Property Management 9 mins read

10 ways to increase your vacation rental earnings

By February 14, 2021 No Comments
10 Ways to Increase your Vacation Rental Earnings

As the popularity of short-term and vacation rentals continues to grow with travellers, vacation rental management is quickly turning side-hustles into full-fledged businesses. Growth (and consequently increased earnings) is usually achieved by acquiring new properties. While expanding a portfolio’s size is a great way to boost revenue, it’s often easier and less risky to optimize existing income streams. This article looks at ten ways to increase vacation rental income with the properties you currently have.

Note: Understanding that some hosts and managers run on thin profit margins, we provide both DIY and paid solutions to each strategy when possible.

1. Update your description and photos

You only get one chance to make a first impression with potential guests visiting vacation rental listing sites like Airbnb and Vrbo. That’s why your description and photos should be the “hook” that brings in your guests. Updating your listings with accurate and well-written descriptions, and some high-definition photos will have two effects. First, your listings will convert more visitors into reservations. Second, the more engaging your images are, the more visitors will click on the listing to get more information. Those clicks send a signal to the listing site’s search engine that your properties interest their visitors. The result is that your properties will rank higher in the search results. This will also lead to more reservations.

Getting started: For updating the listing descriptions, browse Airbnb, Vrbo, Booking.com and HomeToGo to see what your competitors are doing in your area. Look for the keywords they are “stuffing” in their descriptions and make a list. For the writing part, you can hire a freelancer on sites like Upwork.com to do it for you (approx. $25 to $40 per listing). You’ll need to send a rough draft and the pictures. For the images, we recommend going with a professional. Sure it’s an expense, but the results will always be better than DIYing unless you have photography skills.

2. Exponentially increase your marketing reach

According to a survey conducted with hosts and managers, roughly 40% of bookings come from Airbnb, and another 20% from Vrbo. Those with less than 10 properties rely on those sites for 90% of their bookings. If you’re looking for an easy way to increase vacation rental earnings, a straightforward tactic is increasing how many places your properties are listed on. It’s called multi-channel distribution. Instead of listing only on Airbnb, you also list on Vrbo, HomeToGo, Booking.com, etc.

Multi-channel distribution will boost revenue by increasing the number of potential guests that see your properties. This will reduce your vacancy rate, which will then let you increase your nightly rate.  Both of these will increase vacation rental income.

Getting started: Your first step is to understand multi-channel distribution’s ins and outs (we go over every detail in this paper). You can also check out this case study to see how it helped a host. The biggest challenge to multi-channel distribution is managing double-bookings. You’ll need a system to manage your properties becoming unavailable on one site once they book on another. Hosts and managers have three options here: the manual approach (this manager found out the hard way), programming iCal (can crash and isn’t bulletproof) or opting for a property management software (PMS) like Hostfully. With a PMS, you just import your properties on all the listing sites, and the software handles the calendar for you.

3. Focus on amenities that guests are willing to pay for

A quick way to increase vacation rental earnings is to provide amenities guests are willing to pay more for. Not only will it give you an edge over your competitors, but it’ll be an easy way to justify a higher nightly rate to potential guests. The challenge is knowing what those amenities are so you don’t overspend on extras guests don’t want. 

Getting started: The first step is competitor research. Look at how much you charge per night and compare it to others. Which amenities do your competitors offer that you don’t? Next, note how they market those amenities to potential guests in the listing description and images. This research will come in handy when you optimize your listings on Airbnb and Vrbo. Your last step is to confirm your findings with data. Specifically, this report on amenities appealing to guests breaks it down by geographical area. Unsurprisingly, desirable amenities for beach homes are different than for alpine cottages. 

4. Change your rates and adjust for seasonality

Short-term rental hosts and managers that “set and forget” a nightly rate end up undercharging. That’s because knowing how much to charge is both science than art. On top of that, most hosts and managers don’t track crucial vacation rental analytics. Many feel that if you raise rates too high, occupancy will drop. But sometimes that’s not a bad thing. Confusing, isn’t it?

Getting started: There are two approaches to finding the optimal nightly rate for your vacation rentals: DIY or automation.

If you chose to go DIY, look at how much your competitors charge—factor in amenities and location compared to your own properties. Then estimate when seasonality spikes will happen and boost rates for weekends. To get an idea of seasonality changes, you can check out free data sets like the Future Bookings Report.

The problem with the DIY approach is how time-consuming it is. This is where dynamic pricing software really shines. In a nutshell, dynamic pricing looks at nearby competitors, your vacancy rates, and market trends. The AI crunches the variables and comes up with optimized daily rates. If there’s an uptick, dynamic pricing auto-updates your rates. Dynamic pricing is one of those “set it and forget it” every vacation rental manager should consider. In the worse case, the subscription cost breaks even with the extra income. But the majority of vacation rental managers report significant revenue boosts. 

5. Take an honest look at your processes and optimize them

Many hosts and managers get into the vacation rental industry for supplemental income. They start with one property, but once they realize the income-generating potential of short-term rentals, they expand their portfolio. As the business grows, it becomes reliant on a patchwork of processes to manage day-to-day activities.

The problem with processes built over time is that they may not be efficient. And inefficient processes can cost you in the long run. Think of all that wasted time punching in data onto a spreadsheet. A quick way to boost vacation rental revenue is to look at each business process and find out if there’s a better way to do things.

Getting started: To get a better understanding of the varying levels of sophistication in vacation rental management, start by looking at how other managers structure their processes. Our industry-leading paper looked at each vacation rental management process and mapped out the path to efficiency. How does this apply to you? Just look at where you are on the matrix, and implement the next level. There’s no point reinventing the wheel.

6. Automate everything you can

How much time do you spend on repetitive tasks in front of a screen? For some, it’s generating owner reports. For others, it’s coordinating cleaners. Now ask yourself this question: if it’s a repetitive task, can a computer do it for me? Here’s a hint: the answer is always yes.

Getting started: Here, you have two options. The first is with Zapier. Zapier can get any two apps to work together. So you want to import earnings from Airbnb into a spreadsheet? No problem, Zapier can connect the two. The second is with a PMS. Unlike Zapier, a dedicated short-term rental PMS is purpose-built for our industry’s processes. That means more reliability and more features hosts and managers use. PMSs also integrate with third-party apps, making it possible to automate almost any process. Here are a few case studies of how a PMS can boost your earnings: 

7. Sell perks like late check-out and other upgrades

We’ve looked at boosting revenue by reducing expenses or increasing earnings. However, there’s also a third option: creating entirely new revenue streams. Hosts and managers who have taken this trick from the hotel industry report two benefits. Not only do they earn more, but they also boost the guest experience (which leads to more 5-star reviews).

Getting started: Selling perks like early check-in, late check-out or mid-stay cleanings used to be complicated. However, digital guidebooks solve this problem for you. For example, Hostfully’s guidebook platform includes a Marketplace feature. Just create your own upsell and connect a payment processor like PayPal or Stripe. This is an easy revenue-boosting to try out since Hostfully offers a free guidebook trial.

guidebook winning feature

8. Make your properties more efficient

A less-than-courteous guest can cut into your income by leaving a window open while blasting the air conditioning. A smart thermostat can help you monitor your home’s temperature remotely, insuring you against wasted heating and cooling. Your guests will likely enjoy the high-tech, automated climate control, and you can rest easy knowing your energy bills won’t catch you by surprise.

Getting started: Add door, window, motion, and water-leak sensors to alert you to any wasted utilities. Some sensors work off software that integrates into your PMS provider. This bonus feature makes it possible to lower and raise temperature based on check-in and check-out times. 

9. Connect with your guests

Going the extra mile can help your guests feel at home in your vacation rental. Take some extra time to connect with them, and make yourself available to answer questions or attend to their requests. A simple phone call at the start of a booking shows your guests that they’re welcome in your home and that their experience matters to you.

Getting started: Sharing a few recommendations and explaining the best way for your guests to contact you can help them relax. Plus, showing them you’re a welcoming host can encourage them to make renting your vacation property an annual tradition.

10. Make a marketing plan

All the home improvement in the world can’t help your guests find your listing. Creating a marketing plan for your rental property can ensure you’re reaching your apartment’s maximum potential audience. Start by posting your listing on social media channels, and ask your guests to share your listing with their friends.

Getting started: List the common interests of people who tend to like your style of property and the surrounding area, then plan individual steps for how your marketing can reach each interest. For example, if your area offers hiking and backpacking opportunities, try promoting your property online in hiking and adventuring groups.