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Staying Competitive in the Vacation Rental Market – the WiFi Connection

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I would not rent a property without Wifi. That is one of my ‘must-have’ criteria. Others will not consider places unless they are pet-friendly, and there are many more who are not interested in staying in a place that doesn’t offer post rental cleaning, either included in the rental rate, or offered at an additional fee. To a lesser extent, the lack of other amenities can be deal breakers, and with increasing competitiveness in the market, owners are moving towards amenity packed listings to attract more guests.

Should you invest in a high priced amenity, such as a hot tub, or commit to a contractual payment plan for a Wifi connection, when there is no guarantee of the return on investment?

To answer this, simply calculate costs of installation and ongoing fees and work out how many additional rentals are needed to pay for the amenity – that will give a rough estimate of whether it will be a worthwhile investment.

Installing WiFI

In many rural areas, hi-speed internet access is becoming increasingly available with satellite and line-of-sight wireless options. There’s usually a one-off installation, equipment and connection cost and after that, a monthly fee. We did this in both our cottages and paid around $400 for set-up and now pay $60 per month for the service. Since we’d lost a couple of potential bookings because of the lack of the facility, I fully expected that we’d get more enquiries once WiFi was available and this was the case. Our weekend rental rate is $575, of which direct costs of cleaning, supplies, heating are roughly $125. Even taking indirect costs into account, it was clear that a single additional weekend rental would cover what we paid to install the equipment. Another 3 nights of rental (we may have missed before getting connected) would pay a complete year of rental. So….all we had to do was attract two to three more weekend rentals than the previous year, and we’d have the full cost covered, with any additional bookings that could be attributable to the addition of internet, added to the bottom line. Since installing WiFi in Osprey Cottage gross revenue has increased by over $5000 annually. Is that a direct result of the addition? We can’t be sure, but a poll of some of our guests points to it as being a significant deciding factor in their selection of the cottage for their short break.

If you are on the fence about upgrading facilities and amenities, think about where you stand in relation to your competition. It’s often a simple matter of looking at their listings and seeing if they are offering more than you. There is so much choice for travellers now, particularly out of season, if you want to capture that more limited market, you need to do something more. Don’t look at the cost in isolation – make sure you calculate the return on your investment based on a sensible estimate of increased occupancy – then get marketing!