Transcription
The adjacency factor within Priceel Labs is one of the most underutilized and most valuable customizations that they offer. I'm going to get into why in this video.
I'm going to demonstrate how to turn it on, which is a click of a button, and then one extra selection, why we use it, when we use it, how we use it.
Before we get started though, I am Danny. I run this channel. I used to work at Airbnb. and subscribing to my YouTube channel is going to be a very profitable investment for you. It's free. And I'm going to tell you why. With my pricing strategy, you're going to make thousands of dollars extra every year.
Now, if you price your listing at more than $150, you will make more than $10,000 per year with my pricing strategy because my pricing strategy is best in the world. Now, it's taken me 10 years to say that. I have never encountered another pricing strategy better than mine and I have come upon many of them.
Now, if you believe yours is better after watching this video, which is going to be in a series of a few videos that I make in conjunction with a live course that I'm putting on where if you want to dive deeper into these concepts, you can join me and some host. I'll explain more of that at the end. This video though is to use adjacent factor and why 100% of listings would want to use adjacent factor. So, let's get into it.
I have here my price labs up. This should look familiar to you. And here is adjacent factor. So I have 50% discount within 1 day of reservation. What is adjacent factor? Before we get into that, we need to understand how supply and demand work and actually how demand works in this case.
Now if I have zero occupancy and and I'm talking about future occupancy, all of my days are available. Now let's take a random Wednesday. Somebody could book Wednesday, Thursday, Friday. Someone could book Tuesday, Wednesday, Thursday. Someone could book Saturday, Sunday, Monday, Tuesday, Wednesday. We check out on Thursday. As soon as I start filling my calendar, the demand on each of those days starts to change.
Now, let's go to my listing here. I have a reservation next week, the 11th, for checkout on the 15th, which is a Monday. Now, if I want that 15th to be occupied, I have one option. They have to check in on Monday. As opposed to they could check in on Sunday, Monday, Tuesday, Saturday, Sunday, Monday, Tuesday, Wednesday. Now I have just one option. So that means the demand on that day is lowered. That's what adjacency factor takes into consideration.
Okay, if you now have a booking, the day after that booking, there's less chance that it's going to get booked. If demand is lower, thus the pricing has to be lowered. That's an important concept. Whenever demand is lower, and demand can be lowered by a variety of factors, then you lower the price. If demand goes up, weekends, demands are pretty much up. Everyone in the world, that's why weekends prices are higher.
Now, if we scroll over this, I want to dive a little bit more deeply into price laps. You could see here adjacent factor is negative 50%. Why do I do that? How do I know that? That's a good question. Well, how about Okay, so I know how to put it on, but how do I know what number to put here, and you don't. I don't. You don't. The expert that claims to know that he knows, he doesn't know. It's a guess. That's the trick here in pricing. It's a guess. It's an educated guess. I may have started with 25% discount. And let's say I got no bookings. The market has spoken. Okay, now I move it up to 40%. Maybe a few more bookings, but not as much as I want. Now I go up to 50%. Now I'm getting most of these uh days booked. Okay, good. We're good. Now maybe I lower it down to 45%. Pricing is a very long-term game. It is not set and forget. You have to keep paying attention and monitor it. And with that said, there's not a lot of monitoring to do after you learn the concepts. I take 30 seconds per week per listing to manage my listings and make a whole heck of a ton lot more than my competition in every market I'm in.
If you want proof to back that up, watch this video where I go into my dashboard and I show you what Airbnb says about my occupancy and my nightly rates that they are drastically above my competition.
So, we've talked about adjacency factor. What is it? It lowers the price on individual days after or before a reservation because the demand is thus lower for those days. And by the way, in future videos, I'm going to be going over all of these uh min customizations on Price Lab. So my pricing strategy is two-step. The first one is getting familiar with the basic concepts. Minimum price, maximum price, base price, booking lead time, booking targets. Then step two is the customization. How you're fine-tuning it. Both are extremely important.
Adjacent factor here. So you're just going to turn on the radio dial. Turn it on. Now you want to do percent, not fixed generally. Let's do percent. 50% discount within 1 day of reservation. Now here you can also apply on weekends uh but you don't want to turn that on except price tabs. If you're watching this let me give you a a uh scenario which I hope gets taken into consideration. Now we don't want to apply to weekends because if we have a checkout on a Friday then I'm I know I'm very likely to get a Friday Saturday booked. So I don't I don't need that adjacency factor. The demand hasn't actually dipped for that day. Right. What if I have a checkout on a Saturday? Well, that has even though Saturday is a weekend and here's the here's the modification to this customization I would love to see even though Saturday I have defined as my weekend the demand has dipped there because there's less likelihood that someone is going to check in on a Saturday as opposed to a Friday. So I would only really not want this to be applied if it starts on like let's say a Friday or a Thursday or a Friday but a Saturday. Yes. So when I click also apply on weekends that means that if I had a check out on a Friday that Friday would lower. I don't want that. I would only want it to lower on a if I have a check out on a Saturday. A very specific situation. So I do not click that. I don't want it to apply to weekends. I'll just make that manual adjustment when the time comes because remember we are monitoring our price.
So connecting the price is step one. You're you're drastically better than the competition. Understanding a pricing strategy. That's number two. Recording a pricing strategy and having an optimized way to go about it. That's the deepest level you can get. That's the level I'm at. That's the level I'm going to take you at through my pricing power hour, which I will explain in a moment.
All right. So, that's it. So, that's how you do the adjacent factor. Basically, everyone needs it. Now, you can uh on Price Labs, they allow you to choose what your weekends are. So, here weekend days. My weekend days are Thursday, Friday, Saturday, Sunday. The default weekend days are Friday and Saturday. So what that means is if you get a lot of Thursday, Friday, Saturdays, your week, Thursday is actually a weekend for you. If you get Friday, Saturday, Sunday, Sundays is actually a weekend for you. Okay? So what whatever days are getting mostly booked up.
Now, let me know in the comments if I've explained that thoroughly and and at your level, wherever that is, and you understand it and you know whether or not you can you know you know what it is, when to apply, and how to apply. Those are the three things I want you to know. So, I'm going to ex out here without saving and I just want to talk to you about my pricing power hours.
So, that is the adjacency factor which which I love. I use about five or six price apps customizations and I have started an online course. It's a it's going to be live with me where you come in when I price my listings every Wednesday. I've been doing this for years, a decade now. I go in on Wednesday and I price my listings. I'm now going to let you join me live while I price my listings and I'll open it up to a few questions. You will also get access to my forum which has a study guide. It has questions from other members of the community and I'm also active on there. I'm going to put a link in the description to the pricing power hour.
Just keep one thing in mind. The current price is showing here. That price is going to increase based on how many members join. Right now we're at 47. I don't want too many members. I've sent out one email and one Instagram post and we already have 47 members. So, this is a lot more popular than I thought. At 50 members, the price will go up to $49. I want that to be the case because I don't want this uh uh membership to get too busy. I don't want hundreds of people to be on the call. I want you and you need to get individual service. So, you can do that on the calls or on the forum. one of the two. I'm even thinking about taking over someone's pricing for a period of time as a as kind of a cool um experiment. Okay, you've had your listing for a year. You have made this much money. Now, I am going to take it on for maybe a few months, and we're going to compare what do I make versus what you made that year, those same months, the year prior.
If you have any questions, uh let me know down below in the comments. I'd added some screenshots from my dashboard. Or again, in other videos, I've gone through this live. Uh, that's always what you kind of have to be worried about. Or maybe I'm extra skeptical, but I'm like, "Oh, there's a screenshot here." Um, why why did he did he just manipulate that? It's possible. So, I have a live video where I where I click in it and I actually have right now a video on my Instagram that has me sharing my screen and recording it real time as well. So, this is no funny business. This is what I do every single uh week. Now I'm surprised I haven't done this course earlier because I am very confident in this.
So we have here my occupancy compared to similar listings. Uh I and and that's what it is. And then down here we have pricing. So go to your insights dashboard. If your occupancy rate is also higher than your similar listings and your nightly rate is also higher than your similar listings, then you really don't want to join my course. Give that seat to somebody else because you're already doing pretty good. Okay. Now, if you see your solid line in line with or below these dotted lines, then yeah, you can probably join my course.
So, let's have a look here at my let's just run a quick experiment here. So, my occupancy for selected listings is 28% higher. Okay, so if my occupancy 365 days times 941, that is my occupy on Airbnb. Doesn't include direct bookings, but let's just assume that. So, I am rented 343 days per year. Now that is 28% higher than everyone else. So I'm rented 96 days more than my competition. My occupancy is that much higher in ter 28% turns into 96 days. Now on each of those days I'm making $119 per night. So 119 I am making $11,444 more than my competition. I'm actually making a lot more than that because the $119 extra is what I'm making on every single night rented, not just those extra nights. But even if it was this, you're the subscription here is going to be maybe a few hundred maximum. So that's your return on investment. That is what I consider a big return on investment.
The one thing I don't address here is how long do you need to learn? So once you subscribe to this P pricing power hour, your price is locked in. I will never change that. Okay? You're going to need a period of a few months to maybe a year to master these concepts. Okay? So that's what I want you to dedicate that. That's probably the minimum time, a few months. We'll do one call per month.
All right. I'm going to end this video. Be sure to subscribe, comment, like, uh, and I'm going to do other videos on booking lead time, booking targets. These are all part of my pricing strategy and I hope to see you soon.