Mike Bayer
You're listening to the Vacation Rental Success Podcast. With over 1.5 million downloads, this is the place to be for all your short-term rental knowledge as part of the Vacation Rental Formula Business School. This episode is brought to you by the kind sponsorship of PriceLabs, who will help increase your revenue and occupancy with their dynamic pricing and revenue management tools. PriceLabs has just launched its 2023 breakthrough release of the next generation of revenue management. This brand new cutting-edge solution leverages hyperlocal data to optimize rates and increase your revenue like never before; visit the link in the description of this episode for more information.

Mike Bayer
Without further delay, here's your host, Heather Bayer.

Heather Bayer
Sometimes we go down that deep, dark hole of acronyms and jargon, and it can be so easy to forget what it all means, or we even make up what we think they mean. I've done that. The world of dynamic pricing and revenue management is so full of jargon, and in this episode we're going to draw back the curtain and explain it all in terms even I can understand. I'm joined by my longtime friend, Thibault Masson, who is going to make it all come clear for us.

Heather Bayer
This is the Vacation Rental Success Podcast, keeping you up-to-date with news, views, information and resources on this rapidly changing short term rental business. I'm your host, Heather Bayer. With 25 years of experience in this industry, I'm making sure you know what's hot, what's not, what's new and what will help make your business a success.

Heather Bayer
Well, hello and welcome to another episode of The Vacation Rental Success Podcast. This is your host, Heather Bayer. As ever, I am super delighted to be back with you once again. As you just heard in the intro there, we're delighted to welcome PriceLabs as our show sponsor for the next 10 weeks.

Heather Bayer
Before we kick off into the show and my interview with Thibault Masson, I wanted to share a bit about what it means for us to work with the sponsor. I've been in the vacation rental business for over 25 years and 20 of those were as a property manager. Over that time, I've seen so many new companies that deliver services to this industry come and go. I've talked to hundreds of managers and independent hosts who've used these services and products, and I've met many of the suppliers at conferences and networking meetings.  There are some I would not endorse, not because they don't do the job and I'm sure they have very happy customers, but because I just don't know enough about them, at least not enough for me to feel confident to recommend them to you.

Heather Bayer
I met the PriceLabs team in Barcelona in May, and I've known their head of product marketing, Thibault Masson, for many years. Thibault is the founder of Rental Scale-Up, a leader in industry news, with one of the best weekly newsletters that I've ever come across. He's also the owner of vacation rentals in Bali and St. Bart's. Just a heads-up, Thibault, those are two places on my bucket list. In his role with PriceLabs, he's a trailblazer for revenue management, so was just the right person to draw back the curtain on dynamic pricing and explain the ins and outs of data, of algorithms, how to get started, or even advance your current revenue management strategies. We'll also hear about PriceLabs' breakthrough release, which brings hyperlocal data trends, performance metrics, and so much more. Wow, that's a lot to cover. Without further ado, let's go on over to my chat with Thibault Masson.

Heather Bayer
I am super delighted to have back with me after a long period of time  Thibault Masson. Thibault, it's been, I thought it was just eight years, but you were on Episode 30 of the podcast then Episode 103, and now we're at 500 something. So welcome back.

Thibault Masson
Well, thank you, Heather. It's a pleasure to be here, and hello everyone. I don't know, episode 500-something just says about the power that you have, the commitment over the years, you doing this podcast. It's just amazing. There's so many podcasts around. It's hard to do podcasts after one year. So how long has it been? Eight years?

Heather Bayer
Nine years? Nine years. It will actually be. We'll have our 10th anniversary in January of next year.

Thibault Masson
Fantastic.

Heather Bayer
Yes. We should be up to 600 episodes and well on our way to two million downloads by then.

Thibault Masson
Congrats.

Heather Bayer
Yes.  I look at those numbers somehow and I think, Oh, my gosh, is that really that many people have been listening? But there could be some around who listen to Episode 30 and then Episode 103 and think, Oh, I remember that guy. For those people who don't already know you, because I did mention in the introduction you are the author of one of my favorite newsletters, the Rental Scale-Up Newsletter, which I absolutely love. We all get hit with so many newsletters in our inboxes. Yours is one of only three that I actually open.

Thibault Masson
Oh, wow. I'm very honored. A lot of pressure on my shoulders now.

Heather Bayer
I even save it to Evernote, so I can come back to it when I've got some time to sit down and read it. That is testament to what a great newsletter it is.

Thibault Masson
Thank you.

Heather Bayer
Just for everybody who's out there listening, if you're not already subscribed to Thibault's newsletter, please go to the Show Notes and you can sign up through the link there or just Google Rental Scale.... is it Rental Scale-Up?

Thibault Masson
One word, rentalscaleup[.com]. Just one word.

Heather Bayer
All right, rentalscaleup[.com]. Well just Google it, you'll find it, and subscribe. You'll find that that's really worth it.

Thibault Masson
It's a free newsletter.

Heather Bayer
Thibault, that's a free newsletter, yes. For those who don't know you, can you give us a bit of a recap? You've had a varied career in this industry. What have been the highlights over the years, and what are you doing now?

Thibault Masson
It all started in my 20s with my ex. We basically spent some time on a small French island called St Barts. We saw these nice houses on the island. We're like, Wow, it's beautiful. Let's just talk to a property manager and pretend we are interested in buying a place like this. This is called Villa Hopping on the island. It's a thing. Of course, property managers hate this because it's such a waste of time. But again, it was some time ago. We did this and we talked with this guy. It was just amazing. He's like, You know what? This is a house you're seeing here, but actually it's not a house, it's a business. Because on the islands, 70% of the guests will come and stay in a villa. The whole island lives on villa rentals. Oh, villa rentals. Okay. You know what? One of the villas we're going to visit is for sale. It's not the fanciest, not at all. It's not the fanciest at all. But if you go to the local bank, because you're French citizen, this is a French island, and there's already bookings for next year. There's already revenues that will stream in the next year.

Thibault Masson
They know it's in the books. I know because I'm the property manager, it's in my books. The bank suddenly is going to be able to lend you money. Of course, we both had a good job in Paris. But again, we're like, Oh, that's interesting. We thought about this, negotiated a bit on the price, and boom, in our 20s, basically we own the villa in the Caribbean, which sounds fancy, especially as we could not afford an apartment back in Paris. Again, it was more than 25 years ago, things have changed. But again, not a fancy house, but it sounds great. That's how it got started and it was great.

Thibault Masson
Again, I was working as a property manager out there, being a remote host, not even a host at the time because I was not doing anything. It was fantastic. I had to be back alone, but I was getting the money. The property manager was doing everything: marketing the villa, welcoming people at the airport, guiding them to the villa. As you know guests can sometimes be demanding. They were handling everything. It was fantastic. Then at some point, we built a house in Bali. Again, you have to go to Episode 30 for the whole story.

Thibault Masson
But we said, We're going to do the same. We're going to build a house there and it's way cheaper than St Barts. It's fantastic. We're going to give the keys to a property manager.

Thibault Masson
But. We went to see a big property manager there. They said, We love your villa, but we're not going to take it on board. We're like, Why not? Just because it's just too far away. We were basically an hour and a half away from the city center of Seminyak, the big center of Bali. It's just too far for this person to send an employee and back if there was anything in the house. I'm like, Oh, wow, I have to get direct bookings. How do I do that?

Thibault Masson
This is when I started listening to a certain podcast, which is this one, this very podcast. Basically, I started reaching out to people who knew some things about this and tried to get bookings. As I was doing this, I started writing about it. I started blogging about it. That's how it got started. I started into like, You know what? I'm running my thing for my own small business, but I'm going to write about it. Then suddenly I was talking about it. For some reason, I was invited at conferences to speak about this. I started to get direct bookings. I started, for example, getting bigger on Instagram early on.

Thibault Masson
Now in St Barts, we have one of the biggest Instagram accounts, because we have to compete with property managers out there. Also to get direct bookings, I'm getting direct bookings in Bali, but not in St Barts. While doing this, I was able to get more visibility in the industry. For example, for five years I joined Booking.com. At the time, Booking.com was trying to compete with Airbnb for the first time. They had been disrupted. What I mean by that is that first Booking.com is like, No, we're all about hotels. Who cares about vacation rentals? Who cares about these things? Airbnb came and just ate their pie and they're like, We have to react. We have to bring in people from the vacation rental industry. I spent five years at headquarters at Booking.com trying to adapt the product from hotels to vacation rentals. It was very interesting, because I got to learn how a big company thinks and acts or doesn't act sometimes and why it sucks sometimes. Sorry for my words, sometimes it works out. One of the things I had to do there, also in my job, I also had to look at whatever Airbnb was doing and report this back to the leadership team at Booking.com.

Thibault Masson
I left Booking.com.  I started blogging again, of course, blogging about the industry, about Booking.com, Airbnb, about new technology. As I was doing this, I was also doing some consulting for some tech companies in the industry, because I always like tech. I've always liked tech. One of my clients was PriceLabs, which is a dynamic pricing and revenue management platform. We started talking like, We like Rental Scale-Up, but we like you as well, so why don't you join us? That's how now Rental Scale-Up is part of PriceLabs and now I'm the head of product marketing at PriceLabs, really in a nutshell.

Heather Bayer
That is a great history. It's a history of complete absorption into the industry. Can you imagine what would have happened if you hadn't done that Villa Hopping at the very outset?  You may not have had it at all

Thibault Masson
Isn't it fantastic, Heather? Also, how in the vacation rental industry, you talk with people, they always have had four or five lives, changed countries. It's such an amazing industry. You feel like it's like if you're an expert or something like this, the only way to survive abroad is to open a property management company, or you have a rental. I find it fascinating and that makes our industry so interesting. You have warm people, interesting people, always great stories. After going to a conference, you have a drink and you start talking with great people. I love this industry.

Heather Bayer
Oh, yes, me too. I mean, my 25 years in, I still haven't lost that passion. But you know one thing that, and I'm segwaying out now into the topic of this conversation, which is dynamic pricing and revenue management. I ran a property management company for 20 years. We did not adopt any real revenue management strategies, over and above, manually upping and downing some pricing because we felt like it, rather than on the back of any data. To let myself off the hook a little bit, I would say that in our area of Ontario, it took a long time before Airbnb got here and everybody did direct booking. There was very little in the way of data. Of course, there is now. I think if I was back in that company, which I sold a year or more ago, if I was back there, I would be head deep into revenue management strategies.

Heather Bayer
That's what we're going to be talking about because I'm not the only one I'm quite sure that is either never done it or has started out and is not really sure how to carry it out.  I want to go back to the basics here of revenue management, dynamic pricing, and ask you first off, what is it and how does it work?

Thibault Masson
So dynamic pricing, it's got different names. It's called search pricing, if you ever book an Uber, it's called time-based pricing sometimes in the airline industry. Basically, it's a business strategy. It's a business strategy where you set flexible prices for your services, for example, based on certain factors such as the current market demand or their historical data. You may have nothing but seasonal data, for example, or you know about data you have about supply, competitor prices, or any other market factors. The idea is that you're going to have flexible prices. For example, the price you're going to have tonight, the first day at your place, is not going to be the price that you're going to be displaying tomorrow, because maybe tomorrow... I don't know..., tomorrow is Friday evening. If today's Thursday. It doesn't make sense to... If it's a weekend destination, probably Friday is more expensive. Or maybe tomorrow evening there's a big concert somewhere. You may or may not know this, by the way, but some software, like PriceLabs, would know this kind of thing. The bet is, that with dynamic pricing, you'd be able to capture, with this access to data, capture this opportunity for you to increase your prices.

Thibault Masson
But it's not just about increasing prices. For example, it's also being able to flex down your prices, reduce your prices. If, for example, it's able to say historically, that's a low season moment. Through data, it would be the software is able to look at, for example, current bookings for next week, for example, it can say it's even lower than usual. By this, it will basically start dropping your prices to some minimum that you're going to set. But again, this way you don't have an empty place. It's really basically going to be able to react way faster than you can. That's what direct pricing does. It's automating your price changes. Usually, it's like every 24 hours basically, it's going to recalculate all your prices for the next 300-400 days in the future. It's really amazing. It's a promise for more revenue, more flexibility. As well, it's a strategy, right? It's a tool, let's say. It's a tool. Since that, you could say, With my dynamic pricing, maybe I want more revenue or maybe I want more occupancy, which is something you want to talk over with your homeowners sometimes. They'll be the owner, you're going to say, If an owner just wants more occupancy, you can say, You know what?  I'm going to just use dynamic pricing to have more bookings as soon as I can and just drop prices as much as we can, because my owner wants occupancy. So it's really just a strategy here.

Heather Bayer
Okay, we're going to come back shortly and talk about owners, because when you're dealing with hundreds of owners, some of whom we may have to convince about this type of strategy. But I want to just clarify for a moment. You've said that there are different expressions like time-based pricing and there was another that I wrote the note down.

Thibault Masson
Search pricing.

Heather Bayer
Search pricing. It looked like 'service pricing' in my notes, my handwriting is pretty awful. Search pricing, time-based pricing. Just give me the difference between dynamic pricing and revenue management, because you hear them sometimes used interchangeably, and I'm sure there is more of a difference.

Thibault Masson
Sure. Heather, early on you said you never had any revenue management strategies. I'm sure you did. I mean, you're a seasoned business woman. You had a revenue management strategy in a sense that, for example, it was about having high-season, low-season prices, shoulder rates, probably some discount strategy, maybe some prices for early birds or not, last-minute pricing. All this is, in a way, revenue management. You're taking action on your prices and on your minimum stays. We can talk about that later if you want, but you're going to take this, in a way, to sculpt the demand. You're going to influence the demand by trying to manage your pricing or stay restrictions so that you can, for example, increase your number of bookings or increase your revenue potential. For example, if you were to... The opposite would be basically having a flat price in the whole year. If you have a flat price in the whole year, you'd be missing out probably at some good opportunities, or sometimes you'd be too high to get any booking. That's not managed. Revenue management is just like doing anything you can to at least try to attract more bookings and have more revenue.

Thibault Masson
That's what it is. Now, as I just said, you can completely have flat pricing throughout the year. Or at least... It's not unheard of. Right?  On my island of St Bart, most properties still have a low-season price, high-season price, and then Christmas price. That's just the street rates for the whole year. It's not great because basically there's a lot of opportunity lost, but it's kind of revenue management in a way that's super basic. That make pricing I just talked about, that make pricing would be I'm able to look at market trends, not just like historical data, but current market trends. Maybe last year things were booming, this year things a bit more uncertain. So it's able to adapt my prices to the current demand. It's still looks at historical patterns, for example, which is also looking at current data. And it's going to do this every day and every day it's going to recalculate all my prices. So it just means that there's a lot of automation going on, a lot of access to data in a way that is not possible basically for a human, it would be very difficult to do. But it's just the same thing.

Thibault Masson
What we did in the past was to have three rates for the whole year, because that was manageable. It's easy enough, especially if you have to publish rates or negotiate prices with the owners. There's no way you would have negotiated 365 prices for the whole year. That was crazy. So the economic pricing is one way, one technique to try, to have a better revenue management.

Heather Bayer
Yeah, you're absolutely right. We did operate revenue management, but we did have 'set it and forget it' pricing. So we had high, low... in fact, for years we just had a high season and a low season. That was it. Then we had higher rates.... Yes, we had higher rates for long weekends, for Thanksgiving, for Labor Day, for Victoria Day and Christmas. So yes we did. It's just it was a set it and forget it. There were a couple of bad years where we got through into June and we weren't achieving our revenue goals in terms of the bookings that we already had. I can see now where we could have been much more successful if we'd used, let's say, better revenue management strategies.

Thibault Masson
Yes, and also times as well. It all starts with data in a way. So all these tools, the first thing they give you access to... They have access to a lot of data. For example, PriceLabs every day goes to Airbnb, Booking.com, Vrbo, and just scans everything on their websites to see how much prices are changing, how many bookings they're getting, to then get this data, process it, right. So, basically any tools like this, any tool in the market will give you access to some market reports. So even if you're on the fence about automating everything, at least you have access to this data that gives you an idea about how things are changing. I know my market, but how are things this year? That's always useful to know, even if we know our markets. That's the first thing I would say. But another bit as well I thought that's really important is that I said search pricing and I said Uber. If you ever tried to book an Uber and were the victim of some search pricing when you realize the prices are doubling up, tripling because it's midnight, I'm in the middle of nowhere and I feel not safe and I want to get out of here.  You're like, You're outraged.  Right?

Thibault Masson
There's also a notion of acceptance here. In some markets, if you have dynamic pricing, it means that some people will pay less, will pay more at some moments. Obviously, it means sometimes in some markets that are very traditional, guests may not be always happy of not seeing anywhere a price. You're like, Oh, you want to know what the price is? You have to enter the dates and see what the price is. In some markets, it may be still difficult in a way, a difficult conversation for some guests. But now it's changed because if you go to Booking.com, Airbnb, all these websites to book any hotel, any vacation rental, prices are dynamic. Airlines, they introduced in the US dynamic pricing in 1983, so we're used to this. I was reading an article in The Financial Times this week, where it's not going well in London, for example, because they've started adapting dynamic pricing to beer. So if you go to the pub in London on some days, the pint is, I think, 20 pence more expensive, because there's a lot of demand and people are outraged by this. But in our industry, again, travel industry, airlines, hotels have made it obvious and Airbnb, if you're a host, Airbnb has its own dynamic pricing tool. So even smaller hosts do this, are doing it. Small hosts have access to this technology. If you're a property manager or a host that's not using this, basically you're not using the tools that even a small host, who doesn't know much, has access to, thanks to Airbnb. I think that's where the state of the industry is at the moment. There's nothing wrong with [old] habits, I completely respect this, again I'm in a market where it's like this, but the expectation is changing a bit as well.

Heather Bayer
Yes, it's interesting. In my company, we were a direct book company, always 80%-90% direct book. Up until 2020, when we got a new website, we had all our prices shown on the website. That was a lot of years  we had that.  So, if we reduced the price, then reduced it on the website and then we'd have calls from guests who'd already booked saying, Oh, the price has gone down, so I want that price. It was really hard to justify. In 2020, when we went to a new website, obviously we went to a site where the prices were not shown until you put your dates in. We waited a long time for that. But then it has been said that while the rest of the world is in 2023, Canada is still back in 1955. Maybe we will be catching up and I'll probably get some backlash on that one.

Heather Bayer
Hey, Thibault, I'm going to take a short break just now to hear about our sponsor, PriceLabs, directly from one of their clients. That's Terry White from Anna-Maria Island Beach Rentals. We're going to be right back with more from Thibault just after this.

Terry White
We own three vacation rental properties and manage 43 others. I've always said the two things in this industry that will kill you faster than anything right now is your rates and your reviews. If you get either one of those wrong, you're going to get killed. I adapted very early to dynamic pricing simply because I realized very quickly I couldn't do it as well as they could. Even having 30 years of experience, knowing my competition very well, probably the two biggest mistakes I made was, I under-priced my inventory too low at peak season. I priced it too high at shoulder season, and when I started exploring dynamic pricing tools, revenue management and stuff like that, I realized very quickly that they could do it much better than I could. What you can do in an hour in a PMS, you could do in 10 minutes in a pricing tool like PriceLabs. On a portfolio level, on a group level, on an individual level, they're pretty powerful tools. I have great respect for PriceLabs, that's my go to pricing tool, and between market data and my data that I pulled from PriceLabs, I'm in a pretty good place here.  Excellent customer service, a superior pricing platform. I think that you'd be in pretty good hands if you chose PriceLabs to be your pricing tool.

Heather Bayer
That was Terry White from Anna-Marie Island Beach Rental, someone else I've known for many, many years. I'm sure you know Terry as well, Thibault.

Thibault Masson
Yes. Much, much, a lot of respect for Terry. I love tech in this industry, and he's a go-to person whenever you want to talk about tech, PMSs, he's amazing. He's so generous with his time and is an amazing person.

Heather Bayer
I know. I talked to him so many times over the years about PMS. Should we change? What should we go to? He was he was amazingly helpful.

Heather Bayer
So, I want to talk to you about owners, because we can't manage this business without our owners. That is impossible. You've got to have people who own the properties and you've got to work with them. I know from my experience that convincing owners that prices need to be lowered as well as raised, particularly in this last year, is really tough. It's very challenging. How can property managers get their owners to get them into the right mindset to be confident that the platform is working on their side?

Thibault Masson
Yes, I think that's really a great question. That's something we run into a lot. You may be a property manager or a revenue manager working for a property manager company and you may be convinced that it's the way to go. But then you have to convince the owners as well, because we did talk before the break about the change of mindset. As travelers, we are used now to see prices changing for airlines and stuff. But when you flip the coin sometimes as an owner, you're like, Yes, but would I like this for my property? Would I be comfortable with it? The first thing before I think usually what we see with property managers is just to do exactly as we said. It's explaining [to them] that as a traveler, you may have seen airlines and hotels and vacation rentals, and other places changing their prices. And it's kind of like some expectation in the market. We also explain that it's about adapting the demand. The first thing we usually do, property managers can do is before even turning on dynamic pricing, it's very helpful to go and get... If I'm talking about here, about PriceLabs, for a while.

Thibault Masson
PriceLabs has a product called Market Dashboard. It's a market report. You have other tools in the market that give you market reports. But with this market report, you are able to show, Yes, I do have data on your faraway island, which I had doubt about before using PriceLabs as a user, before doing the company. They do because it's basically PriceLabs scans the whole all of Airbnb, all of Vrbo and the rest. So there's data for all over the world. But with the Direct Market dashboard, you're able to get data about the number of listings, the average revenues, the seasonal trends, all kind of lots of what's going to happen with the future occupancy for September, October, November, December, and future prices and historical prices. You get graphs and what you can even do, you can even upload your logo out there if you have a company and get this as nice PDF. With this, you're actually able to show... Because it's very abstract to talk about, yes, market demand changes. But if suddenly I'm showing to the owner, his or her own market that they know, they know their market. I say, You know it's seasonal, right?

Thibault Masson
You know the high season in your market is, for me for example, it's December because it's Caribbean. It's Christmas. It's the winter destination. You're like, Oh, yeah. They get it. You can see and then when you're showing them their market. You see how occupancy is changing, the identity is changing. You can see anything is changing. You can see the market, prices in the market. Prices are changing. We just want to embrace this. That's the reality of the market. We're going to help you ride this wave of demand. You can see things go down at some point. June, for example, in the Caribbean, it's very low. That's probably when we should be lowering our prices, but they should be probably lower than in May. May is still okay. So having a flat price for low season in May and June is not going to make sense because if you're low enough for June, you're too low for May. Or if you have the May prices for June, you're too high to get any booking. That conversation has to be very concrete. Again, having a PDF, which can even print out, makes things even more easier, because people can use a pen and show things with dialog.

Thibault Masson
That's the first thing. There's actually data. You can actually just show you the market. The second thing is then talking about the revenue upside. That should be very clear in the sense that sometimes it's unlocking the fact that we are able to push prices at more higher than we thought we would be able. There's some resistance here because we don't want to be too expensive. But sometimes, you know what? It's the demand. If you're an owner, you have this one night to sell. It either sells or not a certain price. You're not going to be able to sell like 20 items. Today, I'm not selling 29 and saying, Well, that's one night, so I want to maximize the price of that one night I have. That's also a mindset where I just tell people, It's okay to ask for more because again, we'll be dropping the prices at some point maybe to be able to get much demand. You have to talk about safeguards. For example, you're going to set up a minimum price. You're not going to drop the prices like crazy. There's safeguards. What we see in the end, a lot of the time for it, it's dialog and say maybe you could have like...you can say maybe you could decide on a base price, a price around which the prices would pivot, and we'll do plus, minus 20%, for example, for the first year. It's a way to be dynamic, but within bounds, boundaries that the homeowner is okay with. And then usually the year after, it's okay to remove these boundaries because they see that usually it's okay, it's going well. That's just a way to go about it.

Thibault Masson
Last thing I would say, usually property managers try with five properties of the portfolio just to get used to the tool, for example, or just to use them as use cases to convince.  Your neighbor is doing this, your neighbor is doing it. That also works a lot, as we all know.

Heather Bayer
That's great. I love the idea of having something printed. People like to see something - on paper still - they can actually see that shows all the figures. Yes, if you can have graphs and something that's really visible that indicates what they might be missing out on if they don't follow.

Thibault Masson
In the report also shows competing listings.  Right? So you should look at your competitors, look at what they're doing. So suddenly you're like, Okay, it's really concrete because you can see it's your neighbor's house. That's their prices. Again, it's very concrete.

Heather Bayer
The other thing I really liked, and I've forgotten what the other thing I really liked was, I'll come back to that. It's one of those moments, Thibault. Is this an easy DIY route to follow? I mean, we talked about this manually. I can see it's tough to do it manually, but even with using a platform like PriceLabs, can somebody do it themselves or do they need somebody to help them out and do it for them? I know there's dedicated revenue managers in large companies, but if you're just starting out or you've just got one or two properties, can you do it yourself?

Thibault Masson
Yes. So the one, two, three properties, I'm in this case, and I did it myself. I didn't know much about revenue management before joining the company, to be really honest. I was just like you. By the way, it was just about pricing. You talked earlier about set and forget it. Quite some people use PriceLabs this way, actually. They trust the algorithm. They're going to set up basically a base price, which is going to say or indicate, I'm in this market, my property is maybe more high end or more affordable, or I'm in the middle of the market. Then they will let the prices fluctuate with what we see in the data. Maybe they're going to... What they're going to set up as well a minimum price. What they're going to set up as well is at least some minimum stay restrictions. We don't take bookings below five nights, for example. Then they would let the machine go. That's what I did. I would go every month just to say, Oh, do I need to refresh this base price? This is that big price that's in the middle of everything.

Thibault Masson
PriceLabs, for example, has tools to give you advice on how to come up with this base price.  We're going to analyze your immediate area, we're going to analyze the 250 properties around your listing and to see how they're doing. And again, depending on the standard you think you are, I'm going to say for this standard, your base price should be this and that, and then you're going to make prices fluctuate. So it's very easy. Now, if you are a larger company, you have more listings. Again, usually companies that have fewer than 100 listings will do it on their own. Again, it's an average, obviously, but that's what we see in the sense that usually would be the person in charge of the supply of the inventory or it could be also a reservation manager, can't depend, but somebody who's already got a job, they're also tasked with doing this. They would add a new property to the PMS. They would basically synchronized with the PMS PriceLabs. That's going to show up in PriceLabs and they're going to sell it up. And what's good is that you can then have groups. What I mean is that you can imagine you have a group for a certain market, or you have group, for example, your new properties, and imagine your new properties, maybe you want to be a bit more aggressive because you can get reviews fast because as soon as you have reviews, you have this virtual circle, you can increase your prices.

Thibault Masson
So maybe a new listing, you're going to add to this group that's only got its own settings. It's not the same things about price strategy or minimum stays. It's all there. It's actually doable because then you basically think more of groups. You don't have to have an individual strategy for the 100 properties you have. You can, but also you're saving time suddenly. Right? Also we have the analytics. With analytics, you're able to see some performance metrics and see which properties are not going okay. And then you can focus on those and do the changes for those. So even if you have again inventory below 100 and the listings is still doable because basically the ones in red are the ones where you need your attention. Now, what we see after between 100 and say 400, something like this, people tend maybe to hire a consultant. So the who's going to do this for them. There's plenty of revenue management companies who do this. Then after this, they tend to hire someone. Again, that's what we see. You don't have to wait to have more than 100 listings to hire a revenue management company. Maybe with 20 properties in 'luxury', maybe you want to do this because if you miss out on the booking, that's a lot of money you're missing out on.

Heather Bayer
This is certainly.... A part of me wishes I was back in my business, because I think this.... it sounds like such fun to do.

Thibault Masson
It is. It gives you a so... Yeah, go ahead. I love it as well.  I'm excited.  Sorry.

Heather Bayer
What else was I going to ask you? Oh, I know what I was going to say. It was about revenue management and the growth, in fact, of the whole discipline of revenue management, because 5 or 6, maybe 10 years ago, it wasn't a discipline in its own right. Now there is a growing network of revenue managers and then there's even a conference that is dedicated to it.  Amy Hinote's DARM, Data and Revenue Management, Conference, which incidentally will be in Nashville in December, the first week of December.... will I see you there?

Thibault Masson
I may not be there, because I think we have holidays with the kids.

Heather Bayer
Well, I'm sure PriceLabs will be there.

Thibault Masson
For sure.

Heather Bayer
Because it is one of the...  It's such a focused conference. But this is something that was never thought of 6 or 7 years ago. The fact that there would be a conference totally focused on data and revenue management just shows how important it is.....

Thibault Masson
.... How important it is.  How important and how little education there is out there. It's not just a conference for people who know things. A lot of people go there to learn things. The value is amazing because in terms of revenue management, like I said, hotels are there. Each hotel has a revenue manager. But because they go to hotel schools, in a way, and they do exist, and you have revenue management classes. But vacation rentals are different. A hotel is one building with room types and maybe you have 22 bedrooms or it's 20 single beds and 20 double beds. The case for [vacation] rentals, you have 50 properties. They're all different. Different locations. It's very different. You can't completely transfer these skills from the hotel world to our world. A conference like this, or that's why we try to do at PriceLabs as well, we know that we have to educate people. It's not that we think people don't know their market, they will know their market. But again, the skills are just happening now. There's not many schools out there for vacation rentals in terms of revenue management. On this podcast, the more we can do to say there's resources out there, just try to learn more and see for yourself; it's very important.

Heather Bayer
It's been interesting. I've been talking to quite a few people recently before I started really delving into PriceLabs and asking them who do they use? It's been interesting to hear so many people now saying, Oh, I'm using PriceLabs. Those are much smaller owners, smaller companies, whether it's somebody managing four or five properties that they own themselves, like you owning your two properties. So it is for the smaller operator just as much as it is for the other companies.

Thibault Masson
I was surprised when I joined the company to do marketing. I was expecting to have like... Which they do have large property management companies as clients with hundreds of properties. When I look, the biggest number is people with one or two properties, because there's plenty of us out there. But it does mean it's interesting because a lot of people basically are on Airbnb and Airbnb has a dynamic pricing tool, as I said, but they don't trust it. They say, Wait a minute, you're going to be deciding the prices for me, but how do I know it's in my interest of the host? And it's true because Airbnb, in a way, their interest is to make sure the booking is happening, and the guests and the host are happy. So it's not optimizing completely in the host's interests all the time. That's obviously right. So you see a lot of people, even with just one property on Airbnb, not even on multiple channels, not even using a PMS or anything, they directly plug Airbnb into PriceLabs. And to me that was fascinating. It's fascinating because that's talked to how important price is it, and people are realizing this, and how people are willing to learn the tools and use them even for this one property.

Thibault Masson
And it's very affordable, I must say, as well. That's also something to understand, is that it's very affordable. I think prices start $19 a month for one listing, so you earn it back very soon. So here I just want to say that it's not to push the prices. Again, I think almost all competitors are about the same price. I mean, we're of course, we have a good price. But what I just meant to say what's fascinating, we hear a lot about AI, all these things. Certainly all these tools give you so much power for not too much money. It is mind-boggling. We're not using AI, but we're using machine learning, which is a kind of like data thing in a way, close to like a family of AI, if we will. To me, it's very impressive how all these tools, in a way, we're talking about how AI is going to change vacation rentals. But then pricing has been here for a few years, so it's only there. It's really interesting. I can't wait to see what's going to happen other than messaging and all these tools because that's impacting our industry big time.

Heather Bayer
Exactly. Tell us a little bit more about PriceLabs now and what could somebody expect if they sign up?

Mike Bayer
Oh, sure. So if you go to pricelab. Co, you can start, you can create an account and start a free trial for 30 days. So basically you're going to go to PriceLabs and if you have a PMS, you're going to select among... I think I know we are integrated with more than 100 PMSes, so there's a good chance your PMS is going to be the list, and then you're going to import your listings. And all the research or the data I talked about, you're able to do this for free. The 30 days only start when you hit the button and say, Start syncing. We're going to send them back the prices to your PMS, and the PMS is going to send the prices back to an Airbnb and book in the rest every 24 hours. So for 30 days, this is free, right? You can see this. We have free onboarding. So it means that, for example, every day we do a live training every day. You can get your training, get your questions, answers, because again, education is key in this thing. If you don't educate people, help them use the tool, we're not successful, they're not successful because then we miss everytime we're missing out.

Mike Bayer
That's really our goal. We're big on this. Yeah, that's what we do. Last thing I want to say as well is that a mistake I made before doing PriceLabs was to think it was about pricing. It's not just about pricing, it's about minimum stays. For example, in my market, people used to do Saturday, Saturday, seven days, and I used to do this only. With PriceLabs looking at charts, looking at data, I could see there was a lot of demand for five and six nights, but nobody was doing this. You're like, You know what? I'm going to open my calendar. It's easy in PriceLabs create rules basically, and the rule is like, if I already got bookings, if in between there's a gap, and if the gap is I'm okay with opening for five or six nights, but I am going to increase the prices by 20% on top of what you, PriceLabs, is telling me to put because I still have fixed cost, I still have cleaning to do the same villa. But I'm okay with that and I know there's demand and it worked out. It was fascinating for me.

Mike Bayer
It was the first week after PriceLabs. When you join PriceLabs, whoever you are, do marketing, sales, developer tech, everybody has to do customer support. Even today, sometimes when you ask support for help, you may be talking to the CEO or the founders. Everybody has to do this. I did my training. After a week, I came back, I'm like, Wow, I have to change settings for my property because I never do this minimum stay thing. I have to be flexible as well in stays because, of course, I have to impose longer stays in the high season, shorter stays in between. But what do I do between two bookings? I should open that, but this is the way I made this. That's what you'll be able to see with PriceLabs, the pricing and the minimum stays. Again, usually you start out with just a few settings, you see how it runs, and you learn more, and you start doing more. Don't do everything at first.

Heather Bayer
Tell me what the 2023 breakthrough release is. What is it bringing to current and future clients? I'm sure we have some current clients on here and listening to this. What is new?

Mike Bayer
PriceLabs was founded in 2014 and I think it has had 10 versions of its pricing algorithm, the thing behind that creates the pricing. Last week, we launched a brand new version that's completely revamped version. Basically, it's not just an update in the sense that the algorithm has been replaced with a new algorithm, something completely new. It's been rewritten. The difference is basically we go from a market-level pricing to hyper local pricing. Basically what it means is that we know that from one side of a city, from one side of the mainland to another, the market is not the same. So we focus on the trends of what's happening in your property, in the properties around yours to be able to even trade price predictions that are even more accurate. That's very unique in the industry. We're the only ones doing this. Also, another example of what we're doing, we've released something called Smart Presets. Smart Presets is a way for you to easily take control of the algorithm. There's 30 different customizations we have on our software. Customization, I talked about this earlier, like day of the week, seasonality, all the things you want to customize in the algorithm.

Mike Bayer
It may be a lot. It could be overwhelming if you're just starting out. With Smart Presets, basically, you tell us whether you have a short term rental is the first time you're using dynamic pricing or not. And depending on this, we're only going to show you the customizations you need to think about for the moment, and you can even give you advice on the settings for each customization. So again, it's just more powerful, more accurate, and you have more control in a more user-friendly way. And that's just the algorithm. We also have like 25 other new product features. You should just go to pricelabs. Co/breakthrough. And my team and I have created this page to make sure you have all the information for this. And we're pretty excited. I must say it's a very big launch for PriceLabs. Even if you're a new user, you'll be able to have this new algorithm, for example. If your current user will tell you how to migrate to make sure everything goes well, there's too big change.

Heather Bayer
That sounds fantastic. I'm learning it at the moment because as I said in the introduction, we only endorse product. Where we like the people, we know the products. I know of the products from the people that I've spoken to who use it, but I also want to educate myself. I'm out there educating me right now. Thibault, it's been an absolute pleasure to have you back after eight years.

Mike Bayer
Thank you so much. Thank you so much, Heather. Just to make sure, I did see you in between. We saw each other in different places, which.

Heather Bayer
Is fantastic. We sat together in Amsterdam. I'll never forget sitting together with you in Amsterdam while you were trying to teach me how to use Instagram. That was five years ago. I still haven't done that yet. But it's always a pleasure when we do have time to get together. Yeah, last time was only a couple of months ago on that... On the boat. We got down a lot on that boat in Barcelona.

Mike Bayer
Look at us.

Heather Bayer
Yes, with the… I'm not a drunk magician, with the sick magician. Poor guy, he was not drunk. He was terribly seasick, which I thought if you're going to be seasick, why do you take a gig doing your magic on a boat? It's a shame you couldn't have magic to see sickness away, but it was a little bit rough, I have to say. So if I won't see you in Nashville, I hope that we get the opportunity to meet at another venue at some time in the near future. In the meantime, lots of love to you and your family and it will be good to see you again.

Mike Bayer
Same to you, Heather. Thanks a lot. Thank you, everyone.

Heather Bayer
Thank you so much, Tivo. What an absolute pleasure to spend some time with you again. As he said, it's been eight years since he's last been on the podcast, but I last saw him in Barcelona just a couple of months ago, which was great, and to also meet so many of the PriceLabs team there as well. I think I'm pretty much educated now on dynamic pricing. I'd love to have my time over, go back and certainly adopt some dynamic pricing strategies and better revenue management strategies than we had in place when I ran our company. I always wanted to, but for the longest time there just wasn't the data there and then, I don't know, it just never came to be. No amount of Andrew McConnell telling me over and over again I was leaving money on the table, I knew it, but hey, can't have that time back. But if I did, then I would be heading down that road for sure. I would be using software, I would get some automations on the way, and at least trying it out. There's really no excuse for not trying it out. And given PriceLabs is offering a 30-day free trial where you can give it a whirl, why would you not do that?

Heather Bayer
So anyway, you can go to PriceLabs and check that out. All right, that is it for another week. Time is moving on. I am going… And you're going to hear it, be hearing about this. Those of you who listen to this podcast year after year, and I know I have some wonderfully loyal listeners and subscribers who have been listening for the last nine years. It's coming up to the fall and it will soon be the end of October and I'll be heading down to Gulf shores again for the winter. Cannot wait. I don't mean I can't wait to get out of Ontario, but I really look forward to my winters. We've had a great summer here in Ontario, but I will certainly be enjoying my winter down in Alabama. As ever, those of you who are in Alabama who want to do a meetup, I will be there from the end of the beginning of November, November first through to the end of March. Let's get something together. I met a few people last year. It's always a pleasure. It was nice to go sit outside and have a cup of coffee or go for lunch or something like that.

Heather Bayer
Let me know. You can always contact me. Go to vacationrentalformula. Com, go to contact and send me a message. It would be lovely. Okay, that's it. Thank you for tuning in. Always a pleasure to be with you. I will hand you over to Mike for a few words from our sponsor. We hope you enjoyed this episode of the vacation rental success podcast. Don't forget to check out our sponsor, PriceLabs, and their dynamic pricing and revenue management tools. Click the link in the description of this episode for more information. It's been a pleasure as ever being with you. If there's anything you'd like to comment on, then join the conversation on the show notes for the episode at vacationrentalformula. Com. We'd love to hear from you and I look forward to being with you again next week.

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