Maximizing Revenue from Vacation Rental Properties: Insights for Property Managers

Learn about STR branding, guest types, pricing software, upsell tactics, direct booking strategies, and how to gain homeowner trust.
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December 19, 2023
9
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Maximizing Revenue from Vacation Rental Properties: Insights for Property Managers

Vacation rental owners will judge you on: 

  • Occupancy rates
  • Average daily rate (ADR)
  • Revenue by available room (RevPAR)
  • Cancellation rates
  • Average guest ratings

These areas of performance, alongside the scalability of your management processes, will dictate your ability to grow your business.

Crucially, all these key elements are interrelated—the guest experience affects ratings and occupancy, while the actions you take to increase revenue can also reduce cancellation rates. Equally, the efficiency of your operations will influence all of the above.

So, as you take steps to maximize your vacation rental income, you also benefit from greater customer loyalty, better homeowner relationships, and more potential for business growth.

In this article, we look at seven actions you can take to maximize revenue, including ways to: 

  • Automate key processes
  • Price with accuracy
  • Increase upsells
  • Reduce your dependence on third-party booking channels

Along the way, we provide examples of the needs and expectations of different types of guest, how you engage them pre-booking, how to reduce cancellations, and how to create customer delight.

Also, we discuss what tools you can use to automate these processes and reduce your manual tasks—including dynamic pricing software, Minut’s vacation rental home protection system, and Minut’s scheduled guest messaging feature.

7 Ways to maximize your revenue from vacation rental properties

See our top recommendations on how to generate more income from your vacation rental business, with real-life examples of effective ways to market your services, software recommendations, and how to drive revenue with upsells. 

1. Define exactly who you want to sell to

Different locations, property types, and amenities attract different types of guest. And different types of guest will have different expectations about your service, they’ll spend their money in different ways, and they’ll be attracted to different marketing strategies.

So identifying your ideal guest type plays a crucial role in your revenue generation strategies, from where and how you list your properties, to the comforts and conveniences you provide, and the add-on services you offer. 

As well as considering the competition you face and the markets you operate in, you should think about what excites you most as a provider of hospitality and the experiences you wish to create. Also, you may be able to identify a niche market that you can tap into, where you can resonate with a specific audience, cater to their needs, and develop customer loyalty.

Here are some examples of short-term rental (STR) guest types, what they typically look for in a stay, and the kinds of upsells they’re often interested in (note that we talk more about upsells later in the article).

Table that categorizes by type of guest, their ideal locations, property types, amenities sought, length of stay, and upsell opportunities for each guest type

2. Make your branding a core part of your marketing strategy

Wherever your guests experience your brand, they should immediately understand your values, the kind of services they can expect, and the quality of not only the guest experience, but the entire guest journey, including pre-check-in and post-check-out.

So, from online travel agencies (OTAs) to your direct booking site (we discuss direct booking strategies below), guidebook, and messages, you should be consistent across the following areas:

  • Your tone of voice (TOV) and communication style
  • Your use of imagery, including property photography and brand logo and colors
  • Your values and concerns, such as being environmentally friendly, providing premium service, or ensuring privacy, peace, and security

As you can imagine, all these areas of branding will be influenced by your target guest type. But homeowners are also your target audience, so you need to consider them in your messaging, too.

So, while privacy, peace, and security will probably resonate strongly with a digital nomad or business traveler, effectively expressing these concerns as a core feature of your offering could also be important to prospective property owners.

Recreation Vacation Rentals property management page for owners
Recreation Vacation Rentals have very strong messaging for both guests and homeowners, focusing on peace of mind for the latter. Source
Pro tip

With an all-in-one noise monitor, you can ensure more than peaceful stays—Minut protects your vacation homes from cigarette smoke, detects window breakage and motion, and includes a security alarm. This enhances the guest experience and will convince homeowners you can keep their properties safe.

3. Optimize and continually update your listings

Your OTA listings will often be the first impression potential guests have of your brand, so as well as giving you the opportunity to stand out from the competition, they’re essential to how you connect with the concerns of your target audience.

With this in mind, gear your listings toward your audience. If your ideal guest type is families, make your imagery family-oriented, with not only photos of unique features and spacious living and outdoor areas, but also close-ups of your child-proofed amenities and actual families enjoying those spaces. This way, you sell not just the vacation rental, but the guest experience itself.

Also, make sure your listing imagery and descriptions reflect the season your guests are booking for, use high-quality professional photos where possible, and look to highlight one outstanding feature—a wood burner, starry sky, playroom, or workstation—that will immediately attract the attention of your target guest.

Vrbo Whistler listing showing skiing, cyclists, and swimmers
This Vrbo Whistler listing sells the guest experience and features professional photography from across the seasons. Source

4. Implement dynamic pricing and revenue management tools

To maximize your vacation rental business revenue, you need to optimize your rates. This will help keep your occupancy rates high—which is also an important selling point for owners—and ensure you don’t leave money on the table by undercharging during a surge in demand.

But consistently maintaining ideal nightly rates is a huge challenge when there are so many factors at play—seasonality, local events, economic factors, competitor rates… So, automate your pricing using dynamic pricing tools.

Beyond Pricing dynamic pricing dashboard
Dynamic pricing tools reduce your manual tasks and align your rates more closely with fluctuations in demand and the local vacation rental market. Source

Platforms like Beyond Pricing, PriceLabs, and Wheelhouse connect with your property management system (PMS) and booking sites to automate your rental rates, keep you competitive, and prevent you from missing out on high-demand events.

As well as helping you maximize revenue and occupancy, dynamic pricing tools save you from having to carry out complex manual processes that inevitably lead to human error and lost income.

4. List across a range of channels

Just as your listing descriptions and pricing strategies are critical to your occupancy rates, so is where you list. 

If you rely on a small number of OTAs to fill your booking calendar, you could suddenly struggle to achieve maximum occupancy during peak season if you drop out of that platform’s search results. Equally, this could see your off-season performance take a dramatic plunge.

By diversifying your distribution strategy, though, you can list across all the major OTAs like Airbnb, Vrbo, and Booking.com, and niche sites like Kid & Coe, Nomad Stays, and Vegvisits, giving you a much stronger chance of achieving high occupancy rates.

To synchronize your listings and booking calendar across multiple platforms and your own direct booking site (we look at direct booking strategies next), use a channel manager like Rentals United,

NextPax, or Hosthub.

5. Develop a direct booking strategy

Increasing your number of direct bookings doesn’t only further diversify your channel distribution, but also helps you create customer loyalty—so repeat guests—gain referrals, and avoid the commission charges of OTAs.

Here are some key elements of an effective direct booking strategy:

a) A direct booking website

Your website should reflect your brand and provide a user-friendly booking experience—the fewer steps required for a guest to book a stay, the more direct bookings you’ll earn. Also, optimize your website for search engines (SEO) to increase visibility—use keywords that include your local area and regularly add quality content to your blog.

Anna Maria Island Vacation Rentals homepage
A direct booking site gives you more control over your business and makes you less dependent on third-party platforms. Source

b) Review management

Encourage guests to leave positive reviews and feature these on your homepage and social media accounts as social proof of your high-quality service. You can automate scheduled messages that ask guests to leave a review using Minut’s scheduled messaging feature.

c) Social media presence

Create a following and community where you showcase your properties, share guest experiences, and interact with potential guests. Also, provide updates about the latest news from your local area and share details on special promotions (for example, in the off-season).

d) Email marketing campaigns

Build an email list from old and potential guests and send regular newsletters with seasonal updates, photos, news, and special offers. If possible, personalize those offers based on previous booking history to entice repeat guests (you can send these 8-10 months after they booked so they can book again at the same time of year).

e) Loyalty programs and referral incentives

Offer discounts to repeat guests or for referrals that lead to a booking. You can also offer special deals on services like equipment hire, yoga classes, or private tours.

6. Create a fantastic, frictionless guest experience

The guest experiences you create are central to your ability to drive occupancy, revenue, and portfolio growth. Some of the core features of a fantastic guest experience include:

  • Streamlined operations so you can guarantee cleanliness every time
  • Cigarette smoke prevention, noise prevention, and security (Minut’s all-in-one noise monitor provides multiple home protection solutions including all these and more)
  • Quality amenities in every room and outdoors (think furnishings, crockery, and linens as well as condiments, teas, coffee, and toiletries)
  • Streamlined communications (with Minut’s scheduled messaging, this can be automated so guests always have the information they need)
  • Frictionless check-in, which you can facilitate with keyless entry and a digital guide to provide insights into the stay and property before check-in

To make your guest experience stand out even more, you should look to create customer delight, so guests are surprised and have their expectations surpassed. One way to achieve this is with a personalized welcome basket that includes locally produced foods. 

Beautifully presented welcome basket with fresh flowers
A welcome basket shows you care and makes guests feel special. Source

Also, consider what your ideal guest would love and incorporate those ideas into their stay. Here are some examples:

  • For families
  • Kids' entertainment pack: Include items like coloring books, puzzles, and board games
  • A custom guide to family-friendly activities, parks, and attractions in the area
  • For business travelers
  • High-quality local coffee and gourmet snacks for a quick energy boost
  • Personal recommendations on local dining
  • For nature lovers
  • Hiking trail maps of local trails with recommended stop-offs for breaks and photos
  • Environmentally friendly toiletries and kitchen items
  • For pet owners
  • Doggie treats: Biscuits, bowls, and toys
  • Cleaning station: A clearly designated hose-down area for after a muddy walk
  • For luxury travelers
  • Gourmet hamper: A basket filled with luxury goods, such as wines, cheeses, and premium chocolates
  • Concierge service: Chauffeured services, booking services, and spa treatments

7. Upsell services that target guests will love

While the upsell process must never feel pressured or overwhelming for guests, it can still begin pre-check-in. 

This serves two purposes: You start driving increased revenue early with a better chance of the guest making an additional purchase, and you engage the guest in their stay and the memorable experiences you promise, which reduces the chance of a cancellation.

You can build this upsell process into your standard operating procedures (SOPs) so it’s as automated as possible. 

For example, using Minut’s scheduled messaging with auto-personalized templates, you can offer your guests add-on services ranging from the practical to the luxurious—just add any details to your pre-check-in information and a simple way for the guest to confirm the request.

Minut’s Guest Connect feature
You can use a scheduled welcome message to inform guests about your add-on services. Source

You can see some examples of upsells by guest type within the table in our tip on identifying your target audience. Here are some other upsells you could consider offering:

  • Discounted extra nights (especially useful to fill ‘orphan nights’ between stays)
  • Airport pick-up
  • Romantic reception with roses, wine, and handmade chocolates
  • Bicycle, golf club, fishing gear, ski, surfboard, or canoe/paddle/life jacket hire
  • Personal chef

Increase vacation rental revenue, enhance the guest experience, and grow your portfolio

You can increase revenue, improve your guest ratings, and make your business more scalable by:

  • Targeting specific guest types across your branding, messaging, and services
  • Factoring property owner concerns into your services with noise monitoring and home protection measures
  • Continually optimizing your listings and by selling the experience, not just the property
  • Using vacation rental tools like a channel manager and dynamic pricing software to increase your presence and optimize rates
  • Implementing a direct booking strategy to get more repeat guests and be less dependent on OTAs
  • Building SOPs around upsells to drive further revenue and make your stays even more memorable

On top of these strategies to maximize your STR income, an all-in-one noise monitor plays an important role by keeping your vacation rentals safe, detecting cigarette smoke, and reducing your workload with scheduled messaging, automated alerts, and services like Call Assist

So with Minut, you can manage remotely with confidence, and give prospective homeowner clients a reason to trust your services.

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