If the current economic climate and market trends have you wondering how to increase bookings on Airbnb, VRBO, etc., then you are in the right place. A huge boost in vacation rental supply in most markets coupled with a volatile economy can make it seem impossible to know how to get your vacation rental business on track. However, with the right strategies boosting your booking numbers and maximizing your profits is achievable.
With some creative thinking and smart planning, you can become a successful short-term rental host and turn your property into a profitable venture. Here’s how.
1. Expertly Price for Events in Your Market
Pricing events in your market is no simple challenge but are vital to track and manage. On top of just knowing that a local event is happening in your market, you need to know if and how it is actually affecting demand for your listing. Understanding demand is key and will allow you to optimize your pricing strategy and earn more revenue. You can easily spend hours of time tracking down each event, analyzing market trends, etc. However, leaning on the right solution and automation will save you time and lead you to success.
At Beyond, we spend a ton of time tracking and monitoring events so our customers don’t have to. Our Data Science Team is constantly improving our dynamic pricing algorithm to ensure our customers’ properties are optimized for bookings and revenue.
2. Adjust Your Strategy For Supply Increases
It’s no secret that more and more vacation rentals are in business today than ever before (have you seen how easy Airbnb makes it for hosts to get started?). We checked our data, and we saw that:
1. Airbnb usage has grown over time: Of reservations arriving in November 2022, 52.9% were from Airbnb, up from 43.5% in 2020 and 51.2% in 2021. This tells us that Airbnb as a booking channel is still popular and growing among guests.
2. Supply of Airbnb rentals has continued to increase: through the COVID-19 rebound, and even accelerate. Throughout 2022, supply has increased by around 8% quarter over quarter.
With this in mind, it’s imperative that your rental is competitive and stands out from the competition. Knowing your market, seasonality, and search data are more important today than ever. What is a highly searched amenity that isn't offered by many guests? What is the average night stay, and are you allowing those? Make sure you use a tool to understand this and optimize your listing based on it – just take a look at a recent example from the Super Bowl.
3. Evaluate Your Fee Strategy
Competitive pricing can help to drive more bookings and conversion rates, and one way you can improve your pricing is to evaluate your fees. Switching to a more transparent, all-in type of pricing might greatly benefit your rental. For example, is there a way you can roll in your cleaning fee to your nightly rate?
This is especially important for those who list their vacation rentals on Airbnb. The platform now shows all-in prices on the search page – instead of simply showing the nightly rate. This new change means that guests are clear about the total price earlier in their booking journey, so relying on a lower nightly rate to entice potential guests is not your best bet. Ensuring that your all-in cost (including fees) is appropriately priced is crucial to winning over new guests.
4. Plan For the Current Economic Climate
With inflation still at high levels and a possible recession on the horizon, your short-term rental strategy needs to be updated appropriately. Navigating a recession as a short-term rental host can be challenging, but it's not impossible. Taking proactive steps, such as adjusting prices and offering discounts for longer stays, will help you remain competitive in the market and attract more guests.
Additionally, staying up to date on trends in the industry will help you keep your business afloat during difficult times. Finally, investing in marketing strategies such as digital advertising and social media campaigns will ensure that potential customers know about your property and its offerings. With these tips in mind, any short-term rental host can manage their business through an economic downturn successfully.
5. Stand Out On the OTAs
Love ‘em or hate ‘em, online travel agencies (OTA), like Airbnb, VRBO, and Booking.com, are crucial for your business due to their popularity with guests. Case in point: Airbnb is a preferred booking channel for most guests. Here are our best tips for standing out – no matter which OTA drives the most bookings for your business:
- Professional photos: It is so important to present your space in the best light to potential guests. If you spend the time to prepare your space and get it ready, don't skimp on this step as it's a major one.
- Curating an intentional space: In today's crowded market, hosts need to get more creative with their spaces and cater to different types of travelers. Think about how you can be unique, stand out, and create an environment for your guests.
- Consider a listing video: Vrbo now allows you to include a video link in your listing, so this is a great way to show off your space. Photographers/videographers can do some pretty amazing things with video and can show your unit in a light that photos just can not.
6. Check Your Base Price
Beyond will automatically adjust your pricing daily for you, but it’s important for Beyond users to monitor their Base Price and adjust it as needed.
Maybe you’ve added a hot tub, bookings are rolling in, and it’s time to increase your Base Price. Or maybe your neighbor added a hot tub, didn’t increase their prices, your bookings have slowed down and it’s time to decrease your Base Price. Your Health Score will give the best indication of when it’s time to change your Base Price, so log in to your account here and check it out!
Beyond is here to help
With the ups and downs of the market, we know it’s difficult to keep up and know how your business needs to respond. At Beyond, we aim to be your best partner in revenue management strategy, helping you make the best decisions for your business. Our team and our platform work together to help you take the right action. Read more about how Beyond works for you.
Not using Beyond or new to dynamic pricing? Sign up to see what Beyond can do for your business.