Perhaps, like many other people in the short-term rental business, you have bought or leased a vacation home to rent out, hoping to earn a good side income. Even though your calendars are filled up and have left no nights vacant, you’re not making much. After paying the general expenses, upkeep and repair fees, utility bills, staff payments, and taxes, it barely pays its mortgage when you get down to real numbers. You might find your vacation rental income not rewarding enough and get frustrated. Or you are wondering what is going wrong, and how you can boost your vacation rental income.
Hang tight; we will teach you some cost-cutting hacks and some income-maximising tricks.
Short-term rental is a lucrative and profitable business provided that you learn the trade backwards and stick to a clever business plan.
Having a fully booked calendar during the high season doesn’t translate to a higher net profit. You must spend a bit more time and effort to learn how to deal with your vacation rental revenue. Optimise your current income streams and inspect the spots that your money is leaking out to see incredible uplifts in your profit margins.
1. Optimise Your Rates
Price reigns over today’s increasingly competitive hospitality world. Today, vacationers have access to a wide range of accommodation they seek and can compare the prices of different options without the slightest hassle. As a result, only the vacation rentals that ride on the wave of price achieve considerable success.
Dynamic pricing is the best price optimisation method and the ultimate response to today’s volatile market’s dynamic demand.
Dynamic pricing is a data-driven method for pricing to figure out the most flexible and customised rates for each night differently for a short-term rental.
This pricing method can maximise your profits and occupancy rates, as well as your competitiveness in the market.
We have discussed dynamic pricing in detail in our blog post Ins and Outs of Vacation Rental Price Optimisation.
2. Improve Your Listings
It is not just enough to list your property on OTAs. How well you list your property is what matters most and can increase your bookings.
Use as many high-resolution photos as you can to best present your property and its amenities as they really are.
Spend enough time to write a detailed and exciting but accurate and honest description of your home and carefully list all of your amenities.
Provide your viewers with enough reasons why they should choose your rental home over your competitors.
Try to figure out OTA’s algorithms and ranking systems and optimise your listing accordingly. Frequently check your OTA listings and update them.
3. Distribute on Multiple Channels
One of the other measures that can significantly impact your rental’s occupancy rate is listing your property on multiple channels and booking platforms to give it a higher chance to get seen and fully booked. This can pretty much reduce your vacancy rate, which equates to zero income.
This is very straightforward. All you need to do is to dedicate enough time and patience to list your property on as many OTAs as you can and hire a channel manager to update your calendar and prevent double-bookings.
4. Keep Your Rental Booked During the Low Season
Depending on your property’s area and your rental’s type, there must be a high season in which your location and vacation home are highly in demand and some months in the year when the business is quieter.
Just keeping your property fully rented during the busy season cannot take full advantage of your property’s potentials. You must also count on low seasons to generate more income.
Some smart off-season offers like promotions and vouchers can most probably attract travellers to your rental. You can also create some innovative packages appealing to tourists from all around the world.
Be more flexible during quieter times by offering lower minimum stays, a more pliable cancellation policy and, of course, more moderate rates.
Encourage longer stays in quieter months. Longer stay rentals will provide you with more predictable and reliable but lower income during quieter months. Set attractive weekly or monthly discounts for guests who seek longer accommodations and travellers with work or study purposes like college and university students and people working remotely.
Partnering with local events, activities and businesses like cafes, bars and restaurants to offer your guests something worth doing or visiting during the low seasons can drive more low-season bookings.
5. Upsell More Add-ons and Extra Services
Upselling additional services is a good way of improving the bottom line. Add up to your revenue streams by offering your guests what they need but is not listed in your offerings.
Providing your guests with additional services from early check-ins and late check-outs to local tours will not only raise your returns but also benefit your guests and generate glowing ratings.
6. Take Routine Maintenance Seriously
General upkeep and hefty repair fees usually swipe up a significant part of your income. Preventative maintenance is what can save the vacation rental managers from future headaches and excessive repair fees. If you frequently inspect your property and stay on top of minor repairs, you can save reasonable amounts of money and time.
Schedule seasonal maintenance and make your home ready for significant weather changes in your area to save it from any possible damages and breakages.
Treat inspection as one of your housekeeping staff’s top priority tasks and provide them with a home maintenance checklist to be able to spot minor problems right away before they turn into real troubles.
Always tick the security deposit box in the list of your requisites from your guests to safeguard your property from costly damages and set a reminder for your guests to treat your investment with care.
7. Set Clear Rules
As you rent out your vacation rental to people you don’t know well, intentional and unintentional damages and breakages are probable. It is wise to lay a set of specific house rules to clearly tell your guests what you expect from them and how they should treat your property.
This is the easiest but cleverest preventative measure to save your short-term rental business from future headaches and extravagant repair costs.
To find out more about what items you must include in your house rules, read our blog post, The Most Significant House Rules for Vacation Rentals.
8. Offer a Unique Guest Experience
Keep upgrading your amenities and improving your service to provide your guests with a remarkable stay.
Do your best to stand out from the competition by wowing your guests.
Find out about the amenities your guests might require and offer them what they want.
Prepare beautiful and comfortable beds, decorate professionally, provide a well-equipped kitchen for the guests to prepare their meals, provide a super-fast internet connection and a quiet working space for your business travellers, offer welcome packages and do whatever to impress your guests.
Be more flexible by offering less strict cancellation rules and making your vacation rental more pet-friendly and suitable for families with children.
Of course, offering a higher guest experience level requires extra amounts of time and money, and you might ask yourself if this can ever help increase your revenue.
Never forget, people are willing to pay more in exchange for receiving exceptional experience. Therefore, you can charge extra fees and earn more, offer more value and attract more bookings.
Collect more positive reviews. Your potential guests need to see those yellow stars before they trust and book your place. Gain stellar reviews on online booking platforms to boost your online rankings.
9. Make Your Guests Return
Acquiring new guests is always more expensive than retaining your past guests because it is much easier to make the guests who have the experience of staying at your rental return rather than convincing brand new vacationers to come and give your rental a go. To achieve this goal, you must take two simple steps:
First: Ensure your guests have a stellar experience of staying with you and are likely to choose you over your competitors in the future.
Second: Reach out to your past guests with enchanting offers that they can’t deny to drive some repeat business. Never overlook the power of “Word of Mouth” and run creative referral programs to make your guests bring you more bookings.
Launch loyalty programs to appreciate your repeat guests and give them a sense of community. Offer them vouchers and promotions or gifts like a free meal at one of the best local restaurants.
10. Follow the Local Tax Rules
Taxes are an imperative cost in every business, which property managers must handle with extra care to avoid expensive bills.
Knowing the tax rules inside out can help you keep your rental taxes minimum or even eliminate them entirely by deducting some specific expenses.
Tax rules vary in different parts of the world and might change over time. So check your local tax rules frequently to keep yourself updated with the latest regulations and avoid tax complications.
11. Make Your Appliances More Efficient
Replace your worn-out home appliances and upgrade them to newer models to save up great deals of energy.
This might seem like a heavy burden on you in the beginning, yet the outcome will pay off in increasing your vacation rental income. It will also help keep your customers more pleased with your home.
12. Invest More on Your Direct Booking Website
A significant percentage of your income is leaking through OTA commissions for the bookings coming from these websites.
However, establishing your own direct booking website equipped with a well-functioning booking engine can drive you hundred-per cent profitable bookings and maximise your vacation rental income up to a great degree.
For this step, you first need to improve your vacation rental direct booking website’s SEO (Search Engine Optimisation) score. Make sure it operates fast enough and is bookable with a robust direct booking engine.
Gain more exposure for your direct booking website, promote industry’s latest marketing tips for your brand by running your own marketing campaigns, and highlight your social media presence.
You don’t necessarily need to be a marketing expert to make a marketing plan for your rental business. Just immerse yourself in the vacation rental management content and search the web for the latest marketing tips in the industry.
Focus on building your potent guest CRM and use it for your email marketing efforts. Offer packages and discounts to your potential guests and encourage them to book directly.
Moreover, learn how to take advantage of Facebook and Google Hotel Ads, two unrivalled advertising platforms to irradiate your business.
Bear in mind:
There’s always a better way to do things.
There’s always some space for betterment.
Boosting income needs improving all sides of your vacation rental business continuously. It is not a one-time attempt.
Don’t limit yourself to the tips mentioned here. These are the routes we know. You know your business better than we do and can find better ways to do what you do.
Communicate with fellow members in the market and exchange experiences, ideas and innovations.
Make improvements and give them time to make their impact. Focus on what you are doing rather than waiting for instantaneous results. Enjoy the process. You will reap the benefits.
You don’t have to carry out all the tasks on your own to earn an extra bit of income. Find a way to strike a balance between the do-it-yourself and hiring professionals. You can ask an experienced vacation rental management company to do the heavy lifting for you.