Are you building a vacation rental business that will last?
‘’ If Airbnb stopped supporting me with guests today – could my business survive? ‘’
This is a question that property managers have been asking themselves for years. If Airbnb changed their rules, raised their prices, or regulation forced a change to my model, could I survive?
Being dependent on one portal is a well-known pitfall of property management businesses. If your business is reliant on one company for bookings, you’re building a castle on sand. The more you grow, the more susceptible you are to minor changes causing a major collapse.
The frequently cited response to this problem is to do more and more to drive guests to book with you directly. Cut out all the portals directly.
Trying to cut your reliance on portals for your bookings is admirable, but a perhaps short-sighted strategy.
If you change your strategy to base your business around direct bookings, you are competing against the reach of billion dollar companies. They can have global campaigns pumped into every TV in the known universe before you have your first flyer printed. The battle for the bookings is already over. Major online travel agents already dominate the vacation rental industry.
But, the good news is that you don’t have to beat them.
In order to reduce your direct reliance on one company, the first step is to diversify your business across 4-5 major portals and your own website. Major OTAs provide such a strong stream of guests for property managers that it makes no sense to try to out-market them. By listing on all of the major portals and having a source of direct bookings, you are already reducing your reliance and increasing your independence.
The question vacation rental managers should be asking themselves now is: ‘When my guests book their next trip, will they remember my business or Airbnb?’
The challenge for property managers now is to add value to their business model. Whilst the battle for the booking is done, the next battle will be fought for control of the guest experience. Airbnb has already launched ‘Trips’. They want guests to remember them for the property they stayed in and the experience they had while on their vacation. Eventually, they want your great hosting skills to be considered just part of the ‘Airbnb experience’.
What can property managers do to make sure that they provide an experience that separates them from being a product on an OTA’s shelf? How can you then make your business resonate with your guests more than the portal that they booked on?
Think of this use case from vacation rental expert Matt Landau. He talks about what made a recent vacation rental special for him and why he remembers the business :
But prior to arrival, the managers of the vacation rental I am staying in asked what I was passionate about.
I said, “I love outdoor adventure.”
They then connected me with Patrick, a high-school teacher who loves hiking and running in the Hawaiian mountainside.They connected me with Kelly, a former surf pro who runs his own stand-up-paddle (SUP) company.And they connected me with Blake, their friend who loves taking visitors out for open water swims.
One Superstrength of independent vacation rental owners and managers is our intimate understanding of (and appreciation for) our destinations. Curating our guest’s experience costs nothing. But it adds a disproportionate amount of value to their stay.
The local knowledge and the homegrown network of experiences made this stay memorable. The property then becomes more than just accommodation. The property manager was responsible for these unique experiences for their guest. The business and brand leave with the customer and will allow your brand to grow.
In addition to diversifying and adding value, to make your business stronger and independent your business needs to be supported by more solid foundations. Major OTAs should then only serve as a funnel to provide customers. You then need to have a solid, established business, and a sales and marketing strategy to turn bookings into customers.
We’ve broken down the biggest steps to creating a stable vacation rental business:
- Your relationship with your guests
A community of loyal customers provides more value than just their bookings. Their word of mouth spreads your business to new guests. They leave the highest quality of reviews and become ambassadors for your brand. They also help set expectations of a new standard in vacation rentals as more people seek out professionally managed stays.
- Your relationship with your owners
Why do property owners choose to entrust their asset with you, rather than listing directly? Learn how to provide a better alternative for property owners.
- Your branding and marketing strategy
Every guest that stays with you is a chance to make your brand stronger. Exceed your guests’ expectations and give them the motivation to return to your brand directly.
- Your Local Network
Link your business with local service providers. You can generate revenue through affiliate or referral programs and establish your business as a local fixture.
- Digital Assets
Your brand will require a website, adverts, emails, blogs, and more. Keep records of your marketing campaigns and materials. Your digital assets are crucial to establishing your own brand.
- Unique Selling Point
Whether it’s local knowledge, specialty tourism, unique experiences, the best vacation rental management businesses offer something unique.
Think of these elements as foundations of your business.
The stronger the basic structure is, the more likely your business is able to survive unforeseen changes and shifts in the industry.
Having detailed business processes, documentation and a structure to build and scale means your business is never reliant on one element. Portals and third party companies then become nothing more than suppliers and resources to you.
Vreasy wants to help all vacation rental managers build their enterprises into stable and valuable companies. We help managers turn their listings into an independent and sustainable business model. A business model that can grow and adapt to changes in the industry.
The first step is diversifying your lead sources. To connect your business to every major portal speak to one of our team for a free consultation.
Look out for the next post in our series on building your business!