The vacation rental industry is now over $85bn annually, and is growing rapidly. In the US alone, vacation rentals make up 20% of the total accommodation market and 7% of the total travel industry. As a first step towards generating additional income, owners are listing their properties on vacation rental portals such as AirBnb, HomeAway/VRBO or TripAdvisor/Flipkey.
However, an increasing number of owners are becoming completely dependent on these portals for their bookings. What’s the problem with this you may ask? Owners are not maximizing their potential revenue from their properties. And that’s a problem.
This “leakage” is caused in two ways. Portals such as AirBnb charge referral fees and commissions for each booking made. Also, portals have no incentive to help property owners generate repeat business from previous tenants, as they miss out on the booking commission the second (and subsequent) time around if guests go direct to owners without booking through the portal.
The most successful property owners maximize the revenue per booking by becoming independent from major vacation rental listing portals as soon as possible. They focus on converting new leads to repeat business and lifelong renters. They focus on generating repeat bookings by providing guests with a superior experience, from booking to departure, meaning that not only are guests likely to return, but they are likely to tell their friends and family. And these guests book direct with the owner, meaning owners don’t need to pay commissions to the various portals.
This strategic move toward becoming independent is conceptualized by blogger Matt Landau in his infamous Listing Site Independence(LSI) graph. Owners should have it in mind to move towards independence from portals, which will allow them to maximize the potential revenue generated from their vacation rental.
So, how do you move towards vacation rental independence? We believe there are 5 stages to becoming gradually independent:
1. The Launch Phase – getting your property listing ready
Focus on providing the best information to your guests to help them make a decision to book your property without needing further information, or being disappointed when they arrive that they did not get what they thought they were getting. For optimal information, we recommend:
- At least 20 professional, high resolution photos (here we recommend our creative partner http://vacationrentals.photos for technical perfection and creation of a unique ambiance)
- At least 400 words of descriptive, creative content (make people imagine how amazing it would be to stay at your home)
- Respond quickly to any enquiries – most potential guests will be looking at a number of other properties as well as yours so responding quickly helps convert these potential guests into actual paying guests
- Get favorable reviews on your property up there ASAP! Even consider lowering your price just to get the first guests in there to leave great reviews
2. The Branding and Marketing – define your identity/uniqueness, spread awareness
This second phase is about introspecting a bit a finding what makes your business attractive, unique if possible. Once you find that identity, you need to let the world know you exist. It is likely that you will need to start off by listing your property on the various vacation rental portals that exist today. In addition to this, look for travel forums and sites where people are talking about accommodation for holidays and short term, and contribute to those conversations. As a start, also use your social media accounts to start spreading the word that you’re now live! It’s amazing how many friends you have who may know people looking to rent a place for their vacation.
3. The realization phase- it’s not as easy as it looks
There are many touch points along the vacation rental customer journey – from you listing your property online, right through to cleaning the property once a guest leaves. Even if you only have one property, you will be getting enquiries from different people on different sites that you may not see come through because you’re at work, you will need to send various responses and instructions, manage and update your calendar, make sure your pricing is competitive and reflects the market, arrange entry for guests, be on hand during their stay, facilitate payment, arrange cleaning, and the list goes on (and ON). Many people have more than one vacation rental property which further increases complexity. At this stage, you realize that you may need some help. But never fear, because help exists.
4. The streamlining and automation phase – make it easy for you and your guests!
Fortunately, there are now products coming onto the VR market that assist you managing your vacation rental/s – whether you’re an individual managing one or two properties, or a professional agent managing hundreds of properties. From calendar and pricing management to automated emails and entry codes, products now exist to help you manage your vacation rental.
One-stop management shop platforms like Orbirental, which integrates with various best practice partners in the VR space like BeyondPricing (pricing automation) or IglooHome (home automation), will become your friend. You can manage and respond to leads quickly, make sure your pricing is optimized for the market, automate as many processes along the customer journey as possible (such as the delivery of instructions, key codes, payments etc), and also automate various activities once the guests leave – such as having the house cleaned. Not only does this make your life easier as a property owner, but also it provides for a sensational experience for your guest, meaning they are likely to return and tell their friends and family to do the same.
Orbirental will also provide you with direct qualified leads through our integration with meta search engines such as Tripping.com or HomeToGo, bringing you booking inquiries directly into your customized workflow.
5. Independence – all your booking revenue is yours to keep!
With new leads generated by repeat customers and word of mouth referrals, you will move along the LSI curve and approach full independence, meaning your booking revenue will be yours to keep, and not share. Now who doesn’t want that!