How to Maximize Vacation Rental Income: 8 Tips for Property Managers
In an industry that's constantly growing, most property managers are wondering how to maximize vacation rental income. Not only are they receiving significant pressure from owners, but there's also an abundance of information online that doesn't always apply to those overseeing more than 50 properties.
This article will break down eight ways that property managers can increase revenue. From communication strategies to automated messaging systems, you'll find a variety of tips and tricks that can help build up the potential of your vacation rental business without adding too much to your workload.
RueBaRue is an easy-to-use guest communication tool that lets property managers drive more revenue by cutting down on guest communication costsand offering extended guest stays. Book a demo personalized to your rentals to see the platform in action.
8 ways to increase vacation rental revenue and keep owners happy
Even the smallest improvements can make a massive impact on vacation rental income. Let's take a look at a few methods that you can get started on today.
Use dynamic pricing to optimize your rental rates
As the number of vacation rentals around the world multiplies, so does the need for competitive rates. Thanks to tools like dynamic pricing, property management companies can turn to an algorithm that adjusts prices based on the supply and demand at any given moment. Not only does this take into account peak seasons and historical trends, but it also monitors daily fluctuations in the market.
Using dynamic pricing allows you to save money on manual tasks and attract more guests all at once. If there's a particular week in which demand is high but there's very little supply, the algorithm will increase your prices accordingly. On the other hand, if there's a period of time where things are going slower than usual, dynamic pricing will drop your rates in order to occupy the rental property. If you were to manually set these nightly rates without the real-time market data that dynamic pricing software uses, you'd miss out on a significant amount of revenue.
Despite being a fruitful option for many vacation rental homes, property managers often discard the idea of an application controlling their rates simply because they don't know enough about it. However, there are plenty of dynamic pricing tools available that actually give you more flexibility and power. With customization options, you can adjust settings like minimum and maximum rates, the length of stay, and discounts. Some of the most popular vacation rental dynamic pricing tools are:
- Beyond Pricing
When setting the base rate for properties, it's important to properly research the vacation rental market. Establishing who your competitors are is an essential part of pricing. By analyzing the amenities that each property has and only competing with those that provide the same ones as you, you can position your business much more accurately. To get an overview of the market, you can use features in the previously mentioned dynamic pricing platforms or you can turn to websites that specialize in vacation rental data like AirDNA.
Credit: Pixabay / Pexels
Amenities such as a pool can increase your pricing from similar properties.
Step up your guest communication to get better reviews (and more bookings!)
The guest experience starts long before a client even steps foot in a vacation rental property. With communication platforms like RueRaRue, you can take advantage of the following features and drive in more revenue:
- Digital guestbooks. Create a custom vacation rental welcome book to guide visitors through every step of their trip. Start off by using the Master Guide template to get the hang of things and then add new categories depending on the information you'd like to share. Digital guestbooks can be sent automatically via SMS or email and usually include arrival and departure details, check-in instructions, vacation rental house rules , and safety information.
- Local area guides. As someone involved in vacation rental management, your influence on a person's holiday goes beyond just accommodation. By preparing a local area guide with the best restaurants, essential stores, and activities around, you'll make a memorable first impression and increase vacation rental reviews .
- SMS and email automation. RueBaRue allows property managers to reduce operational costs with automation. Instead of writing out the same answers or reminders on a daily basis, you can make use of vacation rental email templates and tackle questions before they even arise. This feature is also useful for scheduling guestbooks and local area guides.
- Guest surveys. RueBaRue's guest surveys are an effective way of gathering constructive criticism and finding out what changes need to be made in a vacation rental business. These simple surveys can be sent to renters automatically and all they have to do is rate their stay from 1-5 stars. If they answer with 5 stars, they'll be asked to leave a public review on platforms like Google and Facebook. If they give 4 stars or less, they'll be directed to a more in-depth questionnaire to help property managers understand their reasoning.
Automate these tasks and the outstanding customer service you deliver is bound to impress both guests and property owners.
Preview of RueBaRue's Five Star Review survey scheduler.
Offer extended guest stays to boost your occupancy rates
RueBaRue also provides tools for extended guest stays to increase vacation rental occupancy and maximize income. With this feature, property managers can fill in gaps between bookings and save money by reducing turnover.
To set it up, all you need to do is follow these steps:
- Sign up or log in to your RueBaRue account
- Click on Extend Stays at the top of the page
- Filter the calendar by gap length, early check-in or late check-out, or departure date
- Select guests by clicking on the blue lines
- Once you've selected a guest, click on the Extend Stay option
- Choose between SMS and Email
- Select a template and edit the message
- Click on either Send Now or Schedule For
- Hit Send and you're done!
Preview of RueBaRue's extended stay feature.
Accept mid-term bookings to maximize occupancy
Many property managers tend to focus solely on short-term vacation rental reservations without realizing that they're losing money because of it. Incorporating mid-term bookings into your strategy will allow you to target a variety of new guests such as:
- Remote workers and digital nomads
- People looking for a change of scenery after a year of quarantine
- Families or individuals that are in-between places and need a transitional home
- Travelers testing out a city before permanently moving there
- Young adults doing internships
- Professionals with temporary work placements
The list goes on! By expanding your horizons and considering audiences that you might have missed until now, you'll start to drive in more bookings while saving money on maintenance and cleaning fees between reservations.
Credit: Andres Ayrton / Pexels
Remote workers are a great audience to target as a vacation rental property manager.
Increase direct bookings to cut down on OTA commissions
While online travel agencies like Airbnb, Booking.com, Vrbo, and HomeAway are a logical starting point for property managers looking to promote a rental, they shouldn't be considered a long-term solution. Instead, you should work towards direct bookings and avoid fees on vacation rental platforms.
Because RueBaRue facilitates guest communication and allows you to establish a meaningful relationship with clients, you're more likely to elevate loyalty and receive repeated direct bookings.
Update your rentals to respond to new traveler needs
It goes without saying that the pandemic has modified several processes in the vacation rental industry in a very short period of time. Although contactless check-in existed before the COVID-19 outbreak, it has absolutely skyrocketed over the past few months. By tuning in to recent traveler needs, you're increasing your chances of getting booked.
You can even go above and beyond and provide COVID-19 travel information in the form of automated SMS alerts through RueBaRue. Not only will this make guests feel safe but they'll also appreciate the extra effort that has gone into their well-being.
Preview of RueBaRue's emergency alert feature.
Look for upselling opportunities
Upselling is known for maximizing vacation rental income and yet very few property managers apply it to their business. This sales technique is essentially a way for property managers to generate more income by selling premium services or upgrades. These opportunities include:
- Airport transportation. Instead of trying to decode the bus system in a new city after hours of sitting on a plane, many travelers will gladly pay extra for airport transportation.
- Welcome baskets. Who doesn't love a basket filled with chocolates and wine? Themed welcome baskets allow guests to start off their holiday on a good note. Also see 10 unique welcome basket ideas for your vacation rental.
- Luggage storage before and after the stay. There's nothing worse than dragging around a heavy suitcase after a week of vacation. Luggage storage might not be the most exciting service but you'll be surprised with how many guests prioritize comfort.
- Tours and activities around the area. If your town is located near a famous hiking route, you can get in touch with local guides that provides tours.
- Grocery delivery. Buying groceries always seems like a chore when you're on vacation, especially if you don't have a car. Offering a grocery delivery service is an enticing option for big groups - you can even set up a deal with a local chef and plan an unforgettable evening for your visitors!
- Extra housekeeping. While many short-term rentals include weekly housekeeping, guests with kids might need some more help tidying up and switching out linens.
- Laundry services. Especially for longer reservations, a laundry service can be a real lifesaver.
- Renting out sports equipment. If a property is located near the beach, you can easily rent out equipment like snorkels and paddleboards.
Get creative and start brainstorming what upgrades and services you could offer to guests in your area. Aside from getting some extra income, you'll also support the local economy and build connections with hardworking people.
Credit: Kindel Media / Pexels
Renting out sports equipment not only enhances a guest's stay but also drives in extra income.
Use the right marketing strategy
Marketing a vacation rental doesn't just stop at listing site descriptions and high-quality photographs. In this day and age, anyone involved with real estate needs to be comfortable with a variety of concepts and tools like social media platforms, SEO, and target audiences. If you don't meet these criteria, it's very likely that you're overlooking potential income.
Whether you're hiring a specialist or doing the work yourself, a clear marketing plan is a must. To get started, define your goals (such as improving brand awareness or increasing traffic to your website by 30%), choose what platforms you'll be using depending on your target audience, and establish a visual identity.
When it comes to SEO, it's all about ranking higher on search engines like Google to increase direct bookings. This concept might sound alien to some, but by choosing the right keywords for your vacation rental website or blog, you'll drastically improve the chances of being spotted by potential guests. Understanding keyword research and link building right away is no easy feat, so learn more with resources like Magnetic Strategy's complete SEO guide .
Now that you know how to maximize vacation rental income and keep homeowners happy, you can start applying these tips to your business. Instead of diving into all eight suggestions at once, pick out a few and perfect them.
Whether that means automating your guest communication or switching to dynamic pricing, these improvements will lead to more bookings, positive reviews, and of course, income.
RueBaRue is an easy-to-use guest communication tool that lets property managers drive more revenue by cutting down on guest communication costs and offering extended guest stays. Book a demo personalized to your rentals to see the platform in action.
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