Our proprietary Airbnb investment calculator creates an estimated revenue, average daily rate (ADR), and occupancy rate for an address based on historical performance data of comparable properties near to the address entered.

Our calculator is a great tool to see the potential of a property as a short-term rental. Our algorithm will search for up to 50 comparable properties within a 10-mile (15km) radius. The properties are selected based on their proximity to the address geographically and their similarities in their bedroom, bathroom, and guest count configurations. A weighted average of these properties' historical performance gives you an estimate for your selected address.

Revenue potential is a metric we use on our calculator. When creating an estimate, our algorithm identifies comparable properties and uses their historical performance to start building estimated revenue, average daily rate (ADR), and occupancy figures. Most of these comparable properties will have had differing numbers of days available, so in order to analyze these properties equally, we need to look at them as if they all were available every day of the last year.

This is where revenue potential comes in. We apply the ADR and occupancy rate the property achieved to 365 days, and we also factor in market seasonality, historical performance for that property, as well as the historical performance of the comparable properties. In the example above, you can see that the listing was available 246 days of the possible 365, generating $117,900 in revenue. By applying these conditions to a full 365 days, we’re able to calculate a revenue potential of $126,200.

When creating an estimate, we use the revenue potentials from the comparable properties to generate the figures for the next 12 months for the address that has been entered. 

How Our Data Sciences Team Calculates Occupancy Rate

In grasping the concept of vacation rental occupancy, it's crucial to delve into how Our Data Sciences Team computes occupancy rates.

Occupancy rate is determined by dividing the number of days a property is reserved by the total available days within a month, excluding listings with no reservations.

Reserved Days / Total Available Days

When assessing occupancy for short-term rentals, it's vital to account for the property's availability over time, considering that not all listings remain available year-round. For instance, a property might have been accessible for booking 150 days over the past 12 months and occupied 50% of that time, resulting in 75 days of occupancy.

However, a high occupancy rate isn't always advantageous; it can potentially harm revenue if the host sets a nightly rate too low, leading to numerous reservations but diminishing overall earnings. Moreover, consistent occupancy presents challenges in terms of cleaning, maintenance, and guest turnover.

Achieving an optimal occupancy rate entails striking a balance that benefits both hosts and guests.

What Does "Days Available" Mean?

"Days Available" signifies the number of days within the last 12 months that a property was open for booking by the host.

Understanding this metric is pivotal in analyzing short-term rentals (STRs). Unlike hotels, STRs aren't perpetually available throughout the year. Hence, to gauge a property's true occupancy rate, one must consider the number of days it was bookable.

For example, a property might have been bookable for 357 out of 365 days. With an 85% occupancy rate during those 357 days, it translates to a total occupancy of 303.5 days over the past year. Conversely, another property might have been available for only 50 days, with an 85% occupancy rate, resulting in 42.5 days of total occupancy.

Several factors can influence the variation in "Days Available" for STRs, such as hosts using the property as a second residence, undergoing renovations, or blocking days for cleaning purposes.

Analyzing your "Days Available" can offer insights into your overall revenue generation, with fewer available days potentially leading to lower revenue. Additionally, comparing your competitors' "Days Available" can provide context for their revenue performance and help you assess your competitive standing.

Defining an "Available Listing"

An "available listing" refers to a listing with at least one available or reserved day in the previous month.

The count of available listings is updated monthly based on data from the preceding month. For instance, if you're examining the tool in April, the data available would be from March.

However, if a listing completely blocks its calendar during the reporting month while remaining active on platforms like Airbnb or VRBO, it's not considered truly active, as reservations couldn't be made during that period.

Distinguishing Between Booked and Blocked Calendar Days

In analyzing STR occupancy rates, understanding listing availability is paramount. At Our Data Sciences Team, we focus on a listing's occupancy rate only when it's available for booking, providing the most accurate reflection of booking performance.

Many hosts don't list their STR full-time and may block off days in the calendar for various reasons, such as personal use or adherence to market regulations.

For instance, if a listing was bookable for 320 days out of the possible 365 over the past year and occupied 52% of those available days, the host would have blocked the listing for 45 days.

Our Data Sciences Team employs advanced artificial intelligence and machine learning technology to differentiate between booked and blocked days accurately. By analyzing 16 different booking signals, such as stay duration and lead times, we ensure precise booking performance metrics for individual listings and entire markets.

Distinguishing Identical Listings

Through our de-duplication algorithm, we accurately match properties listed on multiple platforms, ensuring the reliability of reported performance figures.

Many hosts list their properties on multiple booking channels for increased exposure and booking potential.

To prevent inflation of figures and misrepresentation of market performance, we've developed a unique algorithm to identify identical properties listed on platforms like Airbnb and VRBO. This algorithm considers 14 metrics, including location and listing details, to determine duplicate listings.

Matched listings display both Airbnb and VRBO logos, indicating combined performance across both channels for the past 12 months.

Data Sources

Our data is sourced from various channels, including scraping Airbnb and VRBO listings, partner data sources like property and channel managers, and individual hosts.