In this article we talk about the reasons why LiveLocal does not offer daily dynamic pricing (different prices for days of the week), and why the prices advertised by hosts on LiveLocal are only valid for up to 90 days into the future.
What about changes in demand?
LiveLocal is about stimulating the New Zealand tourism industry, in the short term, following the dismount from COVID-19 Alert Levels. This means catering to the needs of Kiwi travellers in the near term.
What we have learned from monitoring booking lead times over the past year is that: the average Kiwi books less than 90 days in advance of their check-in date. This is why, every price quoted on LiveLocal is only valid for 90 days from ‘today’.
The below graph shows the lead times we have been tracking. The ‘outliers’ of 129 days in advance, were all overseas travellers. Every last one. Our Kiwi travellers are around 15-50 days in advance.
Our thinking is that being able to accept bookings only 90 days into the future gives guests and hosts time to react to sudden changes in supply, demand, or even personal circumstances.
It also reduces the likelihood of guests and hosts needing to cancel a booking. A lot can happen 6 months before a travel date, so we think it’s far better to keep booking lead time shorter, to build certainty and confidence for every booking.
What if I want to charge more for extras or weekends?
We know Kiwis don’t like complicated prices, hidden add on costs, and additional guest fees that they only see when they head to check-out and pay. They also really don’t like being fleeced with higher costs on weekends or … Thursdays’ (what’s with that?). So, our vision is to undo all this and create a platform with clear, all inclusive, transparent, and consistent pricing.
So as a Host, how do I determine my price and will this be competitive?
What the LiveLocal pricing system means is that Hosts need to do some extra work to model and calculate what their flat rate price should be overall, to account for everyday fluctuations. So let’s do the maths!
On other platforms, Sally's normal prices would be $90 per night on Monday, Tuesday Wednesday, then $110 for Thursday, Friday, Saturday, and Sunday. Sally would also normally charge a cleaning fee of $70 per booking and, on average, most of her guests book for 3 nights minimum.
On LiveLocal Sally’s place would be listed for a new flat rate of $120 per night any day of the week, including cleaning fees (a flat all inclusive rate).
Sally's new flat rate price of $120 will still be competitive, even on her lowest selling days on Monday, Tuesday and Wednesday. This is because, even at Sally’s usual price of $90 per night, on other platforms her guests would pay $145 per night to book her place. This is because of higher commission fees compared to LiveLocal.
Also, with zero host commission fees, on LiveLocal Sally will receive the entire $120 per night she is charging. Previously, on other platforms, Sally would only have received $116 average per night. This would have been even lower for her usual $90 per night price.
Here is a picture of this example:
Flat pricing on LiveLocal is not only cheaper for Guests, it’s also better for Hosts too!
What about adjusting prices for events?
History tells us that all the really big events in New Zealand are announced 6-12 months in advance. Since the LiveLocal calendar is only unlocked 90 days into the future, it’s more likely that people looking to book accommodation for those events will do so well in advance via other platforms, and they are prepared to pay premium prices.
Lastly, it’s also very unlikely that big events will dominate the New Zealand tourism scene for quite some time yet, due to public safety related to COVID-19. We are confident that, following the dismount from current Alert Levels, LiveLocal hosts will effectively manage their calendar 90 days into the future.
What if a big event comes along within the next 90 days?
With the current restrictions on mass gatherings, big events are not likely to happen for a while yet in New Zealand, but it could happen.
If (say) there was a last minute event coming in the next 90 days and a host wanted to ensure they had the best price, the best thing a host can do is block the calendar for their main listing and create a ‘special price’ listing that is open for only those nights. The listing could be identical in every way, but only available for those specific nights. Since a review is linked to a Host, the new special listing would carry the history of reviews that a Host has built up on their main listing.