Hi this is Richard with Short-Term
Rental Secrets.com coming to you live
from the Los Angeles Airbnb Open 2016
and I'm thrilled to introduce to Ian
McHenry president founder CEO CEO you
name it - he does it all at Beyond Pricing,
which by the way is a service that I've
been using on my Airbnb rentals for at
least a year maybe longer with great
success and so I'm pleased to have Ian
here to tell us a little bit about
Beyond Pricing. What you do you, how
you do it and give us the
information. Yeah absolutely so beyond
pricing is a simple easy to use SAAS
software that helps you automatically
optimize your revenue based on
fluctuations in demand. Okay and so
break that in English. Yeah! So do you
have an Airbnb, people connect it to us
and then we'll automatically increase
the prices for major events, high season,
things like and decrease it for low
season to make sure people stay occupied
and we do all that automatically. Sync it
directly into Airbnb or if you happen to
be on Home Owner of the VRBO and will
sync it right there and so people use us
to sort of hopefully set it and forget
it and optimize the revenue with the
same kind of precision and
sophistication that hotel is already
used to
get their prices up. And so you are talking
about hotels I think when you and I
first met you were talking a little bit
about the dynamic pricing that we see in
the airline's you know like the seat
that I'm in this one price in the seat
next to me is a different price. How
do you guys actually do this the data
scientist algorithms. What
makes you guys capable of doing this.
Yeah, so I actually used to do this for
all the big airlines and...You personally?
I personally so like you're a code guy I'm
a code guy yeah. So we go out there as
management consultants at all the one
and then go and work with his big big
hotels and big airlines help them change
the prices. And we would do that help
them optimize it they made a five
percent increase in revenue, we would
like to make their earnings report. Right.
And we came into vacation rentals and we
looked at it, we looked at their prices
and we saw - wow people are very
unsophisticated in this which was a huge
opportunity with optimizing their prices.
We were able to get a lot of folks forty
percent increases in revenue. That's
amazing! I don't know exactly what I've
seen is a bump but I know it's huge.
You're a little bit more sophisticated
in the average person but for folks like
you usually see around twenty-five
percent increases which is a big deal
I've seen a huge bump up and what I
would say is and where I'm learning from
you as a user is previously I would get
nervous if I didn't have enough
occupancy rate and I've seen statistics
that you put out blogs and so on that
says you know fifty percent of your
rental should be 30 days or lesser and
its really uncomfortable to like sit
back and wait but then when you trust
the algorithm and you trust it
remarkably it sort of seems to work yeah.
I mean that's it you know we always that.
We actually had one of our first users,
he is a number one, he and his wife but
get it fights about exactly what you're
talking about which is hey if we
increase prices that means you might not
be the first person to get booked up but
that's okay people are still going to
get booked, you want to let people book
that cheap inventory first and then
yours is just sitting there at a nice
rice right and but it's a little bit
scary and you just need to kind of power
through that and trust it and takes a
month or two to say hey I'm okay having
vacancies 30 days out knowing that
they're going to get booked people are
still booking last minute there is
increasingly more and more people
booking at the last minute. There is! And
talk to me a little bit about sort of
your methodology for the duration of
stay and the proximity of that stay.
Sure, well so the main way that we
look at things we split it into two
parts one is to figure out the right
average price for your place and the
second one is to fluctuate that based on
changes in demand increasing for high
season decreasing for low season. And
so when we talk about this he'll score
and making seeing how booked up your are
that has to do with your average prices.
And it's this question of hate and why
the Marriott or I like the Ritz right
you happen to have some nice places that
are more like the Ritz and so if we just
compared yours to every other you know
four-bedroom around yours is can be
priced way higher and when what we look
at is is it booking up at the right way
are you actually filling up with that
price and if not we lower it until
you're booking up at exactly the right
way. Well it's a lot of fancy math and
whatnot it's hard to explain. What do you
do about local events and how do you
compare like sort of demand in the city
and in the in the region and then like
the block. That's a great question. So
we're in downtown LA right now and we
have the Air B&B Open happening and so
we're looking at pick up some bookings
just right here in this area for your
place to see how much more demand is
there just in this area and so here I
believe we increase prices about eighty
percent for this event because of all
this demand that was happening.
But out in Santa Monica not many people
are staying there right so we're not
actually increasing prices and we can
get very specific in those neighborhoods.
We get as specific as possible all we
need is like a cluster of about a
hundred and so similar listings and so
in Paris that will be like four blocks,
in the middle of nowhere Wichita or
wherever it might be it's a slightly
broader radius but we get very very
specific for local events that we pick
up makes perfect sense. And one thing
that I would point out to people is when
you talk about an eighty percent bump up
in you know stay for two nights or three
nights like that's a huge difference
between your steady state pricing a
hundred dollars a night now you're at
180 for three nights that's 240 more
dollars that's like three additional
lights of rental yeah right so you can
afford a little bit of more vacancy
which I haven't really experienced
myself but even if you did if you had
one extra night of vacancy and you use
your system it's still more than offsets
and pays for itself and you come out
cash flow positive. Absolutely! You know
it's all about that and trying to
increase people's return on the
properties and be as efficient as possible
and it works both on the upside in on
the downside. We will increase for a
major event like this to help you make that
eighty extra bucks per night and the
same time though we'll know when it's
going to be a low season instead of you
sitting there empty and having ten
percent, twenty percent occupancy we will
lower it so that you'll out-compete
everyone else and get all those bookings
that are coming in and still have high
occupants even if your average price is
a bit lower because the end of the day
what that means is more revenue. Terrific.
You know I've experienced it both ways
and it couldn't be happier tell us a
little bit about sort of the the size of
your business and how long you've been
doing and for how many people you do it
or properties or nights or however you
define the metrics. Yeah absolutely. Give us
a sense. Yeah, so we started three years
ago because we saw this need. We were
actually property managers ourselves.
Managing about 30 properties in
San Francisco and I came in as the
pricing guy and we saw, you know, hey this
is actually a really hard problem so we
built the software actually for us.
Initially. Then we saw hey this is a
really big opportunity even probably
bigger than property management
everyone's going to need this and so we
rolled it out spun it off as just a
software product about three years ago.
Now and just in one city in San
Francisco and on Airbnb. Now we're in 300
global markets over 50,000 listings use
us and we priced over 150 million
dollars worth of bookings so it's really
starting to pick up. And people are
seeing it more and more like in the
early days when I was evangelizing this
people would even think hey I should
change my prices and now I think
everybody pretty much recognizes that
they need to do that to maximize their
income. No it's amazing and I guess one
question I would have for you is, since
you've been doing it for three years and
you started off you know with 11 client
that paid and now you're fifty thousand
listings right, what sort of rate of
growth do you foresee in the short term
rental market whether it's Airbnb or
vrbo or home away I mean like are we in
the first innings the fifth innings what
do you see? Yeah I mean I
still think it's very early days. You
know, you see that in that where you
know Uber and Lift have really kind of
become a normal part of our lives in
which of the world you know I think
short term rentals are still on the
upswing right it's still something that
people are getting used to and we're
seeing more and more demand each year
and so it's an incredible opportunity
there and I think a lot of real estate
folks to are saying hey this is an
interesting asset class right because
it's something that can be a long-term
it can be a corporate rental it could be
a short-term it's this flexible
inventory and so it's actually can often
be like a very good investment because
if the market changes you can switch it
to something else. That's right, you're
not married to anything whereas if you
go if you go long-term you've got a 11
month waiting period 10-month nine-month
this you could try it for a period of
time you can go back and forth. Is there
anything else that you would like people
to know or yeah I mean it's just
generally this is something you should
do yeah you know you definitely want to
be using some sophisticated pricing
maximize the income from your place and
it will really have a significant impact.
One thing though to note is and that a
lot of first-timers get wrong or just
don't understand is this there's a ton
of seasonality in this and then some markets
it's incredible. We spoke about it in New
York when I first started I was saying
no I think the summer months are really
really popular I'm expecting big demand
you said no summer months historically
according to math are slower months
people go to the Hamptons right. Right so
like little bit Bonnie and yet down in
New York right yeah. Absolutely and so
when those are but also recognize that
where I am in Santa Cruz which is beach
town south of San Francisco tons of
weekend demand on the summer demand and
all do we have a nice three-bedroom our
mortgage is about thirty six hundred
dollars and in the winter months I'll do
twenty eight hundred dollars right I
price down low so my occupancy is good
but i'll be at 100 bucks a night right
in the middle of the week in the summer
i'm going way up above three hundred
dollars i'll make eight thousand dollars
a month so you got to understand that
the income flows can be very high but
they're also very seasonal and not to
worry and just to really understand that
and you can see those we have those kind
of graphs and charts all on our site so
you can know hey i need to prepare for
winter this is what my remedy is going
to look like but that's the thing that i
think a lot of people don't recognize
and they go into their first winter and
they start worrying so you really need
to understand that seasonality and
budget for that and if you do you'll see
that across the whole year you know
you'll make your money in the high
season, you'll cover your expenses in the
low. Right and you look at it over a
year and you come out way ahead.
Yeah okay well look I think this has
been super helpful I'm planning on doing
a full length review. We're going to put
a link at the bottom if people want to
subscribe and in the interest of full
transparency - I'm a user, I pay for the
service, I pay him the same as everybody
else if you click on the link I'll get a
little bit of a kickback or whatever the
Commission is, whatever the affiliate
link is, so but that's in full
transparency. But whether you click on
the link or you go directly to him or
whatever you should sign up you should
try it is there a trial - three-month
trial so you have nothing to lose. If
you're not making more money stop using it. And the one caveat that
I'll say will cover it greater when I do
the full in-depth review is it's so easy
to use as we talked about before camera
that you can set it and forget it and
generally I do that and it works really
well and then every once in a while I'll
go in and check up and like anything
else. You can always make it a little bit
better right so I can adjust my prices
and what I find is I have to adjust my
base price yeah a few times a year
because sometimes I'm too high and
sometimes I'm too low and so things can
change, market convictions can change and
we still give you full control which is
the good and the bad right. Like we give
you that control but you do got to check
in, you know, a couple times a month just
to make sure everything looks good, make
a little adjustment, pop out go back to
your day. And thank you so much I really
appreciate it, good luck, we'll see
you soon! Thanks!