Owning a short-term rental is more than just handing over the keys and collecting a paycheck. To run a successful and profitable rental, you need to keep an eye on the numbers. But not just any numbers—the right ones. Here are 11 key metrics that every short-term rental owner should know (and track) to make sure their property stays booked and profitable.
1. Occupancy Rate
This tells you how often your rental is booked. If your place is sitting empty too often, you might need to adjust pricing, marketing, or your listing strategy.
Formula: (Booked Nights / Available Nights) × 100
A good occupancy rate depends on your market, but if you’re below 50%, it’s time to make some changes.
2. Average Daily Rate (ADR)
ADR shows how much you’re making per booked night. It helps you understand your pricing strategy compared to the competition.
Formula: Total Revenue / Number of Booked Nights
A higher ADR is great, but if it results in fewer bookings, you might need to find a balance between price and occupancy.
3. Revenue Per Available Night (RevPAN)
Unlike ADR, RevPAN considers both booked and unbooked nights, giving a more accurate view of your earnings potential.
Formula: Total Revenue / Total Available Nights
If RevPAN is low, even with a high ADR, it may mean your occupancy rate needs attention.
4. Booking Lead Time
This is how far in advance guests are booking. Short lead times mean last-minute reservations, while longer ones help with planning. If bookings are coming in too close to check-in dates, consider offering early-bird discounts.
5. Length of Stay (LOS)
Tracking how long guests typically stay can help with pricing strategies. Longer stays mean fewer turnovers (less cleaning, less hassle), so offering discounts for extended stays might make sense.
6. Cancellation Rate
No one likes cancellations, especially last-minute ones. A high cancellation rate can signal issues with your policies or pricing.
Formula: (Cancelled Reservations / Total Reservations) × 100
If this number is climbing, consider stricter cancellation policies or non-refundable options.
7. Guest Acquisition Cost (GAC)
This tells you how much you’re spending to get each guest. Think platform fees, advertising, and promotions.
Formula: Marketing & Platform Costs / Total Bookings
The lower this number, the better. If it’s high, you may want to focus on direct bookings and repeat guests.
8. Net Operating Income (NOI)
NOI is what’s left after paying all the expenses (but before mortgage and taxes). It’s the real measure of how much your rental is making.
Formula: Total Revenue – Operating Expenses
If your NOI isn’t where it should be, consider cutting unnecessary costs or adjusting your pricing strategy.
9. Occupancy to Break-Even Point
Knowing the minimum occupancy needed to cover costs helps you plan for slow seasons.
Formula: (Total Expenses / (ADR × Available Nights)) × 100
If you’re struggling to hit your break-even occupancy, it’s time to rethink expenses or add revenue streams (like upselling services or mid-term rentals).
10. Guest Reviews & Ratings
A high rating (4.8+ on Airbnb) boosts visibility and trust. Reviews help pinpoint areas for improvement, so pay attention to guest feedback.
11. Return on Investment (ROI)
Ultimately, ROI tells you if your short-term rental is worth it. The higher the ROI, the better your investment is performing.
Formula: (Annual Profit / Initial Investment) × 100
If your ROI is low, consider ways to boost revenue, like adding amenities or improving marketing.
Final Thoughts
Tracking these metrics will help you make smarter decisions, keep your property booked, and ensure long-term profitability. Running a short-term rental isn’t just about getting guests—it’s about making sure your business thrives. So, dive into the numbers and start optimizing today!
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