Running a vacation rental business is no easy feat. Between the upfront costs, the monthly expenses, and the hosting fees, you need every penny you can get. Luckily there are many ways to increase your vacation rental revenue AND decrease your workload simultaneously! Sound too good to be true? It’s not, and we’ll explain how.
A profitable vacation rental business is well-managed, has a high occupancy rate, and is reasonably priced for its area and amenities. But beyond those basics is that intangible element that every vacationer wants: an experience.
We’ll break it down and show you the 14-part formula for increasing your vacation rental revenue and providing an experience your guests won’t forget.
Tips To Increase Your Vacation Rental Revenue
Providing an unforgettable experience helps ensure your vacation property is booked solid and raking in profits for years to come. It’s good for your bottom line, and it’s good for your guests, so how do you do it?
1. The Price Should Be Right
The first step is to increase your vacation rental revenue is through the pricing. If your prices are too low, you’re leaving money on the table. If your prices are too high for what you’re offering, guests will feel ripped off, and it will show up in negative ratings and fewer bookings
The easiest way to ensure your pricing is fair and in line with the market is to utilize AI software that compares your listing to others in the area while also considering the seasonal demand. A beach property, for example, goes for a higher price in the summertime, whereas a ski lodge can charge more during the winter. This feature is available with most Property Management Systems (PMS), so pay attention before deciding on a software for you.
Dynamic pricing software has revolutionized the vacation rental industry, offering property owners and managers a competitive edge in optimizing rental rates. Three prominent players in this field are Beyond Pricing, Wheelhouse, and Price Labs. These innovative platforms utilize advanced algorithms and data analytics to dynamically adjust rental prices based on market demand, seasonality, local events, and other relevant factors. With these dynamic pricing software solutions, vacation rental professionals can effectively navigate the ever-changing market dynamics and achieve optimal occupancy rates and profitability.
”“For hosts and property managers with a portfolio of less than $2.5M: On average, these Beyond users grew their listings by 40%+ annually. For hosts and property managers with a portfolio between $2.5M and $7.5M: On average, they grew their listings by 30%+ annually. For property managers with a portfolio greater than $7.5M: On average, they grew their listings by over 19%+ annually."
Rachel Scott, from Beyond Pricing
2. Automate Everything You Can
Does vacation rental automation sound like a dream come true? Well, it really is. With the help of some handy AI tools, you can use technology to streamline the vacation rental process from start to finish. This encompasses everything from online booking and payment processing to automatic cleaning and maintenance.
By utilizing a guest experience software that integrates with your PMS, guest verification, and maintenance schedules, you can stop worrying about the day-to-day and instead focus on growing your business. Here are just a few things you can start automating today!
Think the booking process is automated by design? Think again. Sure, you may not be accepting reservations over the phone, but that doesn’t mean that increasing your inquiry to booking conversion isn’t still a lot of work.
Eliminate the menial task of answering inquiries manually by implementing AI tools that collect sentiment and context to answer frequently asked questions. Reduce response time for your customers, provide timely and helpful communication, and show guests that booking your property comes with peace of mind.
You can utilize AI software to take your guests from the search stage all the way through to checking out and leaving a review. Provide top-notch communication and responsiveness to general inquiries without lifting a finger. That frees up more time to focus on more urgent and specific guest questions.
Every guest wants an effortless check-in and check-out process. Automating this system with smart locks ensures your property is secure, safe for your guests, and easy to use.
Smart locks can be programmed with unique and temporary access codes. Automatically generate a different code for each guest that is only functional for the duration of their stay. Generate unique codes for your maintenance and cleaning crews too.
No more worrying about who has the key or manually changing the entrance code between each guest. Set up automatic messaging streams to welcome guests and inform them of their code for a seamless and hands-off check-in experience.
3. Create Upsell Opportunities to Increase Revenue
As a vacation rental owner, you always want to be looking for the best way to increase your revenue and profit. It goes without saying, you can’t do this by price gouging your guests. They won’t like it. An alternative way of increasing your revenue per guest without sacrificing the guest experience is by offering upsells.
Guests usually spend 25% of their vacation budget on accommodation and 75% on experiences. We’ve already mentioned how experience is what sets a vacation rental property apart. So why don’t you capitalize on that 75% by creating upsell experiences your guests will love?
- Airport shuttle
- Uber or Lyft
- Rental car
- Grocery delivery
- Baby and pet supplies
- Location-specific equipment (paddleboards and kayaks for a waterfront property)
Sound like a lot of work? The good news is: it doesn’t have to be! Implementing a guest experience management platform, like Enso Connect, means you can create these upsells and have them marketed to your guests on autopilot. With the help of AI integration, your guests will be shown the upsells that are most relevant to them and their stay.
For more tips, tricks, and ideas for vacation rental upsells, check out our in-depth article on the topic!
”“Only 3% of Enso-connected operators are using the upsell functionality. But the ones who do cover their subscription fee and grow their revenue per guest very quickly.”
Francois Gouelo, co-founder and CEO of Enso Connect
4. Provide An Outstanding Guest Experience
An outstanding guest experience is the bread and butter of a successful vacation rental business. If your vacation rental is not consistently creating an awesome experience for your guests, you will notice a stagnation or decline in your revenue over time. So cash in on that good karma by putting the needs of your guests first and watch as they market you for free. You can’t cut any corners if you want a stellar rating, so don’t overlook the details and add a personal touch whenever you can!
Here are the 4 must-have ingredients for providing a fantastic guest experience:
It doesn’t matter if your property has the best location on the planet; no one wants to pay to sleep in a pigsty. Make sure your rental property is clean and well-maintained so that your guests are comfortable throughout their stay.
Has your guest asked you a question or need help with checking in? Answer them asap. Nothing is more frustrating than an unresponsive host. Be available to answer any questions or address any concerns your guests may have. Provide a physical or digital welcome packet with information about the property and the surrounding area. You can merge all these elements together by opting to use a guest experience management platform like Enso Connect.
Enso Connect revolutionizes guest communication in the hospitality industry by improving response times, streamlining the communication process, and integrating AI tools. With Enso Connect, guests receive timely and satisfactory responses, while communication teams benefit from centralized management and AI-powered messages for routine inquiries. This comprehensive solution enhances the guest experience, boosts satisfaction, and improves operational efficiency.
Take the time to get to know your audience. Why are they traveling? What is it about your property that appeals? Providing the basic amenities like linens, towels, and kitchen essentials are expected of any vacation rental property. Go above and beyond by providing a dedicated workspace for the traveling professional or offering children’s books and toys for vacationing families.
These personal touches show that you’ve really considered your guest and their needs. It can go a long way toward providing a fantastic experience and an equally fantastic review.
Focusing on guest experience is the easiest step you can take that will pay dividends for your vacation rental property business. By following these simple tips, you can be sure to provide your guests with an outstanding vacation and demand the best nightly rates during both the peak season and winter season.
5. Enhance Your Listing
Create a compelling and accurate description with high-quality photos to attract potential guests. Your vacation rental’s listing is the first impression potential guests will have, so it’s crucial to make it captivating and accurate.
- Craft a compelling description that highlights the unique features, amenities, and experiences your property offers.
- Take high quality photos (even if that means hiring a professional photographer) that showcase the best aspects of your rental home, ensuring they are well-lit and showcase different angles and all the rooms.
By investing time and effort into creating an enticing listing, you’ll attract more guests and increase the chances of booking success for your vacation rental through Enso Connect’s software solutions.
6. Upgrade the Decor
The ambiance and visual appeal of your vacation rental play a significant role in attracting guests and setting your property apart from the competition. Consider investing in upgrading the decor to create a welcoming and comfortable atmosphere.
- Choose stylish and durable furnishings that not only look great but also withstand the wear and tear of frequent use.
- Pay attention to details such as artwork, lighting fixtures, and decorative accents that enhance the overall aesthetics.
By upgrading the decor of your vacation rental, you’ll create a memorable experience for your guests, increasing the chances of positive reviews, repeat bookings, and recommendations to others.
6. List on Multiple Platforms
If you’re trying to increase your vacation rental revenue, one of the best strategies is by listing your property on multiple online travel agencies, including popular platforms like Airbnb, Booking.com, VRBO, and Google Travel, brings several benefits to your business. The primary advantage lies in the basic principle of supply and demand. By exposing your property to a broader audience across different platforms, you can generate higher demand for your listings. This increased demand allows you to charge higher rates for your rental because the supply of available nights remains fixed at a maximum of 365.
Listing on multiple online travel agencies also provides you with more flexibility and control. You can adjust pricing, availability, and other listing details based on each platform’s features and market dynamics. It allows you to experiment with different strategies, such as offering exclusive promotions or discounts on specific platforms to attract more bookings.
7. Offer Flexible Check-in/ Check-out Times
One way to enhance the guest experience and increase revenue for your vacation rental is by offering flexible check-in and check-out options. Enso Connect’s software solutions can assist in automating and managing these processes efficiently. By accommodating early check-ins or late check-outs whenever possible, you provide added convenience for your guests and create a positive impression. This flexibility can be especially appealing to travelers with varying schedules or those arriving from different time zones.
8. Partner with Local Activity Providers
Partnering with local activity providers and negotiating a referral commission for each guest you recommend is a smart strategy to enhance the guest experience and generate additional revenue for your vacation rental.
In the tourism industry, it is common for vacation rental owners to establish partnerships with activity providers, such as:
- Zipline Operators,
- White Water Rafting or Kayaking Companies,
- Tour Companies,
- Bike Rentals,
- Jet Skiing or Boat Rentals,
- Wine or Brewery Tours,
- Spa and Wellness Centers,
- Golf Courses
By recommending these local experiences to your guests, you not only enhance their stay but also earn a commission on bookings made through your referral. Typically, referral commissions range between 10% to 20% in the industry. This mutually beneficial collaboration allows you to offer your guests a wide range of exciting activities while adding an extra revenue stream to your vacation rental business. Don’t hesitate to reach out to local activity providers and discuss partnership opportunities that can benefit both parties.
9. Retarget Your Top Paying Guests
Retargeting top paying guests is a valuable strategy to maximize revenue for your vacation rental business. Enso Connect’s software solutions offer an automated approach to reach out to past guests who have booked high-dollar reservations. For instance, if your typical guest spends $1,000 on their reservation, you can set up an automation that follows up with guests who have spent over $2,000 and were highly satisfied with their stay.
This targeted approach ensures you prioritize valuable guests who have demonstrated a willingness to spend more, increasing the likelihood of securing future bookings with higher revenue potential. Enso Connect’s automation capabilities streamline the process, saving you time and effort while effectively nurturing your relationship with top paying guests.
10. Encourage Direct Bookings
Direct bookings present an excellent opportunity to rebook past guests and attract new ones, benefiting both you and the guest. When structured effectively, this approach can be a win-win scenario. By offering direct bookings, you can provide guests with a more personalized experience and save them the additional costs associated with OTA (Online Travel Agency) fees, which typically range between 15% to 20%.
Offering a small discount as an incentive can further entice guests to book directly with you. By bypassing the OTA, you gain more control over the booking process and can establish a direct line of communication with guests, allowing for better customer service and the opportunity to build long-term relationships.
Most modern property management systems offer a free booking engine that can help facilitate direct bookings, streamline the reservation process, and ensure a seamless experience for both you and your guests.
11. Implement a Stricter Cancellation Policy
Utilizing a well-structured cancellation policy can significantly impact revenue and improve profitability for your vacation rental. If your property consistently attracts bookings and maintains a high occupancy rate, it may be beneficial to consider implementing stricter cancellation policies. By doing so, you can reduce the likelihood of last-minute cancellations and minimize revenue loss.
When cancellations do occur, a strict policy allows you to retain a significant portion of the reservation value and provides an opportunity to rebook those dates and mitigate potential financial setbacks.
12. Sign-up for Affiliate Programs
Signing up for online affiliate programs is a smart strategy to enhance the guest experience while driving additional revenue for your vacation rental.
Here are some examples of reputable platforms you can partner with:
- Viator, you can offer your guests a wide range of curated tours and activities, while earning an 8% commission on any bookings they make within 30 days.
- Babyquip, you can provide your guests with convenient access to high-quality baby equipment rentals and earn a 10% commission on each rental made.
- Enterprise, you can partner with a rental car company and earn a 2.5% commission with a 180-day booking period.
These affiliate programs create a win-win situation, where you enhance the guest experience by offering valuable services while boosting your revenue through commission earnings. Leveraging Enso Connect’s software can streamline the affiliate program management process, making it easier to track and optimize your affiliate partnerships for maximum profitability.
13. Brand Your Vacation Rental
Branding your vacation rental can have significant advantages, transforming it from a mere 1 bed 1 bath condo into a distinct property with its own identity. By developing a brand around your vacation rental, you immediately enhance the guest experience, encourage repeat bookings, stand out from competitors, and increase the perceived value of your property. A well-crafted brand allows you to create a memorable and cohesive narrative that resonates with guests.
Investing in branding efforts, such as professional photography, an engaging website, and thoughtful guest communication, elevates the overall perception of your property and encourages guests to choose your vacation rental over others. Remember, branding goes beyond the physical aspects of your property and encompasses the emotions, experiences, and value that guests associate with their stay.
By using Enso Connect you can further improve the branding of your vacation rental by instantly creating a branded guest app that links to social media, your direct booking site, and displays your logo.
13. Consider Adding a Hot Tub
Adding a hot tub to a vacation rental can indeed be a revenue-boosting amenity, particularly in certain markets like ski resorts. While it may not generate significant returns in coastal units, in ski resort destinations, a hot tub is often a sought-after feature that can command higher rental rates and attract more bookings. The appeal of relaxing in a warm, soothing hot tub after a day of skiing can greatly enhance the guest experience and justify a premium price for your property.
14. Become Pet-Friendly
Properties that allow pets and are labeled as “pet-friendly” indeed have the potential to earn more revenue in the vacation rental market. This is due to the fact that one of the primary reasons people choose short-term rentals over hotels is the opportunity to bring their beloved pets along.
Unlike most hotels that have strict no-pet policies, allowing pets expands your target market and appeals to a wide range of travelers, from budget-conscious to luxury seekers. The demand for pet-friendly accommodations is significant, and catering to this niche market can lead to higher booking rates and increased revenue.
Airdna, the above is market research conducted for pet-friendly units
How Enso Connect Can Help
Streamline the management of your vacation rental and create a seamless experience for your guests. Enso Connect can help by personalizing and simplifying guest interactions at all stages of the customer journey. Take advantage of dozens of integrations to manage check-in, cleaning schedules, and communication while creating upsells to maximize your profits and enhance your guest’s experience. Learn more or book a demo today!