That time of year is an article series that highlights vacation rental revenue management tips and tricks that vacation rental owners and short term rental managers can take throughout the calendar to improve their performance.
Every year around the holidays RevPARTY sees the same predictable pattern.
Vacation rental portfolios either over perform or underperform through the summer and there’s a rush of activity in the fall. Fortunate managers use their cash surplus to reinvest into revenue management consulting and the business, while the less fortunate managers reach out for revenue management help to get on track for the holidays before the year closes.
In early November, some short-term property managers begin to panic when their holidays aren’t booking and do everything in their power to course correct. The others have faith that it will all work itself out.
By mid-December, portfolio performance becomes more evident but if you’ve missed the boat its often to late to recover lost revenue, so everyone goes into cruise control for the holidays. Everyone waits out winter and then a few proactive warm weather vacation rental managers reach out for consulting in spring … gearing up for their big money months in summer.
We at RevPARTY want to help. We want to provide some actionable insights that any vacation rental owner or manager can take now to help their holiday season, improve their holidays next year, and improve their performance without waiting till Spring.
Advantages
Vacation rentals have two distinct advantages over hotels when it comes to holiday bookings.
First, vacation rentals are better suited to accommodate an extended stay. During the holidays, families can finally arrange for everyone to be off, from work or school, at the same time for more than the usual two-day weekend. This translates to longer stays to make the travel worth it. Vacation rentals naturally appeal to longer stays as they often have multiple bedrooms, kitchens, living rooms, and generally more space and functionality than a normal hotel.
Second, vacation rentals are better suited for family trips or lodging for groups. During the holidays, families can finally arrange for everyone to be off, from work or school, at the same time so larger groups are travelling. Vacation rentals naturally appeal to larger groups as they often have multiple bedrooms, kitchens, living rooms, and generally more space and functionality than a normal hotel.
Longer stays and larger groups are often correlated in the hospitality industry. Holiday bookings naturally see a longer length of stay as groups of people travel. The larger the group, the longer the length of stay usually is. The more people and the longer the length of stay the more a vacation rental becomes appealing.
Disadvantages
On the other hand, vacation rentals have two distinct disadvantages compared to hotels when it comes to holiday bookings.
First, there is usually a much lower budget for vacation rental marketing than hotels. Hotels bake in marketing and acquisition costs into their finances and can deploy resources around key time periods. They also benefit from being part of a hotel chain or franchises loyalty program, and the overall brand advertising. Vacation rentals, especially those of smaller owners and operators, simply don’t have the same budget to lure potential guests in.
Finally, there is rarely a vacation rental pricing strategy laid out for holiday seasons. Short-term rentals may have an expected booking curve, competitive positioning, and ADR/occupancy/RevPAR targets but very few portfolios are proactive as to how all of this will change for the holidays. Having a clear holiday pricing strategy, or at least a tool belt of tactics to use, is a leg up on the competition and foundational to better performance.
Tips & Tricks
Without further ado, here are some actionable vacation rental revenue management tips and tricks any vacation rental manager can easily use to improve holiday performance:
Book for next year, this year. This tactic works for any annually reoccurring event: a conference, family reunion, music festival, sports rivalry, or holiday. Any repeatable experience. As guests depart, either via in-room collateral or with a follow-up email, ask them if they’d like to reserve a rental for the same event the following year. If the guest had a good experience, you catch them at the height of their excitement when they’re most willing to buy. This leads to higher conversion rates (the guests have self-selected as interested in the event and are would-be repeat bookers) and adds stability and predictability to your financial performance the following year.
Know your market and increase or decrease price appropriately. While this can be said for any time of year, it’s worth calling out here because holidays often book differently than shoulder weeks in the same market. For instance, Miami is extremely popular for Christmas and late December stays which doesn’t naturally match surrounding winter demand. Ski locations book for all of winter break, Miami is a key family vacation spot but an urban area, out of towners love to visit NYC, and New Year’s Eve is a hot seller in any downtown. Knowing how specific holidays behave in specific markets is a key to success.
Make advertising and listing copy match the season. Just like pools make good cover photos for summer destinations, a snowy holiday paradise is great at attracting holiday travelers. Be sure to implement this ahead of time according to the portfolio’s booking window. For example, if most holiday bookings are received 60 to 90 days ahead of the stay date then we’d want to start holiday adjusted ads and copy to start in September or October.
Use newsletters, email blasts, and advertising focused on rates, specials, and availability during the holidays. Marketing becomes so much easier when its focused. Holidays occur on specific dates, have specific themes and imagery attached to them, are readily identifiable by potential guests, and are all ready socially accepted times of targeted advertising. Advertising specific pricing changes, promotion, or availability with specific holiday themes is an easy way to reach potential guests more often and are tied to much more measurable results.
Create a Holiday Package/Deal. Provide a discount, gift, a donation to charity, anything that adds more value to the vacation rental. Packages and deals are expected around the holidays and the theme is already there. Beyond just attracting the normally targeted guests, its a way to differentiate against the competition which not only improves the bottom line but could add long term brand value.
By using these tips and tricks any vacation rental portfolio can not only improve their performance this year but set themselves up for success next year. Many of these are as easy as editing a post, sending an email, changing a picture, or making a phone call. With revenue management tactics so easy to use, there’s no reason to leave money on the table. Let RevPARTY help you succeed this holiday season.