Whether you’re looking for the perfect vacation home to buy, or you’re looking to increase ROI on the second home you currently own, one thing that’s always on any rental owner’s mind is how to boost bookings.
After 13 years working in the vacation rental industry, I often get questions about how to make a rental property as profitable as possible. Often, the advice I offer is surprising to people because it flies in the face of what you usually hear in the vacation rental space.
Here are as many tips as I could pack into one article for maximizing your vacation rental’s profit potential.
Tip 1: Reconsider Your Occupancy and Audience
When looking at vacation rentals, most everyone targets vacationing families or a small crowd of business travelers, meaning a one to five bed/bath home.
When you buy in that size range, two things happen:
- You are a commodity product for which potential renters are just shopping for the lowest price.
- Your income potential is only in peak vacation season, which is 90 to 120 days a year.
When you buy a six to 12+ bed/bath home, you have a whole new window of opportunity. You are now only competing with 1.49% of the vacation rental market. And, your income potential is 365 days a year because you attract:
- Vacation peak-season travelers. According to Homeaway.com and Cvent, 17% of the $85 billion vacation rental market is made up of groups of seven or more people.
- Family reunions
- Sports teams
- Organization events
- Adult group getaways
- Business travel for retreats, events, and meetings.
- Business travel is a $1.2 trillion global market and demand for business executive conference rooms is growing at 7.3% per year, according to IACC.
Tip 2: Offer top-rated amenities and design.
The stats from TripAdvisor below show which amenities and design factors are important to vacation renters when choosing a rental to book.
Of U.S travelers who have stayed at a vacation rental, 54% say they’ve had an excellent experience. Travelers indicate that the main reasons they stay at a rental include:
- They read or learned about the home’s amenities and value (49%).
- They needed adequate space for their group (45%).
- They sought an “at-home experience” (41%).
Key features that motivated travelers to book a rental home include:
- The kitchen (26%)
- A beautiful view (21%)
- A private pool (9%)
- A washer and dryer, and Wi-Fi (tied) (7%)
These amenities and design considerations give a great starting point for evaluating where you can improve your home or for choosing a home to purchase.
Tip 3: Brand your property.
One of the most interesting studies I found recently is one completed by PhoCusWright®, initiated by Wyndham®, that showed the importance of branding a vacation rental to boost bookings.
PhoCusWright surveyed 2,000 travelers who were 25 years and older who traveled overnight for leisure and stayed in paid accommodations. All respondents had:
- Taken at least one trip for leisure in the past 12 months and paid for lodging.
- Actively planned their leisure trips in the past 12 months.
The research found that four in 10 vacation rental guests and 86% of non-vacation rental guests would be more likely to rent a branded vacation rental. So branding is key to boosting bookings at your vacation home.
The proof is in the pudding!
Across the entire world, there are only 2,200 homes that have most of what I suggest above, according to Homeaway.com.
Let’s take a look at some reviews of a home that fits the bill based on the recommendations from above. This home is a 14-bed/bath mega-mansion in Lake Tahoe:
Image from VRBO.
“Perfect corporate retreat site!”
- “We rented this home for a week long corporate retreat, and it was absolutely perfect. The house is very thoughtfully constructed and appointed … we were impressed every step of the way. A few perks:
- 1) For our work team, we still all had plenty of space and privacy. Several great spaces for large and small meetings.
- 2) The kitchen was stocked with just about everything you could want … it even had a Nutri-Ninja! You literally just need to show up with your food and EVERYTHING you could need for cooking and prep and serving is there.
- 3) Every little construction detail was beautiful … way more like a custom home than a rental property. The best part was that, despite being three floors, the floors are solid and don't echo or cause a ton of noise. For having 20 people in the house, I never was kept awake by my co-workers.
- 4) There was just SO MUCH TO DO in the home, we didn't even need to leave! Pool, skeeball, poker, swimming, two spas, movies … too much to list.
- 5) Great location with a gorgeous meadow behind with walking trails. Plus, the home is a short walk to Safeway and CVS and the main drag through SLT. But still feels quiet and secluded.
- This space would be fantastic for a large family but it's also PERFECT for a small business retreat as well. We plan on renting this property again.”
-- Submitted: Oct 28, 2016; Stayed: October 2016; Source: VRBO, from HomeAway
“The cabin is exactly as it was described …”
- “We had a great stay at this insane massive estate. The place is very quiet as there aren’t neighbors too close. Casinos, lake, and downtown are all within a mile. House was appointed with very high-end appliances and fixtures ... We stayed here with a corporate group of 32 people and never felt crowded. I want to have a family reunion here soon ... We will definitely stay here if we visit Lake Tahoe again.”
-- Submitted: June 14, 2016; Stayed: June 2016; Source: VRBO, from HomeAway
Now look at the bookings for homes across the nation that fit our recommendations over the next six months:
- This Utah 13-bed/nine-bath home is booked solid. This six-bed/bath home in Tennessee is killing it.
- So is this eight-bed/bath home in Tennessee.
- And this eight-bed/six-bath home in Nevada? Also killing it.
- This Colorado home with eight beds and six baths is booked solid for months.
Built, Zoned, Branded, and Managed for Success
At Bevy | Group Vacation Rentals™, we work with investors, guests, cities, and developers to build legally zoned vacation rental communities that are branded and franchised. These communities are designed for leisure and business, and fit the needs of every city and every budget.
Once the rental community is created, maximizing bookings and ROI lies in the owner’s hands. Often, the best way to realize your vacation rental’s true potential, especially when you have a high-occupancy home like I suggest above, is to work with a professional property management firm who can oversee everything from booking to marketing to maintenance. You can start your search for the perfect property manager today by creating a free profile on Rented.com. Many of the property managers Rented.com works with use a guaranteed income model, so you receive the same monthly income regardless of bookings. Sign up today to get started.
Tristan Webb is a 17-year veteran in the vacation industry, with the past 13 years focused in the vacation rental industry. He served for five years on the board of the Vacation Rental Managers Association over governmental relations and helped cities all over the world work in harmony with vacation rental regulation and compliance. He also built and sold one of the largest vacation rental property management companies in Utah.
Lead image: Flickr CC user Brando.n