How to maximize the return on your vacation rentals

In 2024, the vacation rental industry is more competitive than ever for property managers and Airbnb hosts. Guest and property owner expectations continue to rise as the industry matures, creating even more pressure for your services to stand out.

In this article, we’ll explain key factors that impact your vacation rental revenue and guest experience and explore how you can maximize both. By implementing these strategies, you can enhance your property's appeal, increase bookings, and ultimately boost profitability.

Engage your target audience with specialized amenities

One of the most effective ways to attract and retain guests is by offering specialized amenities that cater to their unique needs. Featuring these amenities in your listing will help attract the right audience and create a great first impression.

According to Airbnb, 97% of US travelers surveyed say amenities impact their travel experience. Therefore, understanding your target audience and tailoring your offerings to meet their needs can significantly enhance their stay and encourage both repeat bookings and referrals.

Here are a few common guest types and the potential amenities they could be looking for at their short-term rentals: they look for can differ:

• Family Travelers: Families often look for rental homes that provide convenience and comfort. Consider offering amenities such as cribs, high chairs, children’s books and toys, and safety features like outlet covers and baby gates.
  
• Business Travelers: Business travelers value properties that offer work-friendly features. High-speed Wi-Fi, dedicated workspaces, and early check-in/late check-out options can make your property more appealing to this segment.
  
• Pet Owners: Pet-friendly amenities can attract a growing number of renters who prefer to bring their pets along. According to KeyData, During 2022, pet-friendly vacation rentals had a 6% higher paid occupancy rate than rentals that don’t allow pets, and the average daily rate for pet-friendly rentals in the U.S. was 9% higher than non-pet-friendly rentals. To make your property more accommodating, offer pet beds, bowls, and a designated pet area.
  
• Luxury Seekers: Upscale amenities such as hot tubs, gourmet kitchens, high-end toiletries, and concierge services can attract guests looking for a premium experience.
  

By providing amenities that cater to your target audience, you can create a memorable experience that sets your property apart from the competition.

Pricing and revenue management strategies

Effective pricing and revenue management strategies are crucial for maximizing your return on investment. Key concepts such as occupancy rates, pricing events, and dynamic pricing play a significant role in optimizing your vacation rental business revenue.

• Occupancy Rates: Understanding your property's occupancy rates helps you identify patterns and market trends. Use this data to adjust your pricing strategy during peak and off-peak seasons.
  
• Pricing Events: Keep an eye on local events and adjust your pricing accordingly. Events such as festivals, conferences, and holidays can significantly impact demand, allowing you to increase your nightly rates and maximize revenue.
• Dynamic Pricing: Adding a dynamic pricing tool to your tech stack allows you to adjust your rental rates based on real-time market demand. This strategy helps you stay competitive and ensures you are not leaving money on the table.

Revenue management is essential because it helps you make informed decisions about your pricing strategy, leading to higher occupancy rates and increased revenue.

Distribution strategies

Expanding your distribution channels is another effective way to increase bookings and profitability. While major booking platforms like Airbnb, Vrbo, and Booking.com are essential, niche booking sites and utilizing channel managers can further enhance your reach.

Effective pricing and revenue management strategies are crucial for maximizing your return on investment. Key concepts such as occupancy rates, pricing events, and dynamic pricing play a significant role in optimizing your vacation rental business revenue.

• Niche Booking Sites: Consider listing your property on niche booking sites that cater to specific audiences. For example, Plum Guide targets luxury travelers, while Kid & Coe focuses on family-friendly accommodations.
  
• Channel Managers: Using a channel manager allows you to manage multiple listings across different platforms from a single dashboard. This tool helps you avoid double bookings, keep your availability up-to-date, and reach a broader audience.

By diversifying your distribution channels, you can tap into new markets and increase your property's visibility, leading to more bookings and higher revenue.

Upselling strategies

Upselling is an effective way to increase your revenue per booking. By offering add-on services and experiences, you can enhance the guest experience and boost your profitability.

With Breezeway Upsells, you can seamlessly offer personalized services and experiences to your guests, all from within the Breezeway platform.

• Add-On Services: Consider offering services such as airport transfers, guided tours, grocery delivery, and housekeeping. These service upgrades not only provide convenience to your guests but also generate additional cash flow.
  
• Local Partnerships: Partner with local businesses in your vacation rental market to offer exclusive deals and experiences to your guests. Collaborations with local restaurants, tour operators, and attraction providers are great co-marketing strategies that can enhance the guest experience and provide additional revenue streams.

By implementing these upselling strategies, you can increase your average booking value and enhance the overall guest experience.

Gap night revenue

When there is a short gap between vacation rental reservations, the property will likely remain vacant, resulting in a 'Gap Night'. With Breezeway gap night messaging, our dashboard pulls reservation information from your PMS system to automatically identify every gap night opportunity, so you can offer extended stays to departure and arrival guests.

• Gap Night Messaging: By sending targeted messages to guests, you can offer discounts for gap nights, encouraging longer stays that increase your occupancy and revenue. According to our 2024 ROI Report, 73% of clients drive over $1,000 in monthly revenue with Breezeway’s gap night messaging feature.

Instead of losing out on that revenue, Breezeway’s gap night messaging feature is a powerful guest communication tool that helps you fill unbooked nights between reservations. You'll drive more value for your clients, and generate additional service revenue.

Direct booking strategies

Encouraging direct bookings can significantly improve your profitability by reducing commission fees paid to third-party booking platforms. Here are some strategies to increase direct bookings:

• User-Friendly Website: Ensure your website is easy to navigate, mobile-friendly, and optimized for search engines. A user-friendly website with professional photos can attract more direct bookings.
• Special Offers: Offer exclusive discounts and promotions for guests who book directly through your website. These incentives can encourage guests to bypass third-party platforms.
• Loyalty Programs: Implement a loyalty program to reward repeat guests. Offer perks such as discounted rates, early check-in, and late check-out to encourage repeat bookings.
• Social Media: Utilize social media platforms to promote your property and drive direct bookings. Share engaging content, highlight positive reviews, and run targeted advertising campaigns to reach potential guests.

By focusing on direct bookings, you can reduce your reliance on third-party platforms and increase your profitability.

Optimize operations with automation

Balancing operating costs while delivering exceptional guest experiences can be a delicate balance for rental property managers. Automating your operations can save you time and money, ultimately increasing your profitability without compromising the guest experience.

Breezeway’s platform offers a range of tools designed to optimize your property management processes, creating more room for growth. In fact, with these time savings, 80% of clients say Breezeway helps them grow to manage more properties.

• Task Management: Breezeway has seamless integrations with leading property management systems (PMS) to automate task scheduling based on reservation data. Automate task scheduling and assignment to ensure that cleaning, maintenance, and inspections are completed efficiently. This reduces the risk of errors and ensures a high standard of service.
• Communication: Use Breezeway’s automated guest messaging to communicate with guests before, during, and after their stay. This ensures a seamless guest experience and reduces the workload on your team.
• Performance Analytics: Use Breezeway Insights to track key performance metrics and make informed decisions. Breezeway’s platform provides insights into operational efficiency, task data, and guest reviews, helping you optimize your operations and improve profitability.

Whether you’re an Airbnb host, real estate investor, or property management company, leveraging Breezeway’s automation tools can streamline your operations, reduce costs, and enhance the guest experience, leading to increased profitability.

Improving overall vacation rental income

Improving the profitability of your vacation rental properties requires a multifaceted approach—and it does not just mean raising nightly rates for guests. By being strategic about how you engage your guests with amenities and upsells, expand your distribution channels, and market direct bookings, you can maximize your returns and stay ahead of the competition.

At Breezeway, we are committed to helping you achieve these goals. Our short-term rental operations and guest experience software is designed to enhance the efficiency and profitability of your rental business.