Launch Strategies and How the Algorithm Works on Digital Platforms
Digital platforms such as Airbnb, Booking and Decolar essentially function as marketplaces. As a reflection of what they display, these platforms always prioritize the best products, i.e. those properties that sell the most and have good reviews. After all, their ultimate goal is also to maximize profitability. Therefore, by ensuring that the most attractive properties are at the top of searches, they increase their own commissions.
When a property is launched, it goes through a probationary evaluation period, which can last from 3 months to 12 months, during which the platform's algorithm analyzes the initial performance of the listing. This period is crucial in determining whether the property deserves more exposure on the first pages or whether it will be promoted less. The algorithm is based mainly on two factors:
- Volume of Reservations: A property that receives a lot of reservations soon after launch is recognized as being in high demand, which increases its visibility.
- Quality of Reviews: The first reviews directly influence the positioning of the property in searches. The better the initial reviews, the greater the exposure.
Maximizing Performance in the Probationary Period
Here at Omar do Rio, with over 11 years' experience in the vacation rental market, we know that the key to initial success lies in a solid launch strategy. During the probationary period, we adjust rates aggressively to ensure that the property receives many bookings quickly. Our aim is to create momentum for the listing by seizing the opportunity to improve its ranking in the algorithms through:
Promotional prices that attract guests quickly.
Constant monitoring of initial reviews to ensure that the first feedback is positive. In this way, we are able to place the property in a prominent position from the outset, increasing its visibility and ensuring a continuous flow of bookings.
How the Algorithm Works
The algorithms of the digital platforms prioritize properties that maximize profitability for them, and to do this they take into account several factors, including:
- Conversion rate: The frequency with which a property is viewed and booked.
- Response rate: Ads with hosts who respond quickly are more likely to be prioritized.
- Cancellations: Frequent cancellations hurt the property's position.
- Listing updates: An updated calendar and regularly adjusted rates are signs of relevance to the algorithm. That's why, at Omar do Rio, we ensure that all calendars and rates are updated at least once a day.
- Calendar adjustments: Ads with outdated calendars tend to lose position. That's why we always keep our calendars up to date, to ensure that the platforms recognize the property as active and available.
Consolidation period
After the probationary period, which can last from 3 to 12 months, the listing begins to consolidate. Properties that perform well, with a constant volume of bookings and good ratings, tend to maintain a more stable position on the platforms, ensuring greater visibility in the long term.
With our long experience in the market and our database, Omar do Rio is able to predict market movements, which allows us to adjust strategies and prices in real time. This puts us in a privileged position to maximize the profitability of our properties, compared to owners who manage their units themselves or amateur companies that don't have the same tools.
Dynamic Pricing and Technology Strategies
Once the property is consolidated, we start applying dynamic pricing strategies to ensure its competitiveness and continued profitability. At Omar do Rio, we use advanced revenue management tools, such as PriceLabs, which automatically adjust prices based on:
- Demand and seasonality: We adjust prices to take advantage of peaks in demand and guarantee occupancy in low periods.
- Competition: We monitor similar properties on the market and adjust prices to keep the property competitive.
- Market trends: Based on our 11 years of experience and our database, we predict fluctuations in the market and adjust in advance.
These technologies, coupled with our market knowledge, allow us to maximize returns for owners much more effectively than any amateur or independent management.
We combine 11 years of experience, expertise in market forecasting, and the use of advanced technologies to maximize the performance of each property on digital platforms. During the probationary period, we use aggressive pricing strategies and ensure constant updating of ads to boost visibility and guarantee solid consolidation. Our knowledge and tools allow us to deliver much higher profitability compared to owners who try to manage their units on their own or with less prepared companies.
If you want to maximize your property's potential, contact us. Let's work together to make your property a success in the vacation rental market!
Omar Farhat,
CEO of Omar do Rio.