As a vacation rental property manager, losing an owner can be detrimental to your business. And in this economy, retaining homeowners is more important than ever.
It is essential to ensure owners are staying with you in order to maintain market share and business growth. When homeowners decide to leave your company, you not only lose revenue but also miss out on future opportunities. Let’s take a closer look at why this happens and what you can do about it.
How Losing an Owner Will Impact Your Business
Lost Revenue & Business Decline
It goes without saying: when you lose a homeowner, you also lose revenue from their rental properties. This means there is an immediate decline in income from that one customer alone, which could have an adverse effect on your overall revenue if the customer had multiple homes.
More than just lost revenue, however, when owners leave they will take their referrals with them as well–meaning even more potential lost revenue in the future.
Your Loss = Competitor Gain
When a homeowner decides to move away from your vacation rental management service, they may choose to switch over to one of your competitors instead. Not only will you experience the immediate loss of revenue mentioned above, but now your competitor has gained access to that customer’s network as well – furthering their market share and leaving you less competitive than before. You could also miss out on future opportunities if those same homeowners refer their networks to the competitor instead of back to you over time.
Solely Focusing on Acquisition Will Cost You
Adding a new owner/property to your business delivers value, but focusing solely on acquisition may cost your business greatly in the long run. Consider these facts:
- The average cost to acquire a customer (CAC) in our industry ranges from $750 – $5,000. This includes everything from marketing and advertising to sales and referrals and more. These costs add up quickly and could be significant.
- On the flip side, a 5% increase in customer retention can increase company revenue by at least 25%
How the Right Revenue Management Solution Helps with Retention
It is critical that vacation rental property managers focus on retention strategies in order to keep existing customers and avoid any loss of market share or missed opportunities down the road. A revenue management platform that automates the right actions, provides actionable data to drive greater revenue, and guidance around best practices will help you keep owners happy. Here’s what to look for in a revenue management solution:
Look for a revenue management partner that is proven to make you more successful. After all, more revenue plus higher occupancy levels equal happier owners. Compared to other revenue management platforms, Beyond customers:
- Increase their average daily rates (ADRs) by 5%
- Upp their occupancy levels by 2%
- Grow their revenue per available night (RevPAN) by 7%
Ensure that your revenue management solution allows you to stay up-to-date on industry trends so that you can consistently communicate these insights to your owners. You should have easy access to data about your market & competitors, demand-side data, historical booking trends, and insights into your portfolio. Sharing data like this with owners will instill confidence in your skills & expertise.
Find a vendor that has proven success with a variety of enterprise, small, and midsize businesses to ensure you are supported in maintaining great owner relationships. With the right solution, you should consistently be attaining optimal occupancy levels and revenue, which keep owners happy and on your roster.
Look out for red flags. When choosing your revenue management platform, look out for red flags, like limited integrations, reliance on too many manual controls, and a one-size-fits-all approach.
Be wary of flat-fee providers. While $10 per listing sounds like an incredible deal, we’ve seen that these types of providers actually cost property managers in the long run. Unlike revenue-share pricing, flat fees provide zero incentive for the pricing provider to work in your best interest. They collect those fees no matter what — even while generating missed revenue opportunities that frustrate you and your owners.
Beyond is Here to Help
Retaining existing homeowners should be at the top of every vacation rental property manager’s list. It is essential that managers implement strategies to ensure that existing owners remain happy and keep coming back year after year!
At Beyond, we are constantly evaluating our product and service offerings to ensure we’re the best partner for our customers to help them make more money with their vacation rental business. As the pioneers in revenue management for short-term rentals, we offer business-enhancing solutions for property managers of all sizes across the globe to future-proof and grow their businesses. Want to learn more? Let’s chat!