Revenue management, answered

Should I price a multi-listing property to stay on short-term rental, or convert a poorly performing unit to a long-term rental instead?

Run the numbers on both scenarios before defaulting to short-term. A poorly performing unit dragging down your portfolio's blended metrics often costs more than the stable, low-overhead income a long-term lease provides. Underperformers are not always salvageable through pricing alone.

By Jack Murphy, Head of Revenue Management at UpRev. Running pricing for US vacation rental managers since 2017.

Diagnose Before You Decide

Pull occupancy, ADR, and RevPAR for the struggling unit over at least 12 months and compare it against comp-set benchmarks in the same submarket. If the unit is consistently underperforming comps by a meaningful margin, the issue is likely structural, not a pricing problem. Look at factors like location within the property, unit layout, amenity gaps, and review scores before assuming a rate adjustment will fix it.

The Real Cost of Keeping It Short-Term

A low-occupancy short-term unit still carries full operational costs: housekeeping, supplies, OTA fees, owner communication, and maintenance response. When those costs eat into already thin revenue, you may be managing that unit at a loss relative to the time it demands. Calculate net operating income after all direct costs, not just gross revenue, before concluding the unit is worth keeping on the short-term program.

When Long-Term Makes Strategic Sense

If the unit sits in a market with weak transient demand, strict STR regulations, or high seasonality with a long shoulder period, long-term rental can stabilize your portfolio's overall performance and reduce churn. Some managers structure hybrid arrangements, long-term during off-peak months and short-term during peak demand, which can preserve owner relationships while improving net returns. Just make sure your management agreement covers both scenarios or negotiate separate terms upfront.