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The Occupancy and Rate Balance -A Case Study

March 12, 2019

When it comes to revenue management, most people think of increasing rate. What they do not understand, is revenue management means balancing rate and occupancy to achieve maximum revenue.

Just recently, we on-boarded a client in the south. They have a beautiful park serving local industries who need spaces for workers in the area. We started off using their monthly rate,  prepared their website and marketing analysis reports, and their comp set analysis. We soon learned some interesting data that helped drive our advice to them.

The comp set showed they were the nicest park in the area, but their rates were $100 a month higher than their comp set. Though they had some features (paved sites) that their competitors lacked, it did not make guests want to pay $100 more a month. Also very important, we noticed that when potential guests visited their website, they were leaving after viewing the rates page.

On our next weekly call, we spoke to them about lowering their rate to achieve the occupancy needed to hit the revenue numbers. Needless to say, they were not thrilled with our advice. They took almost a week to discuss this internally before giving us the green light.

The results were nothing short of amazing. Whereas the previous month showed site night pickup of 133 site nights, the month we lowered rate, the same number of days picked up 562 site nights and revenue has more than TRIPLED! This park can hardly keep up with the calls and the demand is off the charts.

Only careful data analysis and marketing reports give this kind of insight, and it is what we do every single day.

Let us help you walk that very fine line between rate and occupancy.