Increase Resort and Vacation Rental Occupancy: How to Achieve Your Ideal Number of Days at Ideal Rates
August 26, 2021
Increasing the occupancy rates of a resort or vacation rental starts with knowing your market. Some property owners rely largely on their location. Others concentrate on the amenities they can offer to guests. It’s up to each individual owner to strike a balance that highlights the perks of their space and entices travelers to lock it down.
If you’re struggling with your occupancy rates, you may need to rethink how you assess your competitive advantage. The lodging industry can be tough to break into in certain areas, particularly as the opportunities climb for owners across the country.
The good thing is that vacationers are seeing the value of exploring all parts of the US, as opposed to only the big-name destinations. We’ll look at what a property manager or owner can do to improve the numbers by forging a better connection with guests.
Know Your Renters: Why Vacation Rental Owners Need to Focus on a Target Demographic
Your lodging is unlike that of anyone else’s. It’s the differences between you and your competition that inspire your renters to choose your property. Once you’ve narrowed down what makes the property special, you can highlight those characteristics in a digestible way.
The Crux of a Short-Term Rental: The Perils of Searching Online
It’s easy for guests to feel overwhelmed when they’re looking for a property to rent online. From price points to maps to reviews, it’s a rabbit hole that can frustrate would-be travelers.
When you understand your audience and what they care about, you can cut straight to the point. This kind of precision marketing makes for more honest communication and more positive reviews.
What Is the Average Vacation Rental Occupancy Rate for a Short-Term Rental?
Studies vary, but the average vacation rental occupancy rates are about 48% for Airbnb. Keep in mind though that these rates are determined by any number of factors. In addition, the calculations are only performed based on how often an owner chooses to rent the home.
For instance, let’s say that you own a freestanding home in Vail, CO. You live there for three-quarters of the year and rent it out during ski season. Because you’re only taking into account one-quarter of the year during the most in-demand season, it may skew the averages for other property owners.
How to Calculate the Ideal Occupancy Rate
A property owner with a near-perfect rate compared to one with a near-zero vacation rental occupancy rate will balance out to about 50%. When you consider your individual property, the target rate shouldn’t necessarily be based on the countrywide average.
Instead, you’ll want to factor in both the tourism interest in the area as well as the rental income you need to earn to make the venture worthwhile.
The Basics of Occupancy Rates
Property owners will likely already know when their lodging is going to be booked. For instance, even the most basic accommodations are likely to be 100% occupied during a popular event, such as a music festival. IN the right circumstances, even a small patch of land for a tent might command serious money!
Encouraging Renters to Choose Your Lodging for Everyday Getaways
The occupancy rate debate has more to do with the attention the property receives on ‘normal’ days. As with any selling endeavor, owners and property managers need to isolate what they hope to achieve from a new strategy. A goal for higher rates is a great place to start, but it’s not enough. A realistic, specific metric gives everyone involved something tangible to work toward.
So, let’s say that a property manager has been struggling to hit capacity during weekdays but is booked solid on weekends. A realistic metric to strive for might be a 20% higher occupancy rate from Mondays to Thursdays.
This may mean delving into exactly who is booking during the weekdays (e.g., retirees, young families, etc.) and then shifting the marketing to speak directly to them. In this case, changing the marketing is unlikely to affect the weekend renters because they were likely to book no matter what.
How Major Events Affect Your Occupancy Rates
Major events can both help and hurt the rental industry. While a huge wine festival will increase your occupancy rates for the better, a natural disaster will do just the opposite.
However, rates aren’t always as straightforward as they may seem. We can take the pandemic as a good example of this phenomenon. As we might have been able to predict, the initial lockdowns brought rates down to 0% in certain areas.
However, instead of continuing to plummet during the summer, the average daily rate went above $200 per night in July. There was also an increase in both last-minute bookings and extended stays, climbing from about 3.4 average daily stays in late 2019 to nearly 5 average daily stays by fall 2020.
The lesson here is that major events don’t always look the way you expect them to look. There may be more opportunity than meets the eye, even if predictions look bleak when the initial news makes headlines.
Finding Your Niche: Determining Your Demographic’s Priorities
Your property isn’t going to be everyone’s cup of tea, and nor should it be. Trying to cater to everyone’s tastes is not only impossible, but it can also be counterproductive. You may end up alienating the very people you were trying to appeal to.
A low occupancy rate may be an indicator that you need to sketch out what your true demographic looks like. This is the time to picture not just how an exceptional property looks, but also how it’s likely to be used.
A contemporary one-bedroom apartment on the fifth floor of a high rise may attract a younger renter than a traditional three-bedroom beach cottage. Vacation rentals that are 10 miles away from the main attraction (e.g., a national state park, the beach, etc.) will need to be marketed differently than those that are 10 minutes away from the same location or located directly on the premises.
Capturing the Spirit of Your Property
One of the ways you can better understand your demographic is to look at the reviews of properties around you. Part of what makes a vacation property special are the unexpected moments that can often only be had away from home.
A glance out of a large picture window in the exclusive resort lounge while drinking coffee. An impromptu ping-pong tournament in the rec room. Roasting marshmallows in the fire pit at the back of the yard.
Plenty of reviews will mention these pleasures, which can help you decide how to better appeal to renters. For instance, you might leave all the fixings for s’mores in one of the cabinets, a small investment that could have big returns. Or you might set up a whiteboard in the rec room to keep score or invest in a few board games, puzzles, or cards for the living room.
Plant the seeds of how people use the property and let their imagination take it from there.
A Room with a Signature View: How Windows and Walls of Glass Can Affect Vacation Rentals
A recent marketing campaign for hotels, resorts, and vacation rentals starts with a pivotal question. It asks the listener whether they want to look out the window into a parking lot on their vacation. This might seem like a gimmick, but considering how many hotel rooms face industrial buildings or rows of cars, it may be more relatable than people might give it credit for.
People go to resorts and vacations for a change of scenery. The novelty of a different location can be enough to relieve some of the stress that’s built up since their last break. Advertising strategies that center around an exceptional view can be as effective as those that center around luxury furnishings or high-tech gadgetry in the kitchen.
How to Encourage Guests to Embrace Indoor-Outdoor Living
When you consider your resort property, certain classic features likely come to mind. The weeping willow in the back, the flower beds in front, or the mountain range set off in the distance. It’s not just the obvious features that matter when it comes to resort rental occupancy though.
Panda Windows & Doors engineers quality custom windows and doors for properties of every variety. Our experience has taught us that there’s always something to be found just outside the glass. A view of an edible garden, an elegant patio table, a hot tub in the dark of winter: there are plenty of cost-effective changes you can make that can result in an improved occupancy rate.
Tempting People Outdoors with Exterior Lighting
An often overlooked tactic is that of the exterior lighting of a vacation rental. In some cases, this might mean an extra investment for owners. For instance, installing multi-colored LED lights on the patio can encourage guests to dine or dance outside.
In other cases, it might mean taking more advantage of what’s outside already. For instance, large glass walls in rural areas will flood the space with sunlight or even moonlight. In urban locations, unobstructed windows show off the electric nightlife outdoors.
Short-term rental owners who choose us ensure that the most elegant features of the property are framed the way they need them to be. When owners find the right display tactics, it’s easier to compel renters to choose their property above the rest.
Location and Revenue: The Logistics of Your Property
How much revenue you clear is directly correlated to how often you can get people into your lodging. This is true no matter when you’re renting. While peak tourism season can (and often does) make up for weeks and sometimes months of inaction during the off-season, it’s no reason to let your property sit if it doesn’t need to.
Even if your property is on the lower end of the market scale, there are ways to capitalize on its location. This doesn’t mean that your property will be booked solid year-round, only that you can leverage where you are to gain more customers.
It’s impossible to standardize all advice and tips for all resorts and vacation rentals. There are few comparisons between an urban studio lodging in NYC vs. a sprawling luxury suite at a resort. What is common between the two though is that they offer benefits to getting away. Showing vacationers where exactly they’re going can make a big difference in how they respond to your marketing.
Work on Your Communication: Why Your Response Can Go a Long Way
The number of days a property is occupied is related to how property managers work with their guests. When a prospective customer asks a question about the property, are they getting an answer back immediately? If 10 prospective guests ask the same question, is the marketing updated to reflect the answer?
Whether it’s a resort or a vacation rental, guests want to know that they’re being heard and attended to. Simple things, like answering the phone more often than not or checking email more often, can have a serious effect on your occupancy.
Average Daily Rate: How Much Should You Charge for Your Short-term Rental or Resort Property?
The average daily rate of a lodging takes into account all of the days it’s on the market. When people first put their properties up for rent, they often look at what comparable properties are going for in the area. A simple search on Airbnb, VRBO, or Priceline can go a long way to tell you the market rates, though it shouldn’t be the only comparison you use.
There’s something to be said for starting with a lower market rate, especially at the beginning when you haven’t built up a reputation. Price is certainly an effective way to distinguish a property from the competition and this strategy can potentially push your occupancy rates higher than you anticipated.
There are disadvantages to deflating your price though. For one, it can bring down the daily rate even as it increases your occupancy rates. For another, it can attract a clientele that will treat your property with disrespect. You may be better off keeping your rates at market value, even if it comes at a cost of a few unoccupied days.
Using Social Media to Bring Up Your Averages
Even if platforms and usage vary, your target demographic is on social media. Some will favor Instagram or TikTok, others Facebook or Twitter. If you want to get your vacation rental rates up, promoting your properties will have a lot to do with it.
To reach more customers, it may mean taking out paid ads on the platforms your guests frequent. Or offering small incentives to past guests to mention your name in their social media feeds. For instance, a 3% discount for telling their friends and family where they booked their vacation on Facebook. Taking the time to create “instagrammable” spaces and experiences will help encourage social shares and positive online reviews as well.
You should also have your own feeds on different social media pages that highlight why people should book your property. Try showcasing local business owners on the feed, cross-promotion style. Encourage guests to meet locals and sample the best the town has to offer. Even people in rural locations can spotlight the nearest grocery store, antique shop, or diner.
The good news is that most vacation rental owners and property managers feel they could be doing more to improve the visibility of their vacation rentals. This means that if you’re doing everything you can to call attention to your property, you’re in the minority. It will be that much easier to get people to remember you if you’re in the right place at the right time.
The Panda Promise: How We Help Vacation Rental Owners Improve Occupancy Rates
We encourage property owners to give their occupancy rates careful consideration. Knowing the numbers is a smart way to make strategic changes. Whether improving the property, marketing plan, or communication policy, small efforts can make for big profits.
At Panda Windows & Doors, our unique products are designed to be durable enough to stand up to vacationers of all ages. We make every window and door with you in mind, which can take your property rental to new heights.
About Panda Windows & Doors™
Established in 1991, Panda’s mission is to create the most elegant, minimally obtrusive, and precision-engineered windows and doors. Headquartered in Las Vegas, Nevada, all Panda Windows and Doors are manufactured in the USA.
Panda offers more than 50 high-quality systems including Folding Doors, Lift & Slide, Horizontal Sliding Wall Systems, Pivot & French, Multi-Slide Doors, Retractable Screens, Panda-Select line, TS.X0 Ultra-Slim line, and Architectural Windows.
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