Are you concerned about the revenue decline from your vacation rental? If so, you’re certainly not alone. Outside factors like inflation, higher costs of living, and an ongoing global pandemic have caused issues for investors. These uncontrollable circumstances have resulted in more expensive operational costs that eat away at your profit. If things keep going this way, you may be forced to sell your property and get out of the business altogether.
Of course, no one wants to walk away from an investment property. However, sometimes it’s the only outcome when it becomes too expensive to maintain. Adding those costs to your booking rates could cause consumers to look elsewhere for a place to stay. The good news is there are ways you can maximize your revenue without deterring potential guests. Continue reading to learn more.
Dynamic pricing is an essential method that enables vacation property owners to offer flexible rates. Using data from the current market, owners can price their rentals based on things like the time of year, day of the week, or recent sales. For instance, you could charge more during national holidays, popular events, or weekends. As this is a typical strategy for the hospitality and tourism industry, it’s not something travelers will complain about. It also ensures that you’re charging the best possible rate to get the most return from your investment property.
If you want to get more bang for your buck, you must be willing to invest in your vacation rental. That includes making renovations. The right improvements can increase the property value and warrant higher rates for a better return. For instance, vacation rentals with swimming pools, home theaters, and spa-like bathrooms go for a higher rate. Travelers are willing to pay more for a rental with the creature comforts of home and amenities that make the trip more enjoyable.
Spruce Up The Living Space
Renovating a vacation home can be expensive. If it doesn’t fit into your budget, there are still things you can do to spruce up the living space. The more “luxury” a rental feels, the more guests are willing to pay. You can apply a fresh coat of paint, update the beds and linens, create a theme inspired by new decor, install a larger television, invest in high-quality kitchen appliances, and more to make the rental more attractive. Don’t forget to take photographs and add them to your advertisements as you make these improvements. Highlighting updates can attract renters faster.
Expand Your Audience
While most of your reservations come from travelers on vacation, they’re not the only demographic that needs short-term housing. If you want to get more for your vacation rental, you should expand your audience. Try targeting locals interested in a staycation, business travelers, first responders, and college students.
Encourage Longer Stays
Any booking is better than nothing, but the longer a guest stays, the more money you receive for the use of your vacation rental. So, why not encourage longer visits? Adding a promotion to the mix can make this easier. For instance, anyone that reserves a week or longer can save 10% on their nightly rate.
The more convenient a vacation rental is, the more consumers are willing to pay to stay. Adding some services to the list allows you to charge higher nightly rates. You could offer housekeeping or laundry services for an additional fee. Providing guests with meals or adult beverages is another option. If you have some wiggle room in the budget, you can include whatever you’d like ranging from full-body massages to pet care.
You invested in a vacation rental, hoping that it would generate extra cash. You didn’t account for the many economic changes that ultimately increased your out-of-pocket expenses. Rather than jacking up the price of your vacation rental and missing opportunities to earn money, use the strategies listed above to improve the property’s functionality, convenience, and value. When you invest time and money into these areas, you can get the biggest possible return.