It’s not you, it’s me…
For many modern professional short term rental hosts, Airbnb was the gateway into a larger business opportunity. While the industry itself has been around for a long time, the relatively new uptick and general acceptance of the vacation rental industry over the past decade spawns mostly from Airbnb. Indeed, “Airbnb” has become the word most people use to describe vacation rentals stays generally.
But whether you were fed up as a host about how Airbnb handled Covid, or whether you are simply getting to the next step of your business growth – there comes a time in everyone’s business where you start to realize that…maybe you should start seeing other people?
What did you learn?
Like any relationship, it’s important to reflect on what you learned and can take away from Airbnb. Airbnb really is, technically speaking, a great first platform. But there are pros and cons…
Pros: Easy to use interface, streamlined backend operations, and customer support can be huge benefits. Specifically, Airbnb has a lot of built in excellent marketing tools for reaching guests, it has a great Host Guarantee (insurance) system built in to the price, and in a pinch, Airbnb support generally is pretty quick to help try and resolve an issue (*though if a guest needs to be evicted or a serious issue occurs Airbnb can be extremely hands-off).
Cons: Airbnb takes a handsome fee for its services, charging both guests and hosts a service fee to use its platform (Note: the service fee may change based on factors like how many bookings you are taking on the host side, previous issues or resolutions on the guest side, or even if you upgraded to get premier listing status on Airbnb Plus). These fees can be up to 15-20% – which when you’re working with tight margins really adds up. Airbnb is pretty targeted both in its demographics and geographically.
There are other fish in the sea…
In order to really optimize your vacation rental business however, listing on multiple platforms is essential. The first step to getting there is picking a good Property Management Software (PMS). Unfortunately, this search process can be cumbersome and truly warrants a separate post (huge differences if you’re running a hotel type operation or a month-to-month operation). If the PMS software you choose doesn’t have a built in channel manager, you’ll need to figure that out as well. Once you are set up on a proper PMS solution, you’ll ideally be able to handle messaging, calendaring and pricing from a central location. Some PMS software offer additional perks, like automation or reporting tools that can be huge time savers. Others advertise direct API connections to listing platforms – which can be beneficial if you have a lot of listings and have accidental overlapping bookings or lag in your connection.
Learning how to play the field is different for every business however. Some markets have smaller niche local platforms to look into, some properties generally perform better on certain platforms as well (large houses = VRBO, apartments = Airbnb). One additional factor to consider though, some PMS software is not compatible with some listing platforms – though this has been getting better (take note of Booking.com for example). Once you have the right PMS software + platform listings set up, you can start raising your price and should see an increase in revenue. More eyes looking at your property, more possible bookings you can charge more per night.
Finding THE ONE How do you know when you’ve “made it” in the industry? There are many different benchmarks for success, but one almost universally agreed to one is when you have return guests. Once you’ve cast a wide enough net across all the platforms and have a streamlined operation where you are operating at high prices, focusing on each guest’s experience becomes crucial. Collecting contact information, sending marketing e-mails and reminding them that yours is the place worth paying a little extra for is how you can build a worthwhile brand and start to create your enterprise value.