Tuesday, May 20, 2008

10 Steps to Vacation Rental by Owner Success

After working with thousands of vacation rental owners, we have put together a list of items that seems to be consistent with the most successful owners. Owners ask all the time, “What does it take to be successful in the business?” well here it is. We put together this list as these items seem to be what the most successful owners are ALWAYS doing.

1) PROPERTY. The best thing you can do is to buy the right property from the start. There are no shortcuts in this area. If you are in a coastal area, people want to be as close to the beach, ocean, or water as possible. Guests want access to a pool. They want great views in the mountain areas etc. They want a nice clean updated or new place to stay. Buying the cheapest home on the market may cost you in the long run. Be sure to research where you are buying and make sure your vacation rental offers as much as possible for your area.

2) BOOKING SYSTEM. Having an online booking system or software like http://www.ivacationonline.com/ lets your guest know you are serious about your business. Add the online credit card processing to this and you will attract more guests. We have surveyed hundred of guest and they want to pay online with a credit card. You need to put the odds in your favor. One survey revealed that over 41% of the guest surveyed told us that an owner taking credit cards influenced the buying decision. Why send 41% of the market down the road to another owner? Take credit cards online and supercharge your business.

3) PHOTOS. The most successful owners we work with have the most and best photos easily available. In years past, 3-5 photos online would bring in the business. Now you need hundreds. We highly recommend PICASA by Goggle. It is a free online web based album service. It lets you showcase not only your property but also your community and town. This way you can “sell” the entire vacation experience. Guest love to see photos! Give them that option. They are really buying your photos once you think about it. That is the only way they know what you have to offer until they arrive at your location.

4) PRICING. Too many owners think their properties are worth more than they are. The normal guest has thousands of options to pick from. They all look alike to the guest! There are millions of very nice vacation homes on the market. The chance that yours is the best is extremely rare! So price it accordingly. If you see your market is getting $1200 a week for a prime week, you need to be at $1195. This keeps you in the market and priced “right”. Trying to price it at $1500 to “see what happens” is a sure sign NOTHING will happen. Guest can shop too easy. Price it right, book it up and be thankful for the success.

5) DISCOUNTS. Once you are priced right, you may have times open that you need to discount. This does not mean you are giving time away. It is simple a “marketing” strategy to increase your booking ratio. If you have 3 weeks booked and you have one week that is open, offer a discount. Taking a $200 discount may mean the difference between a $1200 booking and $0. $1400 would have been nice, but $1200 is better than $0. The higher ratio of bookings you have, the more likely you will be in the “black” at the end of the year.

6) DOMAIN NAMES. Successful owners understand that the guest wants to book online as fast as possible. Taking them to other web sites and then to your online booking site, increases the chance you will lose them. INTERNET sales 101, less clicks the better! Period! So buy a URL that applies to your area/property, like this one, http://www.bluetides411.com/ and point it to your online booking site. The faster and easier you can get a guest to your site and book online, the greater your closing ratios, the greater your gross income. More examples:
http://www.destinpalms.com/ http://www.sugarsands411.com/ http://www.waves411.com/
http://www.bajaretreat.com/ http://www.beachclub411.com/ These are all pointing to the owners’ online booking site and the owner can take a booking in a few clicks!

7) ADVERTISING. VRBO is not enough! This is one of the biggest problems we see. Many owners think that if they advertise on VRBO alone, they can be successful. That is no longer true. You must set up an “umbrella of advertising” as we say. Search your location and find advertising sites that come up in those searches. Joining 5-10 sites is not too many! You need to spend $1,000 to $1,500 a year to properly advertise your property. Anything short of that and you will simply not get the calls or emails needed to be successful. This is the difference in getting a few bookings and being totally booked solid. YOU NEED TO ADVERTISE!

8) UPDATE PROPERTY. Most successful owners update the property almost every year. Guests want to see that the owner is taking care of the place and putting some money back into the property. New linens, furniture, fresh paint all make a difference. Have a policy in place that each year you look for the worn out items and replace some or all of them. It will keep the repeat business coming back!

9) ANSWER CALLS. Most owners get plenty of leads but do not get back to the prospect in a timely manner. The guest is online right now, looking for a place to book. They call or email you, and then you take 24 to 48 hours to return that call or email. During that time they have booked someplace else. Calling or emailing them the second they respond is the best policy. If you can not get to that till later in the day, call or email as soon as possible. Time is money! Your Money!! Call faster than the other owners and get more bookings. Simple!

10) STAY IN TOUCH. Make sure you stay in touch with guest after the stay. Having to market all over again next year for all new guest makes it hard. If you can get your repeat business up to 30-40%, running at 90% booked is now a possibility. More business gets more business! They bring a friend and so on. Having a plan in place to stay in touch, so when they want to book again the next year, they think of YOU! Not staying in touch and sending them back online to find another property is a waste of resources. They found you once, stayed with you and now trust your business and property. Do the proper marketing to them and they will stay with you for a life time!

These simple techniques are proven over and over again to bring in more business. They are battle tested. How does your style or business measure up? Are you booked 90% of the time? If not, make some changes. These all take time. Many owners simple do not run their business like a business. Make sure you do it right from the start. Once you set up these items in place, they will work for you and you may have years of vacation rental success. Good luck!

Friday, May 9, 2008

2008 Vacation Rental By owner Season


Well, the 2008 rental season is in full swing. We had tons of questions about how this season would turn out. Here is what we are seeing. The owners that are "working" the business correctly are doing better than ever. Our units and most of the owners we work directly with, that are using all of the tools available to them, online booking, advertising, running specials, photo albums, these owners are having record years.

They are all beating the 2007 numbers they posted last season. WHY? They are working harder than most other owners. The rental market is still very strong. With gas at almost $4 a gallon, people still want to take a vacation. So it is tougher on many, but with the proper tools, you can do very well in the toughest of times.

We are seeing some higher than usual cancellations. We feel this is due to many factors. They may have booked a few months ago, put a deposit down and when the full payment comes due, the funds may not be there for some families. This is another reason to be taking credit cards for your rent payments. Some guest who may not have the funds today, will put the final payment on a credit card, to make sure they can take the family on vacation. So it is another way to get business you may have lost.

We are also seeing new owners enter the market and doing VERY well. All for the same reasons. If they buy a desirable unit, they advertise properly, use the online vacation rental software from http://www.ivacationonline.com/ to complete bookings as fast as possible, they are filling up the calendar as soon as the start marketing.

REAL ESTATE MARKET. This is a totally different animal from the rental market. Real Estate markets are having a very tough time. Some prices continue to drop and some have leveled off. Buying a unit now is a great idea. Prices have not been this low in 4-5 years. But do not confuse a tough real estate market with a tough rental market. They are 2 different animals. Rentals are strong. You may have to work a little harder, but to the victor goes the spoils. Update your photos, take credit cards online, price your property correctly and you will have your share of business.

The bottom line is always been and always will be, you get out what you put in. Do the work to make your rental business a success and you will be successful. Do nothing and nothing will happen.

Stay tuned. We all hope the real estate market and the economy will swing back to the top soon.