Increasing the profitability of a vacation rental management company rarely calls for drastic measures. A few small changes to some key areas of your business can deliver much better results than cutting back on important services, like housekeeping and maintenance, increasing your nightly rates to a level that may chase away potential guests, or laying off employees.
Delivering a less-than-perfect guest experience and/or considerably increasing your nightly rates will inevitably translate into fewer bookings over time. This means lower revenue and profit margins not only for your company, but also for the property owners you represent. Needless to say, you may lose some of the property owners you represent, which can have an immense impact on your business.
Amid the new influx of vacation rentals into the market and rising prices due to inflation, the vacation rental strategies you’ll choose for your vacation rental management company can make the difference between fattening up your bottom line and losing both guests and property owners. To help you increase your company’s profit margins and avoid the other alternative, here are some key strategies you should consider.
Encourage Direct Bookings
One of the best ways to maximize your profit is to ensure that more guests book directly with you. To begin with, direct bookings will lower your overall OTA commission, with a positive impact on the profitability of your company. The easiest way to encourage direct bookings is to offer different incentives exclusive to direct bookers.
In addition, you can use a dynamic pricing tool, which allows you to offer your guests the best possible nightly rates. Since this tool can reduce your nightly rates to an amount corresponding to the lowest rates in the area at the time of booking, you can use it to strategize different Best Price Guarantee offers. At the same time, dynamic pricing tools are specifically developed to help vacation rental management companies maximize their profits. As a result, most tools allow users to set rate limits, so they never go below the preset values. That means you won’t leave money on the table or lose profits as long as you set up the system correctly.
Our advanced vacation rental software solution includes a built-in seasonality pricing tool, which is free to use, and dynamic pricing functionality available at an additional cost. Both of these solutions can help you increase your profit margins by offering travelers competitive prices based on changing demand.
Upsell and Cross-Sell
Most travelers who book a vacation rental want more than just a place to stay. They want a different, truly authentic experience instead of a life similar to their own, but in a different location. The easiest way to offer your guests the opportunity to enhance their stay is to upsell and cross-sell different services and products. When done right, upselling and cross-selling also allow you to earn more money from each booking without increasing your rates.
Optimize Your Website for Voice Search
When it comes to vacation rental management, one essential aspect to consider relates to behavior changes. With this in mind, Millennials and Gen Zers are no longer the only ones who love technology. Since 2012, there’s been significant growth in tech adoption among older generations, like Gen Xers and Baby Boomers. Given the growing popularity of tech solutions, the fact that hospitality businesses are increasingly adopting smart technologies comes as no surprise.
One of the most popular technologies right now is voice search. To respond to this change in search behavior, you should consider structuring your website’s content to make sure that it appears in voice search results as well. In short, optimizing your website for voice search will help you attract more prospects and also create brand visibility, which can generate more business in the future.
Invest in Automation and Technology
More importantly, you should select a vacation rental management software solution that enables you to automate many different tasks and connect all of your business areas, from notifications, instant messages, and loyalty programs to payments and accounting processes. The best solutions available today also come integrated with smart home controls that not only make possible self check-ins and check-outs, but also allow property managers and owners to control the air conditioning and heating systems, lighting, and different appliances from their devices.
If you already use a top-notch vacation rental software solution, you may want to consider going one step further. Why? Maybe because some of your competitors are already using more advanced technologies that may offer guests better experiences. As an example, some hotels have already adopted voice assistant technologies that guests can use to get answers to their questions and control different devices within their rooms.
Since hotels typically set the standards across the hospitality industry, keeping up with the latest industry trends will give you the best possible chance of offering the kind of experience modern travelers have come to expect.
The best vacation rental management companies out there are constantly evolving. Not only do their success and profitability depend on their ability to innovate and deliver greater value to guests and property owners; their own survival depends on how they adapt to changing market conditions and consumer behavior. While this often involves the development and implementation of new business strategies and processes that make possible the adoption of more advanced technologies, it’s the only way your vacation rental management company can gain a clear competitive advantage over its rivals. To discover the benefits of tapping into the power of advanced vacation rental management software solutions, contact JANIIS today!