Vacation rental income: How to increase it?

This post will help you increase your vacation rental income. The situation is as follows: You've been running your tourist accommodation rental business for over a year now. So far, your occupancy rate has been fluctuating around 80%, and your vacation rental profits have remained within your targets. Great! Until these past few months... You're not quite sure how, but the number of bookings has decreased. To mitigate this, you've reduced the nightly price of your accommodation and have just added extra services to your Airbnb, such as Netflix, or installed an air conditioner. Even so, vacation rental income is falling.What's going on?Let's look at some typical causes of this decline and what you can do as a host to solve this slump. Before we dive in, you may want to explore some concepts further:

• How much does an Airbnb host earn?
• Benefits from tourist apartments vs profit per hour
• Pricing strategies for tourist accommodation
• Pricing errors in tourist apartments

Vacation rental income is declining... and it's your fault

This is the best situation of all. Don't you believe it? Well, if your vacation rental income is falling because you're doing something (or not doing something) as a host. Therefore, there's something under your control that you can change to improve! Now let's identify those causes.

You've been a lucky host 🍀

It's possible that when you started your vacation rental business, income skyrocketed. Maybe two elements combined to create this perfect storm:

• On the one hand, the supply of accommodations was scarce.
• On the other hand, the demand from travelers was skyrocketing.

In this situation, having high income from vacation rentals was simple. Maybe you just needed a couple of photos and a brief description. As the supply was scarce, your ad always appeared first in your area. However, as competition has increased notoriously –and you knew this was going to happen sooner or later–, potential guests are becoming more demanding. And, of course, they prefer better accommodations.

How to increase your tourist rental income

The good news? If you're in this situation, increasing your tourist rental income is really simple. Start with the easy things (remember that, according to Pareto, 20% of the work will bring you 80% of the benefits):

1. Improve your Airbnb, Homeaway, or Booking photos. 💡 Here are some tips for taking good photos of your tourist apartment.
2. Make the Airbnb listing description easier to read.
3. Get 5-star reviews from your Airbnb guests.

Tip: Don't go crazy adding extra services. Once you have the essential list of things that should be in your tourist accommodation, add or update only those that bring real value to your guests. For example, replacing the old mattress with a new one adds more value than a new set of glasses.

The profits from your tourist accommodation are falling... and it's NOT your fault

If the profits from your tourist accommodation are falling and it's not your fault –that is, there are elements you can't control–, we can find ourselves in two scenarios.

Scenario 1: Competition in your area is increasing

As vacation rentals become more popular, competition in your area heats up. Hundreds of new listings appear in your area every day! This isn't a revenue management trick for Airbnb. It's basic economics: the greater the supply of a good with constant demand, the lower the price. Applied to your business: your vacation rental income will tend to decrease. If this is your case, conduct a thorough market study and pay special attention to the competition. Is there a pattern you observe? Can you apply any of their techniques? Once you've done this, you may have already taken some ideas that you can put into practice quickly for your business. However, in searches on the platform, you continue to appear on the second or third page... (Not being on the first page is ostracism). If this is your case, you have two options:

• Follow these tips on SEO for tourist accommodations.
• Open new channels (for example Booking) or Fairbnb, a great alternative to Airbnb.

[caption id="attachment_10488" align="alignnone" width="1024"]

Defenestration of Prague (Johann Philipp Abelinus, 1618) or Airbnb launching your ad to the second page[/caption]

Scenario 2: the demand for tourist accommodations in your area is falling

This second scenario is less common than the previous one. However, there are some markets that may experience partial or total reductions in demand due to external factors. Note that this scenario does not describe the low season –if this is your case, take a look at our post on making money with Airbnb during the low season–.The abrupt change in guests' tastes and habits is common in under-diversified tourist markets. For example, if an amusement park in the middle of a wasteland closes, the vacation rental income in the area will be affected.In this case, there's little you can do to improve. Try to have the best ad for the best accommodation in the area. However, be aware that you can't create demand out of nothing.Having said that, it's time to adjust the price. The change in demand must be reflected in the prices you charge per night in your accommodation. If you need help with this topic, take a look at our post on demand-based pricing.If adjusting your prices, you see it's not profitable, you may want to reconsider continuing with the business. In some cases, the market simply stops offering you the benefits for tourist rental that you expect and the most intelligent solution is to close. Doubts about the financial issue? Download our free financial plan for tourist accommodations.

What is the status of the income from vacation rental of your accommodation?

It's easy to find out. To see what the situation is in your case, take a look at the competition in your market. Look at ads similar to yours and see what price per night they're charging and the occupancy rate of the accommodation they have. If it is around 80% in the next 15-30 days, copy those techniques for your Airbnb.Another idea is to ask friends for feedback, ask them to evaluate the most relevant aspects of the accommodations in your area –don't tell them which one is yours–. Getting third-party opinions is a great option to detect opportunities for improvement... and thereby increase income from tourist rentals. It is also advisable to conduct an Airbnb market study, to detect patterns in both supply and demand.If your accommodation is already at the top of your area and vacation rental income continues to stagnate, you should consider reorienting either the location of your accommodations to other areas with higher potential tourist rental income.

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