Scenario analysis
Rate or Occupancy? Two Strategies Compared Over a Year
Does the property with the highest nightly rate earn the most by year end?
The most common mistake in short-term rental is treating the nightly rate as the only thing that sets income. Annual income is the nightly rate multiplied by the nights sold. Push the rate too high and occupancy falls, taking total income with it.
| Scenario A — high rate | Scenario B — balanced rate | |
|---|---|---|
| Average nightly rate | ₺3,800 | ₺3,000 |
| Annual occupancy | 50% | 70% |
| Nights sold (of 365) | 183 nights | 256 nights |
| Annual gross income | ₺693,500 | ₺766,500 |
Scenario B charges ₺800 less a night and still ends the year ₺73,000 ahead on gross income. The difference comes from 73 extra nights sold.
What this tells us
- The nightly rate is not a performance measure on its own; it only reads alongside the nights sold.
- Cutting the rate isn't always right — where occupancy is already high, cutting it reduces income. The real question is which rate produces which occupancy in that particular area.
- That is why we review the rate weekly: as season, events and competing supply shift, so does the balance point.
Source: PeraHomes guide — Is My Home Right for Airbnb? What Would It Earn? — read the guide. These figures are regional averages; an individual property can perform differently.
How does this arithmetic work out for your property?
Let's prepare an assessment for your property, using occupancy and rate data from your area.