As a vacation rental property manager, your most important relationship is with your owners. With the ups and downs of the travel industry over the last few years, plus the cloudy economic forecasts for 2023, there are new ways to strengthen those relationships, drive positive outcomes, and optimize revenues.
With thousands of customers, we understand the critical importance of keeping pace with today’s evolving market dynamics. Retaining an existing owner costs far less than acquiring a new one, so your efforts in keeping them informed and up to date are worth the time and investment (although there are definitely opportunities for acquisition this year). Owners seeking reassurance and guidance will appreciate a well-organized and realistic approach to setting revenue and occupancy expectations.
To help you manage and strengthen the relationships with your vacation property owners in 2023, we have boiled down some key areas to focus on.
Put Extra Focus on Retention
Your business relies on client retention. By proactively talking to your owners, you may significantly reduce the possibility of an owner turning their back on you and the short-term rental market. Acquiring new homeowners definitely has a place in your short-term rental business strategy, but keeping your owners happy and on your roster is the key to your continued success in 2023.
Consider these facts:
- The average cost to acquire a customer (CAC) in our industry ranges from $750 – $5,000.
- A 5% increase in customer retention can increase company revenue by 25-95%.
Show Your Owners Data and Insights from Your Revenue Management Strategy
In these times of growing inflation and ever-changing demand for travel, proactively sharing key vacation rental data and analysis with owners is more important than ever. Getting ahead of any worries or concerns from your owners is essential to remind them that their properties are in the best hands.
Sharing the right metrics and information will go a long way in engaging with and strengthening your relationships with owners, which all adds up to stronger owner retention. In addition to sharing the basics, sharing just a few more metrics and analyses is crucial to helping them understand how their properties are performing. Consider sharing these insights:
- RevPAN (revenue per available night)
- Market data and insights (ex. Compare your occupancy rates to your market average)
- Have you had a stellar booking lately? Explain how you were able to score this booking and how you can replicate this in the future.
- Share the status of upcoming vacancies & lead times, what they can expect, reassurances of occupancy rates, and how you determine (and hold out for) the best market rate.
- Review your pricing strategy with your owners too, specifically taking a look at your minimum prices. Focus on ensuring that minimums aren't limiting performance, and even consider creating seasonal minimums where they may be helpful (ex: allow the rate to fluctuate lower in the shoulder season to chase occupancy while still protecting your high season rates).
Manage Your Owners’ Expectations
Likely, 2023 will not yield the same stellar and outstanding results as the pandemic and recovery years, so it’s important to get on the same page with your owners.
Share your strategy for tackling inflation, lower demand, increased competition, and everything else that comes with economic uncertainty with owners to get ahead of any worries or concerns. This will go a long way in engaging with and strengthening your relationships with owners. And if you can get ahead and manage your owners’ expectations in advance, explaining any drop in demand or helpful rate decreases will be much easier.
What to Say When Demand is Low
Focus on occupancy: When demand is low, you want to ensure you are getting your fair share of bookings. Consider shifting your revenue management strategy to focusing on maximizing occupancy.
A realistic, occupancy-based revenue strategy will help to ease owners' worries by capturing revenue to cover their fixed costs, such as mortgages and upkeep. We do not recommend setting your prices too low or lowering your standards when accepting new reservations. Every booking should still be profitable and be up to your standards.
Find New Opportunities for Growth
Keep in mind that with inflation and a possible recession, more and more people will be looking to earn extra income by renting out their second home (did you know that Airbnb was founded during a recession?). Plus throughout 2022, the supply of Airbnbs increased by around 8% quarter over quarter in the U.S. Keep an eye out for potential new owners, and find ways in your community to reach them.
On the flip side, keep an eye on vacation rentals in your area. In addition to helping you to make better pricing decisions, Insights from Beyond allows you to easily see how neighboring units are performing. Once you spot a property underperforming, all you have to do is approach that owner and let the results speak for themselves.
Beyond is here to help
It is important to communicate and demonstrate to your owners the value you bring to them and their properties. Using Beyond to help show market data, demand trends, and the other tactics you are implementing will strengthen the quality of your owner communications, and build trust. Get our best-in-class data at your fingertips today!