Managing a vacation rental business is harder than it looks from the outside. What seems like a side hustle to others actually involves juggling multiple listings, vendors, and platforms.
This workload can spiral without a clear plan. You find yourself constantly reacting to issues like guest complaints, sudden breakages, and last-minute cancellations instead of working on how to grow your business.
How can you break free from this cycle and stop playing catch-up? Developing a strong vacation rental strategy can put you back in control by standardizing your processes and saving you both time and money.
Let’s explore what a great strategy should include in this article. Explore the best practices for vacation rental management with support from Hostfully Property Management System (PMS), whether you’re a single homeowner or a fully-fledged property management company.
Why a strong vacation rental strategy is essential
Developing a comprehensive strategy impacts every aspect of your vacation rental management company. Often, it can be the difference between early failure and years of success.
Here’s what you can look forward to with the right strategy (and the right vacation rental management software) in place:
- Stronger financial performance: A good strategy helps you stay fully booked and price properties effectively, maximizing your earning potential.
- Better guest experiences: Planning ahead lets you discover what your guests truly want and deliver a consistently satisfactory experience.
- Simplified operations: Clear processes save time, freeing you up to focus on expanding your portfolio, reaching new markets, and introducing new products and services.
- More reliability: Satisfied guests become repeat visitors who come for longer-term stays, meaning there are fewer gaps in your calendar.
- Increased scalability: Strong systems are easy to replicate across all your properties, meaning you can hit the ground running faster as you increase your listings.
- Improved compliance: Staying proactive helps you meet legal requirements and avoid penalties due to tax, licensing, and zoning issues (just to name a few).
Vacation Rental Management Strategies
Every vacation rental business is different, but these tried-and-tested strategies offer a strong starting point for building out your operations:
1. Stay one step ahead of your legal and financial obligations
Vacation rental management comes with financial and legal responsibilities. You must understand and maintain compliance with all these obligations to avoid penalties, lawsuits, and closure. Here’s a quick run-through of everything you usually need to stay on top of:
- Applying for a short-term rental license
- Getting written permission from property owners
- Filing and reporting income taxes
- Remitting transient occupancy taxes
- Arranging property inspections
Joanna Pascal of Wander reminds us that tax management isn’t just about avoiding penalties. “It’s crucial to understand the tax implications and potential deductions to make the most of your investment,” she says. “Understanding and claiming the right tax deductions can significantly impact the profitability of your short-term rental property. By focusing on major deductions like mortgage interest and staying informed about other eligible expenses, you can ensure that you’re not leaving money on the table.”
Specialist bookkeeping tools can help you sync transfers and keep your accounts up to date. Depending on your needs, Hostfully Accounting offers a full service, top integrations, or support for the “do-it-yourself” approach.
2. Get your properties on all the major listing sites
Listing on multiple platforms increases your visibility and booking potential. While data varies across locations, AirDNA research proves this vacation rental strategy leads to improved financial performance. They also found 60% of professional cross-listed compared with just 21% of non-professional hosts.
Updating all these platforms manually takes time and increases the risk of errors. A channel manager like Hostfully solves both problems by automatically syncing property details, availability, and pricing everywhere you list. This ensures consistency and helps you avoid double-bookings.
Pro-tip: Make sure your property is on major listing platforms like Airbnb and Vrbo, but don’t forget about niche sites. They can help you tap into specific guest segments you might otherwise miss.
3. Use dynamic pricing to maximize revenue
Dynamic pricing helps you find the optimal nightly rates based on the season, changing guest expectations, and market fluctuations. This ensures you’re never drastically under- or overcharging for your property.
As research can be time-consuming, use dynamic pricing tools to automatically change your rates. Top solutions usually integrate with PMS like Hostfully so they can read your data and directly adjust the amounts.
But Alex Foti of Bretton Woods Vacations cautions against over-relying on the tools. “In my experience, no fully automated tool has been able to replace the knowledge of your own vacation rental market. This is especially true in smaller or more particular markets like ours.” That means while tools can support your pricing strategy, don’t let them override your own intuition or local insights.
4. Establish a unique STR brand
Branding lets your business stand out in the competitive vacation rental space. It demonstrates your professionalism and your commitment to the vacation rental industry, as well as helping you resonate with your target audience more effectively.
All your branding efforts should start with your direct booking site, as this is where potential guests get their first impression of your business. Don’t have any graphic design experience? Not to worry. Hostfully enables you to create a customized website and sync it with all your other listing platforms.
Pro tip: Make sure your branding is consistent across your website, listing platforms, and social media. Even if you have an outstanding vacation home and great reviews, a haphazard approach can make your business look unprofessional.
5. Protect your properties without the awkwardness
Bad guests can lead to costly repairs or stressful disputes. Screening helps you identify potential red flags, so you can refuse bookings before it’s too late.
Asking for passports and arranging background checks can make things awkward. That’s why Hostfully has partnerships with a range of guest screening tools that can automate and standardize the process. Instead of asking guests directly, you let the tool scan for issues, verify identities, and request documents and deposits. Bonus: all this means less hassle for tired guests upon arrival.
6. Automate the check-in process
Meeting everyone at the property isn’t a sustainable business strategy. Your team may spend hours travelling between locations and waiting for guests at the doorstep.
Automation both saves you time and gives guests the flexibility to arrive when they please. Hostfully’s smart locks help you make this happen. Our software generates a new code for each booking and automatically sends it to every guest via a text message. You can check they arrived safely in real-time just by checking the dashboard.
Hostfully’s digital guidebooks can ensure they find the property and get settled quickly. You can send them the link ahead of time with directions from the airport, photos of your vacation home, and check-in instructions.
7. Personalize the guest experience
Personalization helps you stand out in a crowded marketplace and make your properties feel more welcoming to guests. While this might sound daunting, you don’t need to invest a lot of time and resources into customizing your business.
Matt Kowalewski of Wander suggests using smart devices to adjust the environment for different guest preferences. He says you can control “everything from lighting to entertainment to property access” to provide a seamless stay. Now that Hostfully is introducing its smart devices feature, you can even handle these processes through your vacation rental software.
Maybe we’re biased, but the Hostfully team would like to mention digital guidebooks again. You can include tips for making the most of amenities and personalized recommendations about the local area. All this can go a long way toward making guests feel more welcome — and it’s accessible via a convenient web link.
8. Remain available for every guest
Guests expect you to be communicative, but handling every message can quickly become unmanageable. The only solution is to use AI automation to handle the bulk of the process.
Leading PMS’s let you create message templates for key moments in the guest journey, like booking, arrival, and departure. You leave empty fields for variables like the guest name and the property address. When there’s a trigger event, the PMS fills in the details and sends the message.
Hostfully goes one step further with its AI Inbox. Now you can let our platform handle more communications than ever by using the tool to search messages for answers and suggest smart replies based on your specific business data.
9. Keep on top of cleaning and maintenance
Ineffective turnover costs you double: Once when you pay extra for labour to ensure cleaning crews get to all the properties ahead of the next stay. Twice when missed cleans or overlooked repairs inevitably lead to negative reviews.
Automating the process can help you stay on top of property care for multiple listings. Hostfully’s task management tool lets you create triggers for tasks based on arrival and departure times. Crews can receive notifications via our mobile app and plan the most efficient way to get everything done instead of going randomly between places. All the finished tasks are visible to you via the main dashboard, meaning nothing gets overlooked again.
10. Collect as many guest reviews as possible
Positive reviews are one of the fastest ways to secure more bookings. They’re a trust signal to potential guests who spot your listing on sites like Airbnb, Vrbo, and Booking.com. For example, research shows hosts with a 4.9/5 or higher on Airbnb have 18.2% higher revenue per available room (RevPAR). Additionally, these platforms tend to display your listing higher in the algorithm, meaning more people see your business before they’ve had a chance to see alternatives.
Aside from offering exemplary service, making sure guests actually remember to leave a review can help boost your ratings. Your PMS can spare you from contacting everyone individually. Hostfully automatically prompts guests a few days after they’ve left and sends any direct feedback to our Review tab, where you can check it all in one place.
11. Review and refine your approach based on data
Looking at metrics like occupancy rate, average nightly rate, and booking lead time can help you gauge your business performance. A PMS like Hostfully let’s you consolidate all this data analytics into one dashboard so you miss nothing.
Foti suggests performing regular reviews of each unit. “If the unit is underperforming, assess whether it could be due to a listing issue, a physical characteristic of the home, or a pricing issue. Adjust listings and rates as needed. He says the opposite also holds true. “If a unit is overperforming, assess whether there is an opportunity to increase rates.”
Foti adds that generally, “Simple changes in the search algorithms, review score, and pricing can have significant repercussions, so don’t become complacent.”
How to Manage Your Vacation Rental Business Efficiently with Hostfully
Running a successful vacation rental business goes far beyond offering some great properties. The most successful operators have solid strategies to maximize revenue, provide the best guest experience, and stay ahead of regulatory hurdles.
But don’t think they handle all this alone. Smart hosts know you need to use a PMS like Hostfully to automate key processes like bookings, guest communication, and branding. Because Hostfully frees up time to let you focus on the small details that matter and keep standards consistently high, no matter where you operate.
FAQs about vacation rental management strategies
What is the best way to manage a vacation rental property?
The best way to manage a vacation rental property is to combine clear processes, guest-focused service, and automation tools. PMS like Hostfully can help you streamline many operations and reduce your day-to-day workload.
How can I maximize occupancy in my vacation rental?
You can maximize occupancy in your vacation rental by using dynamic pricing tools to find the most competitive nightly rates. Using these tools ensures your prices remain appealing to guests without undercharging them and affecting your profitability.
What are the key tools for vacation rental management?
The key tools for vacation rental management include a property management system, a direct booking site, and a digital guidebook, all of which are included in Hostfully PMS. Medium to large businesses may also opt for dynamic pricing tools and accounting software to manage complex finances.
