If maximizing your vacation rental income is on your radar for 2023, you’ve picked a good time. Revenue in the vacation rental market is set to hit almost $106 billion by 2026 and the average revenue per guest is predicted to reach $117 in the next three years*. That’s a lot of revenue out there for the taking. But the more properties you have, the bigger the management challenges become. Of course, you have to invest to grow. But you only want to scale your vacation rental company if you’re adding to your bottom line in the long run. The best way to do that is with dedicated vacation rental technology to automate manual or repetitive tasks. You can refine and digitize everything from pricing to cleaning processes, all from a central platform. This makes your business more efficient, saving money, time, and stress—which has a positive impact on your bottom line. We’ve listed 14 top ways to maximize vacation rental income, including how to:
- Increase the number of ideal guests who see and book your properties
- Perfect your pricing
- Offer a consistently excellent guest experience
- Secure good reviews to build your reputation
- Maximize revenue from every stay with upsells
- Add more rental homeowners to your portfolio
- Measure success
- Leverage powerful vacation rental property management platforms to make maximizing your income much easier
*Statista, Vacation Rentals – Worldwide, 2022
14 ways to maximize vacation rental incomeMaximizing your vacation rental income is much easier if you focus on a range of ways to diversify and boost revenue. Here are our recommended tips at a glance. Let’s dive into each one in more depth.
1. Achieve multi-channel distributionThe more booking channels you list on, the better. This will increase your reach and get your listings in front of more potential guests. For even more positive results, list on niche sites aimed at your ideal guest and make sure your rentals respond to their needs. For example, if your properties are mountain cabins near hiking trails, get your listings on channels dedicated to homes in the great outdoors as well as Airbnb or Vrbo. This will boost your bookings and reviews. Property management software (PMSs) like Hostfully offer direct channel connections to major and niche online travel agencies and aggregator sites, etc. Also, integrations with dedicated channel managers if you need to distribute your rentals further—with no fear of double bookings.
2. Update your listings regularlyMaximize the appeal of your listings—and, therefore, bookings and revenue—by changing up your pages regularly. Make sure they are updated with the latest and best photos, descriptions, and amenities lists. You might also update them for the seasons (e.g. snowy photos to get people in the mood for a winter break). This will attract more people to your listings and, hopefully, get you more bookings. High quality professional photos draw more people in and show your rentals in a better light, sometimes literally. Similarly, accurate listings give guests all the information they need so there are no unpleasant surprises at check-in. The more professional your photos, description, and branding, the more you’ll be able to charge per night, too. Guests will trust you to offer them a premium experience that matches your listing. PMSs like Hostfully let you push changes across all channels in one go, saving hours compared to updating each one manually.
3. Perfect your pricingIf you’re not constantly monitoring your pricing strategy, you’re leaving money on the table. Sure, some OTAs offer basic smart pricing adjustments, but the best way to ensure the most competitive rates is to use a dynamic pricing tool. These save you hours of manual work and help maximize your revenue all year, even in low season. They analyze hundreds of data points continually to optimize your nightly rates. This might include the time of year, demand, any popular events in the local area, or the prices of your closest competitors. This ensures you’re always charging the most competitive rates and maximizing income from every stay. Most good PMSs integrate with third-party tools. Hostfully even has a tool that enables you to add varying OTA fees to your basic rental rate. So you get paid the same no matter which site your guest uses.
4. Create a direct booking websiteCreating a direct booking website is a major way to maximize revenue as you sidestep OTA fees. Even if a guest finds you and books via an OTA the first time, they may research you off the platform too. If so, and they had a good stay, you have a chance to capture them as a direct booking next time around. With direct booking, you can also capture guests’ emails, so you can market to them and build relationships. For example, send direct booking offers and seasonal discounts, news about local events, or other incentives to drive repeat bookings and referrals. If guests know, like, and trust you, they’re more likely to book directly in the future. They’re also more likely to recommend your rentals to others. Eighty-eight percent of people have the highest level of trust in a brand when a friend or family member recommends it. With a direct booking website, you also own your rental listings—forever. You’re not dependent on changing OTA algorithms. So even if something happens to Airbnb or Vrbo, you’ll still have a way to take bookings and keep your reviews.
5. Optimize your online presenceBuilding a strong online brand is another way to boost revenue. It gives you a credible online “home” in case guests search for you, increasing trust in your business. Personalize your direct booking website with brand colors, fonts, and photos. Use the same branding on your social media, too. Coordinate posts across platforms and include links to send followers to your direct website. You can also start a blog with posts that answer common guest questions, show your expertise, and include common search terms among your ideal guests. This will help you to rank higher in search engine results. Publish informative, expert posts regularly, and let people peek behind the scenes. People buy from people, and they want to get to know you and understand your story.
6. Automate stays and workflowsAutomating your vacation rental management company (VRMC) lets you maximize revenue. It frees up your time and headspace to focus on pleasing guests, innovating, or scaling. It also offers guests a better, more consistent experience. For example, you can automate:
- Guest check-in by using smart locks and unique, temporary access codes
- Pre-, in-, and post-stay messaging; for example, check-in details
- Digital ID verification
- Alerts for your cleaning team so they know when a guest has checked out
- Maintenance and cleaning supply checks
- Alerts if guests are making too much noise
- Check-out reminders
- Review requests
7. Provide a great guest experienceProviding a great guest experience is the ultimate way to maximize revenue. Pleasing guests means they’ll leave better reviews, recommend you to others, and book again. Research by SEMRush found that “If a customer feels satisfied with their interaction with your business, 96% will return and will be more likely to tell the people around them.” In addition to automated messaging, you can also give guests digital guidebooks. These, such as Hostfully’s browser-based Digital Guidebooks, are a great way to share everything from the WiFi code to how to work the coffee machine to the best local restaurants. This reduces time-consuming, repetitive messages from guests, which saves time and frustration for both of you. It also helps them enjoy their stay and feel cared for. Digitizing guidebooks also makes them easier to share, use on-the-go, and update. Plus, they’re more hygienic and portable than printed versions. With the time you save through automation and digitization, you could offer guests more personalized recommendations, or gifts and supplies. For example:
- More amenities to help you show up in OTA searches
- A gluten-free restaurant recommendation for a celiac guest
- Plant-based snacks for vegans
- Extra pet towels for a guest bringing their dog
- Food stocked in the fridge
- High-quality toiletries in your bathroom
- Luxury linens in your bedroom
- Fresh flowers on the table when guests arrive
8. Leverage upsell opportunitiesAnother way to please guests while maximizing revenue is to offer upsell services to make their stay more enjoyable or convenient—and earn you extra income from every stay.
As Will Slickers, vacation rental expert and Founder of Slick Talk media, says, “Without capturing upsells through experiences, simple early check-in/late check-out, or creating in-stay packages for your guests, you’re literally leaving money inside your property that will check out with your guests.”For example:
- Airport transfers
- Sports equipment rental
- Grocery delivery
- Extra mid-stay cleaning
- Early check-in or late check-out
- Longer stays, for example for digital nomads who can work from anywhere
- Baggage storage for luggage if guests have an early or late flight
- Baby equipment hire for guests with kids who can’t travel with bulky items
- Day trip and transportation options to help guests navigate and enjoy the local area
9. Get more reviewsAfter personal word-of-mouth recommendations, online reviews are the most effective way to gain guests’ trust and get bookings, especially as 77% of consumers “always or regularly” read online reviews. And the overall star rating of a business is the most important factor when people judge a business. Getting more reviews for your rentals helps secure more bookings and maximize revenue. The best way to do this is to automate the process using triggers and templates. So you save time writing messages and can set them up to send at the exact right time after your guest checks out. No more forgetting to ask for a review or spending time manually typing requests. And no more waiting around out of hours to hit “send” at the perfect time. You can even automate follow-up messages. And even negative reviews can be useful. Of course, you don’t want too many, but the odd negative comment gives you an opportunity to reply to guests publicly and professionally. The key is to always reach out to make amends and reply fairly. This will impress other potential guests. Less-than-perfect reviews also help to show other guests that your ratings are real and you’re not deleting bad ones. Eighty-nine percent of consumers are much more likely to use a business that responds to all of its online reviews, and 57% won’t use a business that doesn’t respond at all. And sometimes having a lot of reviews can work better than having just a few good ones: it takes four to six online reviews before someone trusts a business. Some PMSs, including Hostfully, integrate with services like Revyoos. These collate all of your reviews across different online platforms and display them on your custom-built direct booking site to build trust further. As a host, you can also review guests quickly. Mention the positives and thank them. This builds on your relationship. It’s another opportunity to impress them with your professionalism and hospitality.
10. Accept mid-term bookings in off-seasonMaximizing your vacation rental income means increasing occupancy and filling your rentals year-round. It’s rare to achieve full occupancy, but every extra guest means more revenue. One way to do this is to accept bookings in the off-season. Offer incentives (such as extra gifts as well as the usual lower prices) to guests who stay during less popular times. Some OTAs, like Booking.com, let you set seasons by specific country. This will attract guests with better deals. You can also message guests to upsell them extra nights if you have gaps in your calendar. For example, if there is an empty night in the same property the day before they check in or the day after they’re set to leave, you could offer it at a discounted rate. This boosts revenue and occupancy without requiring too much extra work or investment. Using a PMS with a centralized calendar, such as Hostfully, makes identifying gaps by property even easier.
11. Capture and close more leadsIt’s important to understand where your guests are coming from, and nurture them through their booking journey. Sending them a quote or message reply quickly makes a real difference in whether they book. Nurturing and closing leads is easier with a PMS that offers a tool designed for this purpose, like Hostfully’s Booking Pipeline. This lets you follow up with guests to encourage a booking or place a hold on a property and check availability with the vacation rental owner. You can request or record payments easily and send check-in instructions from the same platform. Closing leads and nurturing guests through each stage of their booking journey helps you to improve conversion rates and collect more revenue. It also offers better service to guests as it ensures you stay on top of everything in the booking process—so nothing slips through the cracks.
12. Impress new property ownersIf your business growth model involves adding new owners with investment properties to your portfolio, you need to impress them. You can do this by pulling together a clear presentation of your existing results, your track record for return on investment (ROI), and what your management fees cover. You also want to appear professional, reliable, communicative, and trustworthy—and show you get results. It’s easier to do this if you use a PMS with reporting and accounting features that keep automatic track of your finances. Many PMSs also enable you to create fast owner financial reports, for quick access to your results.
13. Master email marketingMarketing is key to attracting your ideal guest. Starting an Instagram or TikTok page is another way to reach people. You can share similar ideas to your blog posts (such as common questions or behind-the-scenes), but in shorter snippets. Email marketing is also powerful but gathering data from guests is only valuable if you use it to boost bookings and revenue. Using a PMS that integrates with mass email providers, such as MailChimp, lets you create your own database or lists. So you can build up regular communication with guests and stay top of mind when they book their next stay. Not all emails need to be salesy, either. You can offer a simple quick tip for guests, answer common questions, or “did you know?” titbits or behind-the-scenes peeks. You could also send updates on local events to help guests learn more about your location, or coupons, offers, and discounts to encourage bookings.
14. Measure successThey say you can’t manage what you don’t measure. So measuring your results lets you see where your revenue is coming from. So, which properties, channels, guest profiles, and marketing activities are most profitable. Measuring success means you can make data-driven decisions and build on existing success. Key performance indicators (KPIs) that feed into revenue will vary depending on your business and goals. For example:
- Number of inquiries that turn into bookings
- Percentage of listing views that convert
- Which OTAs or platforms bring in the most bookings
- Where you’re losing guests in their booking journey
- Occupancy rates
- Revenue per property
- Number of inquiries from social media
- Direct bookings vs OTA bookings
- Review ratings