The recent pandemic has demonstrated the importance of drawing up an action plan to keep your business afloat. Successful vacation rental property owners understand that this is the best time to review their vacation rental strategy.
Here at iGMS, we believe in helping hosts learn from the experience of others. That’s why we have conducted this survey, asking hosts to share their strategies for coping with a crisis.
We invited a variety of property managers to take part in this survey. We discussed financial issues and their views on how they intend to keep their business afloat. The results are in, so let’s find out what vacation rental business owners had to say.
First off, we asked if revenue had decreased in light of the pandemic. It’s unsurprising to learn that the majority of those surveyed reported a staggering 80-100% drop in revenue. Travel restrictions have prevented people from taking holidays and business trips, resulting in a huge decrease in bookings.
In areas where restrictions are less full-on, vacation property owners have been busy trying to draw attention to their business. Many have testified to altering their nightly rates in a bid to sustain occupancy rates.
Our survey indicates that 22.9% of hosts have reduced their nightly rate by a sizable 60% or more. Others dropped their prices by a smaller amount or utilized special offers and discounts to attract guests. A fortunate 11.4% stated their revenue had not dropped at all—this could be due to bookings from long-term guests.
We also asked hosts to talk us through the cost-cutting tactics they were considering to keep their business afloat. A high proportion of hosts (74.3%) were planning to slash operational costs.
We also found that 48.6% were thinking about cutting back on costs related to staff and salaries. Interestingly, significantly fewer hosts (28.6%) were considering reducing their use of automation tools to save money.
For many, positivity seems to be key in devising a vacation rental strategy that will get them through the current crisis.
Over half of those surveyed, intend to try and secure mid- to long-term rentals. A similar number are keen to cut back on costs. Other popular ideas included reducing nightly rates, targeting domestic travelers, and introducing new marketing strategies.
Hosts are keen to employ a vacation rental strategy that includes automation to maximize profits, boost productivity, and secure bookings.
Our survey shows that vacation rental managers understand the value of utilizing automation—51.5% of hosts are planning to use PMS/Vacation rental software during the pandemic. Other popular tools that hosts believe might come in handy include cleaning management software, pricing automation, and market analytics tools.
If you are an investor, this could be the perfect time to think about your future strategy. Buying vacation rental property can be a profitable business, providing you do your homework! Already own short-term vacation rental properties?
Then you will need to adapt your vacation rental strategy to account for the slump in tourism. We’ve digested the survey results and based on what we have found, we can suggest the following strategies:
This is the right time to take stock of your outgoings and work out where you can cut back. Can you reduce your operating and recurring costs? For example, you can consider buying your supplies in bulk and shop around to find good deals.
You can incorporate technology to make long-term savings as well—smart lights, smart thermostats, automation software are all ideas worth exploring.
Take some time to review your finances, too, and get to grips with your vacation rental property tax strategy. You can always get some expert help with this if it seems too tricky.
Your vacation rental strategy should also pinpoint your target audience, and the recent travel restrictions may have altered this. International travelers are less able to book trips at the moment, but you can turn your attention to domestic travelers.
Domestic travelers may be looking for respite in the form of a short break. Staycations are often popular as they are considered less expensive and less hassle, especially for guests traveling with pets and children. It’s also worth targeting those who are looking for a comfortable base to work from.
You should also review your minimum stay policy and adjust it to be in line with your vacation rental strategy. Domestic travelers may be looking to stay elsewhere for a short period for work purposes. They might also want to book a welcome weekend break. You could also consider attracting mid- and long-term renters by offering favorable rates.
It’s also worth adopting a well-thought-out vacation rental pricing strategy by adjusting your price point to meet the demand. In the current climate, many will be paring back indulgent spending on luxuries, such as holidays.
It’s likely that international travelers will not be looking to book overseas properties for the foreseeable future.
And although domestic travelers may be more open to traveling in the locality, they will be looking to spend less. Adjusting your pricing can help ensure you do not end up with too many gaps in your booking diary.
Potential guests aren’t going to come knocking on your door—you have to attract their attention. Devise a comprehensive marketing strategy; this could include email marketing, e.g. getting in touch with previous guests to showcase a special offer. Social media can also work wonders in boosting your online presence.
You could also work with local businesses to market your vacation rental. For instance, you can offer packages such as a dine and stay break. This could include a discounted meal at a local restaurant and a night away in one of your vacation rentals.
Use this time to give your listings a makeover too. Start by thinking about your target audience, i.e., who your vacation rental will appeal to.
You can change the title of your listing to attract attention, e.g. “Perfect Pad for a Staycation” or “Fast Wi-Fi and Stunning Views” or “The Perfect Work From Home Retreat.” Professional photographs can really make your property listings look special too.
It’s also worth exploring how well your property performs on a listing site. Is your rental featured highly in the search results? Get to grips with how a search engine works and use keywords to draw in interested guests. Adopting clever SEO methods can really work to your advantage.
Offering an instant booking option could attract more guests. Adding this will ensure your property gains more exposure. Moreover, you can consider adding a flexible cancellation policy.
In the current climate of uncertainty, guests are looking for more peace of mind when booking. Cancellations can be a real pain for hosts. But, offering a flexible policy will hopefully secure a few more bookings—which is better than no guests at all.
Weathering the storm is easier when you know what strategies to follow. We hope our survey has provided you with useful insight and tactics worth adding to your arsenal.
Now, it’s essential that you get yourself together and open up to new ideas and approaches. This way, once this crisis is over, you will be able to get straight back on track and run your business at full capacity once again.