Why Most Managers Optimize to Average

The Average Trap

Your manager sends you a monthly report. “Your ADR of $225 is in line with market averages for your area.” “Occupancy of 62% matches the market.” “Performance is tracking with comparables.” These sound like reassuring statements. They’re not. They’re admissions that your property is performing at the median — the 50th percentile — of all listings in your market.

The 50th percentile includes every poorly managed, underpriced, badly photographed, stale-listed property in your area. Performing “at the market average” means performing alongside properties with smartphone photos, flat-rate pricing, 4.5-star reviews, and managers who haven’t touched the listing since launch. That’s the company your property is keeping.

Why Managers Default to Average

Benchmarking against the average is comfortable. It’s easy to achieve. It’s easy to defend in a conversation. “We’re performing at market levels” sounds competent even though it means “we’re not outperforming anything.”

Optimizing to the top 10% requires more work. It requires continuous testing, weekly pricing reviews, gap night management, operational quality systems, and the willingness to set a higher standard and be held to it. Most managers don’t want to be held to the top-10% standard because they know they can’t consistently meet it.

The result: they frame average as acceptable, charge an above-average fee for producing it, and hope you don’t know enough to ask “but what’s the top 10% doing?”

The Revenue Gap

The gap between 50th percentile and 90th percentile performance in Michigan vacation rental markets is significant. In Traverse City, that gap is $20,000-40,000 per year on a single property. In smaller markets, it’s $8,000-20,000. These aren’t theoretical numbers — they represent the difference between a property managed to average and one managed to excellence, in the same market, with similar characteristics.

That gap exists because the top 10% have: professionally tested hero images, optimized titles, tight pricing architecture, minimal gap nights, 4.9+ review scores, and a management team that reviews every metric weekly. The bottom 50% have static listings, autopilot pricing, loose operations, and monthly (at best) attention.

How to Know Where You Stand

Ask your manager for your RevPAR benchmarked against the top 10% of comparables — not the average. If they can’t provide this comparison, they’re not tracking it. If they can and your RevPAR is below the 75th percentile, your property is underperforming relative to what’s achievable with your property’s characteristics and location.

The benchmark isn’t aspirational. The top 10% properties in your market exist today, earning today, with the same weather, the same regulations, and the same guest demand. They’re not better properties (necessarily). They’re better managed properties. That’s the variable you control.

Our Standard

Every property in our portfolio is benchmarked against the top 10% of comparables in its micro-market. Not the average. The top 10%. That’s the target. Not all properties reach it immediately — the optimization timeline is 8-12 months. But the standard is clear, the benchmark is specific, and the gap between current performance and target performance drives every optimization decision we make.

We’d rather be held to a high standard and occasionally fall short than set a low standard and consistently meet it. The first approach produces 1.7X results. The second produces market averages and a monthly invoice.