HYH-35 “Is the Price Right?” Andrew Kitchell, Wheelhouse (Host2Host 2017 vendor series)
Release Date: 05/26/2017
Prior to the Host2Host 2017 conference in Portland, Debi Hertert of HostingYourHome interviewed Andrew Kitchell of Wheelhouse. Wheelhouse provides a pricing service for short-term rentals. They analyze the pricing of the local home-sharing listings, local hotels, and current events. Those three components affect pricing of accommodations, and Wheelhouse uses data scientists to make highly informed pricing decisions. The current product allows a high degree of personalization by the host, as Andrew discusses during the interview. Debi is a user of Wheelhouse and is highly interested in how it works. Here are some points that came out in the interview. Listen all the way through, for Andrew’s special offer!
- Andrew talks about how Wheelhouse started. His home was in the first 100 homes that listed on Airbnb. He co- founded the company after one of the principals attended a Y Combinator Accelerator meeting and heard about “Airbed and breakfast”; and now they have grow to about 23 people.
- They analyze the home space, like Airbnb, Expedia, and Trip Advisor; the hotel space; and the event space.
- They then analyze your particular listing and how it has performed in the past compared with other nearby homes
- Allow customers to customize how they want to handle special situations, like orphan nights, weekends, etc – the newest platform allows personalization on the part of the host.
- Debi mentioned the emotionality of setting your pricing. You don’t want to give it away, but at the same time you don’t want to set it too high. It sounds like Wheelhouse is giving the host a lot of control.
- Wheelhouse does recognize that setting prices can be emotional and in some ways it is better to remove some of that emotionality through using the software. But if you want to manage weekends, seasonality, etc., you can now do that. Wheelhouse really recognizes that there are many nuances to setting prices that hosts want.
- Debi asked about her Gull House rental at Seal Rock, Oregon. It’s in the path of the eclipse, a once in a lifetime event. Debi wants to be in the middle, not too low but not too high. For now, she has just blocked it out. The Wheelhouse pricing for that month shows the eclipse time as an elevated price, but whe wondered if that set the price for the whole month? Andrew replied that the eclipse is sort of an “extreme” event; with cases like that, the impact should be limited to the days for that event. That’s the challenge for the pricing engine, and it should be appropriate. But also, Wheelhouse allows the user to set specific rates for certain nights. It recognizes that they are not perfect, and that the host might pick up on something that Wheelhouse software hasn’t found.
- Debi asked about special configurations, like max nightly price etc.
- She asked about Home Away and Trip Advisor and Airbnb; at this time, they show up as separate listings on the Wheelhouse dashboard. In the next few weeks, if you work with Guesty, or Booking Sync, you will be able to link to Wheelhouse.
- How does Wheelhouse differ from other dynamic pricing? Investment in pricing science: they have four data scientists on the team, three are PhDs. They feel like they will be able to do the best predictions. Part two is the control they give the hosts, offering last minute discounts, seasonality and other customizations. He has a lot of respect for other pricing companies, like Everbooked, but thinks they have produced a well-differentiated product.
- Debi asked about Airbnb’s smart pricing. Andrew said he isn’t sure of the long term role for Airbnb (or any other “marketplace” provider) in producing best pricing. He says they are a great team, have great scientists, but as they are the marketplace, they may not be the best in setting prices. He thinks pricing can be done best by third parties.
- Debi asked about cost. Wheelhouse charges about 1 percent of “managed revenue”, and says that they return closer to high 20’s percentage; and that they have never lost a paying customer (!). They also do not charge hosts for nights that the hosts end up setting their own rates.
- Debi asked then, how easy is it to cancel? She had an experience using a different company that entered prices into the calendar way into the future and had a hard time deleting it. Andrew said that hosts have full control.
- Andrew discusses a special offer in which new users can get 10 free bookings!