June 11, 2021

Vacation Rental Minimum Stay Strategy

How Vacation Rental Minimum Stay Requirements Undermine Your Revenue Strategy—and How to Fix It

Vacation rental minimum stay requirements are a mainstay of the short-term rental industry. They can even be a valuable tool in certain instances. Some vacation rental homeowners or property managers use them to give their cleaning and maintenance staff a little extra time between stays. Some cities or communities require minimum stays to qualify as a “vacation rental.”  

But relying upon minimum stay requirements to earn more money and keep occupancy high may do more harm than good—in ways that you may not even consider. When used in tandem with dynamic rates, vacation rental minimum stay requirements are a valuable part of your overall revenue and occupancy strategy. 

Why Minimum Stays Alone Don’t Work

When misused or relied upon too heavily to earn revenue, vacation rental minimum stay requirements can backfire. Here’s how: 

They Can Limit Your Audience

Vacation rental minimum stay requirements may limit the number of guests who see you in their searches, particularly on OTA sites like Vrbo and Airbnb. 

Here’s an example: A five- or a seven-night minimum on the Northern California Coast in the summertime works because that’s the type of vacation a guest to that region is probably taking. So a potential guest searching for a vacation rental in this region will most likely see this property in their top search rankings.

But let’s say that that minimum stay requirement lasts year-round. When guest behavior changes based on the season, this same property may be removed from the search results because its minimum stay doesn’t meet the guest’s search criteria.  

They Impact Your Search Rankings

OTA algorithms are very particular, and dings against your property listing can move it down in the search results quickly if the issues go unresolved. Your property listing might get dinged because it doesn’t show up in search results frequently enough. Worse still, a guest may choose your property’s listing, then bounce off the page to book another rental because the booking windows don’t align. The further the listing drops on the search results, the less likely you’ll be to receive any bookings at all. 

They Don’t Make You More Money

Some believe that the longer your vacation rental minimum stay is, the more likely you’ll hit your revenue and occupancy goals. But this can start to undermine your pricing strategy. Very few guests are interested (or can afford) to pay for an expensive vacation property with a seven-night minimum. 

Vacation rental minimum stay requirements filter demand. At a certain point, you’ll have to choose between having high rates and low minimum stays or higher minimum stay requirements at lower rates. 

Make Minimum Stays Work to Your Advantage

The more flexible you can be with your vacation rental minimum stay requirements, the more likely you are to make decent money, meet your occupancy goals, and appeal to a broader range of guests. Here are a few ways to make minimum stays work to your advantage. 

Make the Minimum Stays Match Your Market

Your minimum stays should make sense with your rental market. If you align them with your peak season and with the premium days of the week, you’re most likely to appeal to the right audience. 

For example, vacation rentals in Hawaii should have a pretty high minimum stay requirement during peak season because families often plan big, long trips to Hawaii several months or even a year in advance. Guests are willing to book a rental for longer in that instance. But a vacation rental in Boston or Seattle may need a shorter minimum stay because guests are more likely to pop up just for a night or two for a big event or work—a seven-night minimum won’t appeal to this audience. 

Push Behavior With Rates, Not Minimum Stays

Industry experts and homeowners alike often believe that vacation rental minimum stay requirements force guests to stay longer than they would have otherwise. And while this is true, it is an artificial behavior and will likely only appeal to a small audience. But, if you can be flexible with your minimum stay requirements and dynamic in your rates, you may see guests choose to stay longer—and make more money in the process.

Here’s an example: Let’s say you have a five-night minimum stay requirement at $100 a night. You’ve made $500 on one stay. Not bad. Now, let’s say you decrease the minimum stay to three nights, increase the more popular days to $150, and bookend those popular days with $75 a night. A guest may be more inclined to throw in an extra night or two at a price like that, and a similar five-night stay with this strategy could make you $600. 

Don’t Be Afraid to Drop Minimum Stays Last Minute

Adjusting your minimum stay requirements on the fly can increase occupancy, especially for travelers looking for a last-minute vacation rental. This strategy can be particularly effective around popular holidays, like Memorial Day or Fourth of July in the U.S.

For example: Let’s say that the typical booking window for the Fourth of July is four weeks out. You set your vacation rental minimum stay at four nights. If booking seems to have hit a lull two weeks out from the holiday, dropping the minimum stay requirement to two nights and increasing the rates will open the properties up to more views and potentially get you a few more bookings. 

Ask for Expert Guidance

Having a vacation rental revenue management expert like Rented on your side can be very helpful in this instance. Rented’s Art system provides powerful insights into the market so you can adjust your rates and minimum stay requirements accordingly—and in bulk! And with the full-service offering, a team of experts can assist in making any changes for you.

When used strategically and flexibly, vacation rental minimum stay requirements can boost occupancy levels and provide regular bouts of revenue. Reach out to Rented today for a consultation to learn how to make minimum stays work for your vacation rental. 

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