23 Nov Short-term Rental Market Research: Airbnb Vs. Everbooked
Update: Everbooked doesn’t exist anymore. But if you still want to read it, then please go right ahead. 🙂
If you have missed it last week, I wrote about how to use Airbnb as a free tool to do market research. You can read it here for free!
This blog post is focused on the comparison of a third-party paid tool- Everbooked. Just as a disclaimer, I have no affiliation with them. The market for short-term rental research is primarily dominated by 3 players: Airbnb, Airdna, and Everbooked.
Airbnb is a free tool, while the other two are not. Airbnb as a free tool takes a lot of time because you’ll have to click through multiple listings in order to get the relevant data that you’d need. At times, it’s painful.
I don’t want to overload you, so today, we’re going to take an in-depth look at Everbooked. Next week, we will take an in-depth look at Airdna, which to me is another great tool. Some people prefer Airdna over Everbooked, but I would like to give you the unbiased information for you to judge for yourself!
What is Everbooked?
I discovered Everbooked earlier this year and have used their products for a couple of months. In a nutshell, Everbooked wants to provide “big-data” to vacation rental industry, an industry that will be worth close to 200 billion by the end of 2021.
In Everbooked, you can enter your listing and it will automatically research your local area and pull together a set of listings comparable to your own. You can then see how you stack up against your neighbors. As you can see, this is extremely effective in gathering hundreds if not thousands of competitive listings.
When I used it back in February and March of this year, they used to have two different products: automated pricing and market reports. Since May of this year, they decided to exclusively focus on market reports and discontinued automated pricing. You can read it here. They used to charge $20 dollars per month + 1% commission on bookings that were generated via the automated pricing tool. Now, they charge a flat-fee of $100 dollars per month, which is the cheapest monthly billing solution compared to Airdna.
How Does Everbooked Work?
You will have to pay to use their service. They do not have a trial period anymore. I have an Everbooked Pro account, so I will walk you through via pictures in 4 steps. Each market will take you roughly 5-10 minutes to complete. Once you get all of the data, be sure to save it to an excel sheet somewhere! That will give you a way to quickly filter out for the top markets based on your research.
Step 1 – Home Screen
This is what happens after you paid and logged in. The bubbles can be a little overwhelming at first, but the product itself is pretty easy to use. Since you are just starting out, which means you’re in a market for a new unit, we will only look at “Reports” on the top right corner.
Step 2 – Narrow Down and Filter out
For simplicity sake, I’m going to choose a location where I don’t find thousands of listings like I would in San Francisco. You will want to apply a filter and only looks at the “Successful Properties.” Trick question: Why?
Because we only want to emulate the most successful properties! 😉
Once I have applied the filter, the number of listing went down dramatically from 1,037 to 211 in total listings. That just saved us a lot of time clicking around if we were using Airbnb as a free tool! Not to be a math geek, but each click would have taken us 2 seconds and we were able to eliminate 826 unsuccessful listings with 1 click, which ended up saving us 1,652 seconds in clicks. 1,652 seconds is roughly 28 minutes.
You’re welcome! 🙂
Step 3 – Aggregated Metrics
Once you have narrowed down to your hypothesized market, you can then quickly judge these 2 vanity metrics: Pricing and Occupancy rate. Aggregated metric is great because it allows you to take a mental snapshot of the current market.
I would not pay attention to revenue because we do not have the actual costs to run each unit. When Everbooked pulls the available data from Airbnb, the only information that’s accurately pulled from the database is the price for night and occupancy rate.
Based on the vanity metrics, 67% occupancy rate and $50 dollars per average night is not that bad.
But would I want to invest in this? I would probably pass. Generally speaking, I’m the most comfortable with occupancy rate over 80%, but I am more comfortable going into an area where it’s between 70% and 80%.
Most hotel chains struggle to keep their occupancy rate at or above 70%. So, as a rule-of-thumb, 70% is my guiding principle for investments.
Step 4 – Drilling Down on Pricing
Aggregated data is great because it allows you to make snap judgments. But, it is also deadly flawed because it takes the averages of all listings and pricing. We want to go one step further and look at the individual properties broken down by bedrooms. We want to rent out our entire place, so let’s stick with a 1-bedroom model.
Let’s do some math!
1st quartile (the lowest quartile): $79 dollars * (.67 occupancy rate *365 days) = $19,319 in yearly gross revenue.
2nd quartile: 92 * (.67*365) = 22,498 in yearly gross revenue.
Let’s be realistic and say that you are in the 50% of the most successful properties, then you are expected to earn close to 23,000 dollars per year. Now, you get 5 units up, then you’re looking at 115,000 dollars per year before expenses and taxes! That is not bad for a few minutes of research!
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