on YouTube? Don't hesitate to tell me if you have a preference regarding this too. Will it only be available within the private seasonal rental price and turnover maximization group? I hesitate to restrict the availability of these Lives on the private group. Please let me know what you think about all this. I would be delighted to read you.
− Romain said to me: “Thank you for your recommendations. It's great. »
Please. Glad to have been able to help.
What I'm going to do is I'm going to close this live here for today. But for all the questions I asked, I would be delighted to have your answers in comments. These are not rhetorical questions at all, they are questions on which I will be delighted to read you. I continue to read, obviously, the comments afterwards on Facebook and on YouTube. On Facebook, don't hesitate to tag me so I can see your comments. I would really like to read about this from you, so I am waiting for your answers, I am waiting for your feedback. Until then, I wish you a great day. I'll see you tomorrow. Tomorrow I won't be live. Tomorrow is Thursday, and it will be an extremely interesting interview with a short-term rental expert who has had his company for eleven years, and who supports short-term rental project leaders. I am sure that you will really learn a lot from this interview, because he shared a lot of nuggets with me. So stay connected. I say see you soon. See you Sunday for the next video. Take care of yourself.