Krakow and Cape Town sit USD 1.48 apart at the median. Above it, they are different markets.

Two cities, read the same morning

Every morning our engine opens the public Hostelworld page for a city on our prospect list and records what each listing asks for a dorm bed on one sampled night. Nothing here is modelled. On 20 October it read two cities, and they make a cleaner pair than most.

• Krakow, night of 31 October: 7 of 30 listings carried a price. Cheapest USD 18.86, median 20.39, dearest 30.81.
• Cape Town, night of 25 October: 7 of 30 listings carried a price. Cheapest USD 20.90, median 21.87, dearest 24.64.

These are public Hostelworld prices for one sampled night each, in USD per bed, read once. Two things to keep in mind before going further: the nights differ (ten days out in Krakow, five in Cape Town), and each median is the middle of seven prices, which is a small sample. We covered how far a seven-price median can wander on its own in the post on reading the same city twice.

The medians are USD 1.48 apart. The cities are not alike.

If you only watched the median you would call these the same market: 20.39 against 21.87. Now measure from the median to each end.

• Krakow: the cheapest bed is 1.53 under the median (7.5 per cent). The dearest is 10.42 over it (51.1 per cent). The whole range is 11.95.
• Cape Town: the cheapest bed is 0.97 under the median (4.4 per cent). The dearest is 2.77 over it (12.7 per cent). The whole range is 3.74.

Below the median the two cities look alike: a dollar or so separates the middle from the floor. Above it, Krakow has 3.8 times the distance Cape Town has. In Krakow the dearest priced bed costs 63 per cent more than the cheapest. In Cape Town it costs 18 per cent more. Same median, same number of priced listings, and a very different answer to the question an owner actually has: is there a price above the middle that somebody is charging, and is that somebody a house like mine?

What the spread is, and is not

The spread is not a verdict. We do not call any of these prices right or wrong, and we do not know whether the USD 30.81 bed in Krakow fills. A listing that asks 30.81 might be a private-feeling dorm with six beds, a newly renovated house, or a bed nobody has booked. The page shows an asking price, not a sale.

What the spread does tell you is how much room the channel is currently showing you. A narrow range, like Cape Town on that morning, says the seven priced houses are bunched. A wide one, like Krakow, says the page contains at least one house willing to ask half again the median for the same kind of bed. Whether that is a premium you could hold depends on what you have that the house asking it has: location, rooms, reviews, breakfast.

What a 25-bed house does with it

Take 25 beds at 60 per cent occupancy: 15 beds a night, 450 bed-nights across 30 nights. Price the distances above as though you moved there and kept your occupancy, which is the generous assumption and the one that usually fails.

• Sitting at the floor instead of the median costs 1.53 a bed in Krakow, USD 22.95 a night, USD 688.50 across 30 nights. In Cape Town it costs 0.97, USD 14.55 a night, USD 436.50 across 30.
• Sitting at the top instead of the median would add 10.42 a bed in Krakow, USD 156.30 a night, USD 4,689 across 30. In Cape Town it would add 2.77, USD 41.55 a night, USD 1,246.50 across 30.
• A 5 per cent move at the median is 1.02 a bed in Krakow and 1.09 in Cape Town: USD 15.29 and USD 16.40 a night.

Read those as a shape, not a forecast. The cost of dropping to the floor is small and nearly the same in both cities, a few hundred dollars a month. The gain from climbing to the top is large in one city and modest in the other, and it is only a gain if guests actually book at that price. A move down is cheap to try and cheap to be wrong about. A move up is where the money is and where the evidence is thinnest, because the top of the range is held by one or two listings.

Seven of thirty

Both cities had 30 listings on the page and 7 with a price for the sampled night. The other 23 showed no price for that night. The page does not say why, and we will not guess: a sold-out house and a closed one look the same from outside. What it means for you is practical. When you check competitors by hand, you are looking at roughly a quarter of the page, and the part you can see changes from morning to morning. A range built on seven houses is a sketch of the market's width, not a measurement of it.

What to do with this on a Monday

Before you move a rate off a competitor reading, write down three distances for your own city: your price to the floor, your price to the median, your price to the top. Then ask which side has room. If the range above you is two or three dollars, there is little to win by climbing and the work is in holding your occupancy. If it is ten, find out what the dearest house has that you lack before assuming it is simply expensive.

You can get those three distances for your own hostel without buying anything. Paste your Hostelworld listing at nightfill.co/#read with an email address and the same reading for your property arrives by email in about ten minutes. Nightfill is independently operated, and results depend on your property, your market and your season.

If this sounds like your property, see the three Nightfill tiers and start a free 14-day pilot on your own data: view pricing.