Thanks to the local experience that vacation rentals offer, people are looking for vacation-home stays now more than ever. This is why many people have been able to turn their vacation rental side-hustle into a fully-fledged business. If done right, vacation rentals can give a great return and can provide a steady income. However, people often rely solely on reservations to bring in the cash, when there are so many other ways to generate extra revenue from your vacation rental business.
1. Optimise your prices
Getting the price of your vacation rental just right is truly an art form. Charge too little and you’re losing out on revenue, but charge too much and you’ll price yourself out of the market. There is a sweet spot between the two, but it changes yearly, seasonally and even daily sometimes. There are two ways to find the correct pricing for your property, manually or using dynamic pricing tools.
If you choose to optimise your pricing manually, you will need to do a lot of research. Looking at your competitors in the local area is crucial, and updating your prices constantly to factor in holidays, weekend rates, long and short stays and high-seasons is a must. However, this can be extremely frustrating and time-consuming, which as a busy property manager, is the last thing you want. This is where dynamic pricing comes in. If you’re looking to save time and generate extra revenue, the best way to optimise your prices is to use dynamic pricing tools. Your current PMS may feature dynamic pricing already, or you can opt for an external tool like Beyond Pricing. So, how does it work? Dynamic pricing uses an advanced algorithm, which analyses data from your vacancy rate, competitor rates and real-time market trends to generate nightly and weekly rates. Not only does using a tool like this help you save time, but it also bumps up your occupancy rate and can increase your vacation rental’s revenue by up to 40%.
2. Minimise costs, not quality
Making cuts to your amenities and lowering the quality of your guest’s experience is not the way to go when you’re trying to minimise costs. Instead, you need to find ways to maximise their experience and your savings. One of the quickest ways to do this is to check the ROI (return on investment) of your appliances. Are your guests actually using that outdoor hot tub that cost you around €60 a month to run? Are they calling people on the landline phone that costs €40 a month? Removing amenities that have a low ROI and replacing them with things such as smart heating and eco-friendly appliances can really help cut down your costs. For example, energy-saving bulbs and appliances can cut your usage by up to 50% and low-flow showerheads can cut your water usage by around 2,900 gallons (10,980 litres) each year. Plus, in today’s eco-focused market, travellers are looking for stays in properties that are more and more green.
The only problem with having smart appliances is that they can break down, and repairs can be costly. To avoid this, be sure to do regular routine maintenance of your vacation rental. Most property managers will spend more money maintaining their rental property than their own home as each new guest expects everything to be in tip-top condition. Maintaining and running regular checks on things such as the heating, air-conditioning, plumbing, major appliances and electric can weed out any small problems before they escalate into costly repairs or even replacements.
Another great way to minimise your vacation rental costs is by automating your processes. Automating your guest’s experience, from the moment they enquire about your property, until the time they check out is a fantastic way to save you time, and time is money. Things such as guest communication, self-check-in, transfers and luggage storage will give you more time to concentrate on generating more guest leads, more bookings and extra revenue.
3. Upsell by outsourcing guest experiences
One of the main reasons people travel is to experience new cities, foods and cultures. People are willing to pay good money for new and unique experiences, and you can provide that to them using outsourced partners. You can partner with local guides, restaurants, vendors, sport equipment renters, yoga studios or art classes. Not only will your guest’s experience be heightened, leading to better reviews, but you can also make extra revenue from commissions.
An easy way to upsell your guest is to partner with a luggage storage facility. If your guest is arriving early or has a late flight, they will need somewhere to keep their luggage so they can begin enjoying their vacation. Companies such as Stasher offer a safe place for your guest to store their luggage for a small fee.
Another fantastic way to generate extra revenue from upselling is to partner with a transfer company. One of the most stressful aspects of visiting a new city is figuring out which transportation to take and how to get to your vacation rental. You can cut out this stress for your guest while generating some cash for yourself from commissions. A trustworthy company that works worldwide is Welcome Pickups. They will collect your guest from the airport and let you know an accurate arrival time to your property. If your guests book with Welcome through your affiliate link, you will receive a commission for each transfer they take. Learn more about how you can generate extra income by using Welcome Pickups for your Vacation Rental transfers now.
With these simple steps, you should be making the most of your vacation rental business in no time. If you correctly implement these 3 tips, you can generate extra revenue equivalent to renting out four extra rooms per month, which can pay your property manager’s salary or a vacation for you.