The vacation rental industry is in a period of unprecedented growth. Your vacation rental business should be, too! In 2019, the U.S. vacation rental market showed revenue of more than $17 billion! Industry experts predict that by 2023, revenue could grow to nearly $19.5 billion. Shouldn’t some of that revenue be rolling your way??
So, let’s explore what measures you can take in the Long and Short Term to improve the profitability of your Vacation Rental Business!
What can you do in the Long Term to Grow your Vacation Rental Business?
1. Create Your Marketing Plan
As with anything in life, planning must be the first phase of your business growth journey. Design a detailed plan to market your vacation rental effectively. You don’t need to be an MBA graduate to define where you want your short-term rental business to be in ten years. Specify your business goals and key milestones in terms of revenue & occupancy, etc. Note down what goals you want to achieve and how many guests you wish to host each year. Decide on the amount of money you want to make a profit and the percentage of your guests’ retention.
2. Maximize Your Occupancy Rate
Needless to say, filling in the vacant dates on your calendar must be your top priority. An empty spot translates to zero income for both the vacation rental manager and your homeowners. Multi-channel distribution is a long-proven marketing strategy to maximize a vacation rental’s occupancy, especially during mid to low seasons.
List your property on multiple platforms. With so many online booking sites out there, it can be challenging to pick the right one to advertise your rentals. Based on your niche business needs, your marketing goals, and the unique characteristics of your VR enterprise, list your properties across 4-5 leading OTAs (as well as on your Direct Booking Website) and use an effective Channel Manager.
Enter fresh markets to target more segments, like digital nomads and backpackers. On the other hand, you could focus on corporate guests. Focus on new business from different organizations by offering special rates for their employees.
Pro Tip: Ensure you use a channel manager like Hostaway to synchronize your rates and availability across multiple platforms to bear maximum results, and rest assured you are protected from double bookings.
3. Set up Your Own User-Friendly Website
A good way to grow your vacation rental business is to make your rental stand out from the competition. Cut your reliance on OTAs and maximize your profit margins by offering Direct Bookings. Drive more traffic to your website by linking it to your social media channels, optimizing it for search engines (SEO), and constantly creating quality content.
Pro Tip: Build your own guest CRM to foster recurring visitors for your rentals and create a strong brand that is tailored to your target audience.
4. Retain Your Guests
Your existing customers are 60 – 70% likely to buy from you while selling to new prospects is only 5-20% probable. What percentage of your customers visit your website only once and never book with you? How many of your guests stay at your place only one time? Will they remember your business when booking their next trip?
Your answers to these questions determine where you stand on the guest retention spectrum.
Minimize your guest acquisition costs by retention of your existing guests. Build a loyal relationship with your guests and ensure their return using marketing levers like email marketing, branding, referral, and loyalty programs. Make sure you provide a high standard of service so you can ask your guests for those 5-stars without much hesitation.
5. Expand Your Presence on Social Media
Boasting 4.2 million users worldwide, social media is a perfect marketing platform to help customers connect to your short-term rental business.
Increase your interactions on social media like Facebook, Twitter, and Instagram to strengthen your relationship with your guests. Develop your brand awareness by increasing leads and boosting your website traffic. Select the social media channels you want to focus on based on your own time and your audiences’ preferences. Do Not also forget to maintain great guest reviews because it is definitely something your potential guests will bank on.
Pro Tip: Use social media not only to get in touch with your potential customers but also to interact with other Airbnb entrepreneurs and leading businesses in your niche, for example through Facebook groups.
6. Grow Your Inventory and Add New properties to Your VR business
Once you’ve accomplished all the previous steps, it is now time to grow your portfolio. Whether you are going to buy or rent a new vacation home or start attracting new owners, don’t limit yourself to only one city or country.
Choose vacation rentals in areas with an acceptable amount of tourist traffic. Harness the power of automation and take advantage of remote vacation rental management.
The greater number of properties you manage, the greater amount of revenue you will generate. However, managing more than one vacation rental home requires lots of time and energy. Decrease the amount of manual work related to guest communications, housekeeping, maintenance, and reporting by employing a decent Property Management System. A PMS allows you to manage all your vacation rental tasks from a single hub and run your business on autopilot. As a result, you will have tons of time to focus on your ultimate goals and grow your vacation rental business.
Pro Tip: As your business grows, consider also employing a co-host.
What can you do in the Short Term to Grow your Vacation Rental?
1. Include Luxury Items in Your Vacation Listing
Research has found that vacation rentals are becoming more popular to travelers than ordinary hotels. That doesn’t mean that we, as hosts, still can’t learn a lot from the way hotels operate. A study by HomeAway (now Vrbo) and the University of Texas found that travelers are 73 percent more likely to remember their trip if they feel happy and excited about it during the planning stages before the trip ever starts. So it’s all about offering your guests a great experience.
Don’t we all love to experience a little more luxury when we’re on vacation? Spending a little more money upfront to invest in a few luxury amenities for your guests will make a huge difference. Here are a few suggestions on items you might want to consider getting for your vacation rental:
● Nespresso coffee machines
● Ninja or Vitamix blenders
● Tempurpedic mattresses
● Stainless steel range stoves, refrigerators, dishwashers, and microwaves
Having all of these products in your rental will not only increase your bookings but will give your guests the best vacation experience they can get.
Consider sending them a welcome message, and include a guide with recommendations for restaurants and things to do in the area. Nine out of 10 times, guests staying at short-term rentals want to experience life as a local.
2. Consider Marketing Your Vacation Rental to Families
Families tend to travel slower than singles or couples, staying for longer periods of time when they leave home. They are unlikely to book one night as they usually don’t want the hassle of packing all their belongings, their children – and moving from location to location.
Therefore, families are unlikely to rent your property for a single night, which means less turnover and increased income per visit for you, resulting in a steadier and more reliable flow of income.
Although some property owners may worry about the damage that children could potentially cause to their rental homes, marketing to families can be a lucrative new market segment, as the family market is one of the fastest-growing segments in the travel industry, meaning higher demand for a family-friendly Airbnb.
If you are not a parent and if you don’t have much experience with children, here are a few things to consider in terms of making your Airbnb safe and friendly for families:
Mattress protectors – it’s inevitable that some children will wet the bed. Give parents the peace of mind that they won’t have to foot the bill for a new mattress by providing protectors.
Safety guards for staircases – if you do have a staircase inside the house or outside on the property, make sure you offer parents a safe way of protecting their children from injury.
Safety latches on kitchen/bathroom cupboards – try to remove anything hazardous from low-lying cupboards but if you can’t do that, buy child-safe locks to secure the doors.
Remove unsecured objects – that large ceramic sculpture you had sitting at the top of the staircase… best to lock it up. Don’t leave anything around the house that could be easily broken or that could hurt a child if it fell on them.
Address any issues – by advertising yourself as a family-friendly Airbnb, there will be an expectation that not only your property is safe and liveable for children, but that the surrounding area is the same.
If you are renting out a granny flat at the back of a block of land where two large dogs live – it’s best you address this in your property description. Similarly, if your apartment is located in a slightly rough part of the city, you need to allow parents to decide whether it’s an appropriate area for them to walk around with their children.
3. Consider Allowing Pets in Your Vacation Rental
Pet-friendly vacation rentals are on the rise! After all, who doesn’t love to travel with their pets?
According to Booking.com, 42% of pet owners around the world would choose their accommodation based on whether or not they could bring their pets. As vacation rentals typically offer more space than a simple hotel room, it makes them far more desirable for pet owners looking for a place to stay. So why not change your rules and allow pets at your property?
While allowing pets at our property might mean more work for you, just think about all of the new bookings you will get. If you are nervous that someone is going to bring a pack of animals, set a limit on the number of pets and their weight limit, to make you feel more comfortable. Some hosts even ask for a picture of the pets before the stay, so they have an idea of what type of pet will be at their property.
4. Showcase Your Outdoor Space to Increase Bookings
An increased number of travelers now opt for health-focused vacations. A report by the Global Wellness Institute found that wellness tourism is now a booming $639-billion market. This is why you need to give your property the edge by highlighting things that will help guests relax and rejuvenate when staying at your property!
Have a pool or a hot tub in your backyard? Make sure to showcase it on all of the booking platforms you use! Create a little wellness oasis in your backyard that guests will love and never want to leave. Make sure to get some high-quality outdoor furniture that offers enough space for everyone to sit or lay by the pool.
5. Include a Welcome Book for your Guests
Ever thought about creating a Welcome Book for your guests? Your welcome book will serve as a guide for your guests during their stay. It will inform the guests of the house rules and everything that’s available to them during their stay.
Does your property have a few quirks? You’re not alone. Every property does! Let your guests know where the hard-to-find light switches are, which remote is the one that actually turns on the television, and info about that one burner on the stove that gets way too hot. And remember, while most of these things are common knowledge to you, your guests will have no idea. They can get frustrated when searching to find the answers. Make it as easy as possible for them. Your welcome book is the perfect place for descriptions, instructions, pictures, and all the rules your guests should follow during their stay. Just make sure to keep it short, fun, organized, and easy to read.
6. Invest in Smart Home Technology for your Properties
Haven’t jumped on the smart-home train yet? Well, it’s about time that you do so! Smart-home technology devices are a MUST for every vacation rental owner in 2021. Not only do they add more value to your property, but they serve as security for your property, to make managing a vacation rental business so much easier.
Smart locks are a simple way to make your guests’ life a breeze. They revolutionize how property managers and homeowners keep their guests happy. No one has to worry about losing a key again. With smart locks, all your guests have to do is look at their phones and type in the provided key. It’s that effortless!