Looking Back And Planning Ahead For Vacation Rental Success In 2024
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The start of the new year is traditionally the time to reflect on the successes and failures of the pervious year and make plans for the coming year that with help guide your business forward.
A structured and repeatable end-of-season / end-of-year review strategy is important because the down time is short. It’s easy to loosen up too much and although kicking back and enjoying the quiet moments is great, we don’t want to lose the opportunity for planning.
If you can spend a week on assessment and strategy, this will lay the foundation for a great new year.
How to prepare for Short-Term Rental Success in 2024
Collate and Review Your Short-Term Rental Reports
Set Your Vacation Rental Goals
Review The Relationships With Your Property Owners
Review Your Property Management Administration Systems
Refine and improve your business operations
Define Your Marketing Strategy To Target Your Goals
Review The Year With Your Team And Brainstorm The Way Ahead
1. Collate Your Short-Term Rental Reports
Start off by pulling all the reports you’ll need. If you use a good PMS these should be readily available and should answer questions such as:
Which properties delivered the best revenue?
How many property contracts were lost?
How many properties were acquired?
Were occupancy levels as forecast?
Was the dynamic pricing strategy effective?
Which marketing avenues generated the most conversions?
What units had the highest levels of complaint?
These general reports will allow you to drill down to areas of challenge and opportunity and create the foundation for separate areas of discussion.
For example, a review of how each property has performed in terms of income, occupancy and reviews can help in creating a new standards policy; a benchmarking system for new acquisitions, and the overall marketing strategy for a new season.
Assuming you set goals at the beginning of the current year, you can use the reports to check whether you met them, or fell short at year end.
Your goals might include revenue generated from reservations; new home acquisitions; conversions from marketing campaigns, churn rate etc.
For each goal, include an analysis of the reasons for failing to reach them, or an explanation of over-achievement. For example, unprecedented weather conditions may have had an impact on reservations in some months. Here in Ontario we had significant rainfall in the spring causing flooding that impacted several properties over the course of the next few months For some that meant the abandonment of an entire season of rentals.
If you don’t have any benchmark to reach, then use the exercise to create your month-to-month measures for the new year.
One of the best ways to set your goals as part of a larger strategy is nailing down your business plan! Get our FREE business plan template to help get you started: Short-Term Rental Business Plan Template
3. Review The Relationships With Your Property Owners
The relationships you have with owners can make or break your business. Unless you have complete control over how their homes are furnished and maintained and how often upgrades are made, you’ll rely on owners to deliver a great product. That makes it all the more important to look at how every property performed during the past year – not just in terms of revenue but in the relationship itself.
Were there any guest complaints?
If there was owner involvement, how was it handled?
What are tolerance levels with regard to minor damage?
Were there any hospitality highlights?
Sometimes, even a high performing property may need to be terminated if the owner/company relationship doesn’t meet your expectations. This is a tough call and maybe remediation is possible – this is the time to explore the options.
Assessing Systems efficiency and cost of administration is an end of year task that can have a positive bottom-line impact.
Evaluate how all your resources have performed. This could be your staffing levels, how much work was outsourced, call centre costs, monthly and annual fees for CRM and PMS. In fact, take a look at all administration costs and consider how these could be reduced or replaced by a more efficient method of carrying out the same task.
Did you buy into any new platforms? Have these reduced staffing costs or had other hidden impacts?
5. Refine and improve your business operations
Assessing operations means looking at the ways your properties are managed. This incorporates cleaning and maintenance; management of repairs and replacement of broken items, effectiveness of suppliers and cleaning teams.
You may see the 80-20 rule applying in this exercise. In general, you’ll find 20% of your properties will cause 80% of the problems, whether it’s the amount of guest complaints, damage or cleanliness issues. Alongside revenue reports, this information can provide the justification for the termination of owner contracts or at the least highlighting the potential for future problems.
Evaluate all your suppliers considering their response time, rates and reliability. We often stick with the same providers because it’s easier than sourcing new ones, but on reflection you might find it would be more cost effective to cut ties with old and established services that are not cost-effective any more.
6. Define Your Marketing Strategy To Target Your Goals
This is the fun part, and done thoroughly can yield so many insights.
If you are the perfect management company, you’ll follow your Google Analytics stats closely and pull off weekly and monthly reports that show how impressive your campaigns are; you will analyze listing performance that shows which OTAs are delivering the best results; and you’ll have numbers from all social media accounts that identify the types of posts that work the best.
And pigs might fly!!
While you may look at reports coming from your PMS each month, for small to medium companies, this in-depth analysis is probably not something that you spend a lot of time on. After all, once the season gets into the flow, there’s far more to think about than how the AB testing on the latest Twitter image worked out.
In fact, if you are thinking about AB testing at all, you are way beyond most of your competitors.
Having said that, taking time at your slowest time of year to evaluate your marketing activities from the past year, is such a valuable exercise and could save you a lot of time and expense for the coming season. After all, if you find you did something that took time and just didn’t have a good ROI, then you can ditch that for the new year with no regrets. You tried it – it didn’t work. As long as you learn something from the exercise, it’s not been a complete waste of time and effort.
7. Review The Year With Your Team And Brainstorm The Way Ahead
Although much of this work is statistical analysis, make sure you give time to some subjective feedback from your staff as well.
How did they feel about the year? Were there particular stressful periods that could have been alleviated by better systems? Did they get held back by any system issues? Sitting down with staff one-to-one and in a group feedback session can deliver some great information on how they managed guest and owner relations as well as their perspectives on decisions you may have made over the year.