A Guide To Vacation Rental Management And Advertising
If you have ventured into the vacation rental world recently, most likely it is something that you are very excited about. The U.S. vacation rental market in 2019 brought in revenue of over $17.5 billion, which was an increase of almost 3% over the past year. By 2023, it is estimated that revenue might grow to almost $19.5B. Increasingly, homeowners are benefiting from vacation rentals and earning profits. On Airbnb alone, there are over 660,000 vacation home listings in the U.S.
People continue to move towards vacation rentals and away from motels and hotels. After years of uncertainty about this trend, numerous reports suggest that 2020 may be the year when hotel bookings are overtaken by vacation rental bookings. Also, we are seeing a huge change in how guests are locating vacation rentals, moving away from sites like Airbnb and HomeAway and booking with property managers directly instead. It is an excellent time to be involved.
However, this rapid growth is also a double-edged sword. An increase in vacation rentals also results in increased competition, and if you are unable to keep up with the experience, offerings, and amenities that people are looking for, then you can expect to lose your piece of the pie. That is particularly true with online travel agencies continuing to change and grow. By June 2019, both Airbnb and Marriott had released new luxury vacation rental segments of their businesses.
So what are the best ways to rent your vacation homes? The following is a list of 21 of the best ways to earn more profits in 2020 from your vacation rentals, including several effective vacation rental marketing tips, how to best advertise your vacation rental properties, how to effectively manage your revenue, and how to improve your guest experience.
The big question is – after you review all these steps, is it better for you to hire a company to handle your Airbnb, VRBO, and other short term rental websites? Or handle it yourself? You’ll know better once you review the steps outlined below.
1. Make sure your Airbnb and VRBO description is accurate and straightforward
Guests value transparency and trust. If your rental house has construction going on across the street, don’t gloss over it. You will pay the price later after a guest leaves a negative review about not being informed or that you were deceitful in any way.
Find a good way to communicate those aspects of your rental that are less desirable in an informative yet not off-putting way. The following are a couple of examples of how you can do this:
“This part of Florida is growing rapidly, and there could be construction going on nearby during your stay.”
“If you are unfamiliar with snow in Lake Tahoe, it comes down fast and hard. We do our best to ensure that your driveway is kept plowed during storms. However, it is not uncommon to have several inches of snow per hour, and at times this might be hard to manage.”
“Starting on April 1, our community pool will be closed so that we can make improvements and provide you with a poolside experience that is even better. On May 1, celebrate our pool’s reopening with us.”
If you have a well-optimized listing, then a considerate disclaimer will not detract from your overall description.
2. Update your description as needed to keep it current
Don’t think you can just put up your rental listing and then forget about it. It should be copy that is updated on a regular basis. Make sure you review your listing when:
You make improvements to your rental home, like adding new amenities or conduct renovations
When a highly anticipated new museum, bar or restaurant opens close by
Whenever the season changes. During the summer you want to use words like sunshine and breeze, while during the winter, you want to use words like cozy and warm. It is especially important in ski resort destinations like Vail or Mammoth Lakes where it is critical to know how to market effectively to shoulder-season guests.
3. Understand how the various listing sites work.
VRBO or Airbnb? Which of these – if either of them – is the best site to list your vacation rentals? At an overall level, the fee structure is the major difference between the two major players.
With VRBO, you are able to either choose an 8 percent per-booking fee or pay a yearly annual subscription fee for listing your rentals. The best way to determine which one is best is by estimating the number of bookings that you will get. VRBO recommends a yearly subscription for property owners who are expecting to rent their house for over six weeks per year. With Airbnb, property owners pay a percentage of each booking in exchange for hosting their rental properties on the website.
4. Great photos are key. Learn how to do them properly.
The high influx of vacation rental properties on sites such as Airbnb and VRBO have created an environment where only properties with professional photography – not just taking photos with a smartphone – will truly stand out. It goes beyond photography equipment. You also must develop a good eye for producing enticing, brilliant photos. Your photos need to be optimized for a rental listing.
The following are some effective ways to achieve this:
- Learn how to use composite lighting methods. It is an excellent way to show off the beautiful interior of a room and the incredible view outside the windows, in one photo. No overexposed natural light or washed out colors.
- Consider how to best assemble your photos. There needs to be a good flow to help prospective guests understand how the rooms connect with one another.
- Consider adding a detailed floor plan as one of your photos.
- Use as many photos as possible to maximize the visibility of your listing. It has been shown in studies that guests are up to 80 percent more likely to seek out more information on a property that has over 20 photos.
5. Make Your Guest Experience a Memorable One
Find unique ways that will help ensure your guests have a memorable trip. That will help to ensure that your vacation rental is unforgettable as well. When guests have a great experience it will lead to great reviews, predictable income, and repeat bookings. However, that is much easier said than done. When you are selecting a vacation rental manager for your property, some of the most important questions you need answers for are regarding the guest experience.
It was found in a study conducted by the University of Texas and HomeAway that travelers have a 73 percent higher chance of remembering their trip when they feel excited and happy about it before their vacation ever begins. Employing the above listing tips will help to achieve this, but there are other things that you can do as well. Making sure the guest experience is memorable means staying in contact with your guests starting with the booking and all the way through checkout. Printing out clear rental instructions, leaving small welcome gifts and providing local recommendations can all help to make your guest experience as relaxed and positive as possible.
6. Keep your calendars updated
Your guest experience begins well before any visitors arrive at your property. For guests to discover that the dates they desire are not available, that is not just inconvenient but can penalize your rankings as well.
On some listing websites, declining a guest stay when your rental property is marked as available on your calendar, will cause your rankings to take a hit, and as a result, your booking rates as well.
VRBO thoroughly checks how you are managing your calendar to ensure it is always kept up to date.
7. Upgrade your outdoor living areas
For many years, the world of real estate has been aware of how critical it is to seamlessly integrate outdoor and indoor living, and this is even more important for vacation rental properties. It was found in a TripAdvisor study that 82 percent of their respondents said that the most important feature when determining which property to book was an amazing view. Also, 46 percent stated that the most important was a private pool, 33 percent said an outdoor grill was what they were looking for, and 32 percent mentioned a hot tub.
So what does all of this mean for your vacation house? Make sure you pay attention to your outdoor living areas. Great patios, hot tubs, decks with chairs and tables, and fire pits are all worthwhile investments that will bring increased high-dollar bookings to you.
8. Keep your outdoor living areas well-maintained
Buying and installing a hot tub is one thing. However, keeping it well-maintained is a different thing entirely. It is critical for your outdoor living spaces to be regularly maintained in order for your rental to be successful over the long term. Performing regular maintenance will mean that you will need to spend less on new amenities over the long run, and you will also significantly reduce the chances of having to do emergency repairs while you have guests staying at your rental property.
The following are a few important things to consider:
- When your outdoor deck furniture is not in use, clean and store it. That will significantly extend its luxury appeal and lifespan.
- Rake on a regular basis and remove branches, twigs, leaves, and debris from your patios and decks. Guests don’t want to stay in a dilapidated looking house.
- Keep the windows clean. Streaks and smudges are a dead giveaway that your house has not been prepared properly for guests.
9. Don’t ignore interior design
When you are staging your vacation rental house for guests, think about what they will be seeing on your listing. A window could have an incredible view, however, if it doesn’t have any surrounding accents, then it might fall flat. Take this same window and place an elegant chaise lounge directly in front of it with an interesting lamp on an attractive side table, and a bookcase in the corner. With just a few simple additions, you can greatly increase the comfort and interest of the room.
Good interior design means striking a balance. Guests do not want rooms to be stale and empty. However, having too many personal touches can be off-putting as well. Traditional decor, local area, and posters of interesting regional attractions are all good choices.
10. Update the kitchen
It was found in a TripAdvisor survey that 83 percent of the respondents stated that their biggest cost-savings came from being able to cook in their vacation house. In last year’s Cost vs. Value Report from Remodeling Magazine, it was found that even minor kitchen upgrades provided an 80 percent ROI when selling the house.
Therefore, remodeling the kitchen increases your home’s listing appeal through offering an improved aesthetic, helps guests keep their expenses down while staying in your vacation rental, and increases your vacation home’s long-term value. That is why a kitchen upgrade definitely should be on your priority list.
11. Provide guests with a detailed manual
Hot tubs, kitchen appliances, sound systems, and TVs, can potentially really confuse guests when they are not familiar with a certain amenity. It is important to create a binder or book that details all of the functions in your vacation rental house.
Here are a few examples:
- How to use kitchen appliances such as high-end blenders or espresso machines
- Which remote controls work with which visual/audio functions
- How to use gates, electronic locks, and entry systems
- Instructions for programming the thermostat and setting suggestions
Your manual should also have information on local history and attractions, recommendations, departure instructions, and a warm welcome.
12. Invest in luxury items
Spending money ahead of time on luxury items can provide you with numerous future benefits. The following are some luxury items to consider including in your vacation rental house:
- Local stone, marble, or granite counters in the bathroom and kitchen
- Stainless steel microwaves, dishwashers, refrigerators, and stoves
- Tempurpedic mattresses
- Electronic entry
- Nest connectivity and climate control systems
- Vitamix or Ninja blenders
- Nespresso coffee machines
- USB Power Outlets
13. Encourage and respond to customer reviews
Reviews can definitely make or break your rental house. When you focus your efforts on your guest experience, then you will encourage positive feedback that will lead to higher occupancy rates and more bookings.
However, this does take effort. You will need to check and also respond to your vacation rental house’s reviews on a regular basis – both bad and good. When you respond to negative reviews it gives you the chance to address the problem and improve it for the future, and responding to positive reviews demonstrates your engagement and commitment to the guest experience. Just thanking your guests for their business and for leaving a review can go a long way.
14. Identify your goals and develop a financial plan
Step back and ensure that you thoroughly understand what your ultimate goal is when it comes to renting your vacation house. It will affect all of the revenue-decisions that you need to make about your vacation rental property.
15. When determining your nightly rate, focus on the things that add value
You might be tempted to find the cheapest house in your neighborhood and then undercut the price. However, keep in mind there could be a good reason why that house is the cheapest.
Instead of choosing not to make any luxury investments and reducing your nightly rate, a better way to approach pricing is to understand what value can be added to your vacation rental house that will justify a higher nightly rate.
16. Dynamic pricing instead of static rates
You should never have a static rate for your vacation rental. There are numerous factors that will affect the demand for your vacation rental house. You need to identify what they are and then act accordingly. Here are a few things to consider:
- Demand trends and macro supply within the vacation rental industry
- Length of stay
- The average price in your local area
- Specific events
- Seasonal demand
17. Plan for peak times in your area
A major part of being able to maximize revenue on your vacation rental is planning when you will be using the house for personal purposes and when you will be renting it out to guests. Identify what the peak demand times are for your area, and then decide which of these times you will make your house available to guests.
Keep in mind that a couple of weeks during the peak demand times can really add up to a high percentage of your yearly revenue. As an example, if you are planning to stay in your mountain house over Christmas and New Year’s holidays, that means you will be missing out on one of the peak times in the entire year. However, you may be able to make up for this by marketing your house as the ideal place to stay in for the spring skiing season.
18. Study the rates of houses that have unique selling points
Failing to do the necessary research could cost you money. If your vacation rental house has a very desirable offering – like a private walkway to a Florida beach or has a ski-out, ski-in access in Mammoth Lakes, then you should reflect this in your pricing.
However, there also could be aspects of your house that you are attractive to many guests that you are not even aware of. For example, in Lake Tahoe, we have discovered that Donner neighborhood guests are just as excited about the lush forest setting and family-friendly attractions as they are about the actual lake. It is important to identify the less obvious but valuable unique selling points.
19. Reassess on a weekly basis and continue to collect information
Set aside time each week to study the performance of your vacation rental house. Are you behind or ahead of your weekly bookings year-over-year? How are your prices and bookings compared to the same time last year? If you do not have that information, you can compare week-over-week or month-over-month instead. Use anything that can help you get your benchmarks established so that you can compare them moving forward into the future.
Make notes on where your guests come from, seasonal demands, and all other relevant data points to help you gauge what has caused your profitability and bookings to remain stagnant, or go up or down. Over time, having that information will make a huge difference in the way you price your vacation rental house.
20. Invest in premium TV, Internet, and other luxuries
Having standard cable is good enough. Although having a diverse selection of TV channels like HBO, Starz, Showtime, Hulu, and other premium channels is always a crowd pleaser. You can ditch standard cable and get an Amazon Firestick or Roku (preferably the $89 roku as it eliminates the need for multiple remotes) this also eliminates the need for a DVD or Blueray player as most movies are online and can be streamed now. Having fast internet is always a plus as some renters like to work and use social media while staying at your place, so unless you live off the grid, don’t hold back on premium channels and fast internet.
21. Reinvest in your Property!
Bathroom and kitchen upgrades, new furniture, an outdoor fire table, or a hot tub can help make your vacation home more enjoyable but also increase your rates and help you remain competitive within your local area. Or your profits can be put back into your marketing efforts. New professional photos (particularly if you have made any upgrades recently can really help to get you noticed on Homeway as well as other OTAs.