Tips on How to Know Your Market for Your Vacation Rental
One of the key components in any form of real estate is knowing your market. For vacation rentals, knowing which channels are most effective for the homes you manage is the key to success. Bear in mind that certain distribution sources may be “hot” in some areas, while others may not produce. For instance, HomeAway can be of limited value in certain areas, like urban destinations, while Booking.com and Airbnb are big producers. This is different in every market and changes over time — so stay on top of your data! You should always be building your own SEO presence and testing PPC, social, and email marketing — these are channels for distribution too but take some time to build. The opportunity is there for you to tap into enormous marketing engines from day one and see your profits begin to soar quickly.
Understand Your Market
To establish which channels are most efficient, you can ask others in that market or with experience in the region, but ultimately you will need to test how your unique inventory reacts to different channels in your market. While some properties can be solely listed on VRBO or AirBNB and do just fine, we should always aim to do better. “Doing fine” simply does not work for us very long. We want as much exposure and leads as we can possibly get, so don’t worry about overdoing it — cast a broad net and track each lead source for production.
How to Figure Out What’s Dominant
There are two simple rules of thumb when determining which channels are the most dominant. First off, if you market in as many places as possible and use net rate contracts, you can maximize rates on each channel based on their lead volume and conversion rates and the costs will ultimately be borne by those guests. It might take some time to dial this in, but you can do it! Second, your data will show you what to do. If you notice that Booking.com is consistently killing it, focus on making tweaks there for a while. Increase rates, add fees, etc. until you see declines in activity, and then back it off. Always focus the most of your energy on maximizing your biggest producing channel. This does not mean to ignore the rest of the channels but build them over time. Most importantly, prioritize. You only have so much time and attention.
If you still feel stuck, reach out to us at Vacation Rental University. We can help you with our coaching and consulting programs. Do your homework and be diligent, and you’ll see results.