Lost revenue and lost profit in STR disputes: key assumptions
Key assumptions for lost revenue and lost profit analysis in short-term rental disputes — seasonality, channel mix, variable costs, and defensible quantum.
Lost revenue and lost profit in short-term rental disputes are not the same as long-term rent loss. STR income depends on pricing, occupancy, seasonality, channel mix (Airbnb, Booking.com, Vrbo, direct), and operational execution. Expert quantum work must state assumptions clearly so tribunals and parties can test them.
A defensible STR quantum analysis typically separates gross booking revenue, platform fees, cleaning and turnover costs, utilities, management fees, and margin. Lost profit requires a reasoned view of variable versus fixed costs during the loss period.
Common pitfalls include using annual averages without seasonality adjustment, ignoring ramp-back after downtime, and relying on unsubstantiated projections. Comparable listing evidence and calendar data often support or challenge claimed losses.
For solicitors and insurers instructing experts, early clarity on the loss period, mitigation steps taken, and available channel and financial records helps scope the analysis efficiently.