Building Conservative Projections That Hold Up in the Real World
Optimistic projections kill more STR businesses than bad markets. This chapter teaches you to build three-scenario models (conservative, base, optimistic) and stress-test them against real-world variables like seasonality, ramp-up time, and platform algorithm changes.
Year 1 reality: new listings need 3–6 months to build reviews and ranking. Use 60–65% occupancy for year 1 projections.
Ramp-up model: Month 1–3 at 45% occupancy, Month 4–6 at 60%, Month 7–12 at 70%, Year 2+ at 75–80%.
Seasonality adjustment: multiply monthly projections by the market's seasonality index for each month.
Platform fee modeling: Airbnb charges hosts 3% + guests 14–16%. Model both the host fee impact and the guest price sensitivity.
Stress test: if your deal only works at 80% occupancy, it's too risky. It must work at 60%.