Do the Analysis
You’ve probably heard the adage, “That’s why they play the game”? Well, “That’s why you do the analysis,” is my vocational equivalent.
I’m embarrassed that I still find myself in this position at times, but perhaps you can relate…. How many times have you also been mid-quandary, flummoxed at how something could possibly be? You know X, Y, and Z, and things just aren’t adding up! But do you really know X, Y, and Z? Or are you assuming something because X, Y, and Z have always been a certain way? Again, convicting myself on this one – there have been many times when I’ve just assumed I knew or I took someone else’s word for it that what they said was tested and true. And I was wrong. And they were wrong. And I was “wronger” for blindly accepting something wrong that someone else told me was true.
One of the most common culprits for me, especially early on in my short-term vacation rental revenue management career (fresh from hotel world), was the elevated importance I assigned to comps and comp sets. I’m convinced that giving too much credence or authority to comps and comp sets can gaslight a revenue manager into further self-doubt than they already experience by the nature of the work they do.
According to the Newport Institute for mental health, “Gaslighting is a form of psychological manipulation in which the abuser attempts to sow self-doubt and confusion in their victim’s mind. Typically, gaslighters are seeking to gain power and control over the other person, by distorting reality and forcing them to question their own judgment and intuition.”
There is a place for comps and comp sets. And for me, that place is very defined and compartmentalized.
While they can be useful, I refuse to use comps to validate the success or failure of my revenue strategy. Doing so creates attachment to an often-misguided truth (“blind leading the blind”) and lends itself to creating false security and/or self-doubt and crippling anxiety. I am more amenable to utilizing comp sets in aggregate vs. property-to-property comparisons (e.g., My 5BR beachfront home with a pool compared to a neighboring 5BR beachfront home with a pool) to determine my rate position among available homes at any given point in time. It can absolutely be helpful to know how your home is price-positioned within a pool of other homes available over a particular date range; however, getting too deep into the weeds comparing where specific homes are priced based on how similar it is to your property can be dangerous. Where I’ve found similar features and characteristics to be particularly useful, is in measuring how those types of homes are performing (again, in aggregate) for a specific time period.
Zen teachings emphasize self-acceptance and embracing one's true nature. In Zen, there is an emphasis on the concept of "no-self" or "emptiness," which suggests that the self is not a fixed, separate entity but rather a constantly changing process influenced by various factors. By understanding the impermanence and fluidity of the self, individuals can develop a sense of self-acceptance and let go of the need to compare themselves to others. By recognizing the emptiness of the self, one can become free from attachment and consequential suffering. That may sound like a bunch of mumbo jumbo, but hear me out…
We’ve all been in the situation where an owner claims that the home next door, which is “exactly the same” as theirs, is completely booked for the season or the neighbor’s nightly rates are double the nightly rates of their home, and because of those things, clearly something must be wrong with what you’re doing. Talk about gaslighting! This is the danger of allowing the pricing of specific comps to drive your pricing/yielding behavior (something owners tend highlight frequently), because as soon as you are drawn into the granular game of analyzing the minutiae at the expense of pinpointing the actual statistically significant variables, you lose. I cannot emphasize enough the importance of pinpointing the actual statistically significant variables; because without them, it’s just one person’s (usually overly fluffy) opinion of their home versus yours. The idea of "no-self" or "emptiness" is far from how it may initially come across (ordinary or plain); opening to emptiness actually embraces uniqueness and precious value – for our purposes, of the individuality of each home.
Caveat: It’s entirely possible that you or I did mess something up and the owner mentioned above is right – it happens! Of course, we own up to those times in those instances, but to assume that someone is right just because they’re comparing one set of data points to the exclusion of a plethora of other relevant variables, doesn’t automatically mean that your strategy is wrong. Aside from the obvious possibilities that perhaps the neighbor’s home booked up too fast or that the only reason you can see that the neighbor’s rates are double yours is because they haven’t sold, there are many other factors at play, and you only have control over yours. As we like to say back home, it's usually best to just watch your own bobber.
-Sarah
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