Short-term rentals provide a unique opportunity to monetise your property, whether you’re an owner-occupier or a professional landlord, far outperforming long-term rentals in terms of yield. Hence why the short-term rental industry is experiencing a phase of astronomical growth. This is further boosted by macro societal trends; the unstoppable rise of the sharing economy, the growing need to monetise property to support an unaffordable mortgage, our evolution as a more transient, multi-cultural society, etc.
Yet despite the growing trend to rent short-term, most landlords/hosts stick to a single channel when marketing their property. The main one being Airbnb. But assuming occupancy and rental yield are your main goals, then marketing your listing across multiple channels and platforms is always better. More eyeballs on your property leads to more enquiries, which lead to more bookings and higher occupancy rates. And it doesn’t even need to be any more time-consuming.
Before we explore the multitude of channels and platforms available, you first need to think about the kind of renter you are, what kind of property you are marketing, and what are your goals and preferences.
What type of short-term renter are you?
Most people have heard of Airbnb these days, but people decide to open the doors of their property to short-term guests/tenants for a variety of reasons. It is necessary therefore to think carefully about what your priorities are, and what success looks like for you.
Usually you will fall into one of these two categories:
- Owner-occupier: Are you an owner/occupier looking to monetise your home and unlock some extra cash whilst you’re away travelling? This is classic “homesharing”. If so, your primary motivation is probably that the experience of renting your home is hassle-free, and that the guests you share your home with are trustworthy and treat it with respect. Actual net yield is possibly only a secondary motivation.
- Professional Landlord: You are probably more motivated by the financial return that short-term letting offers, but there’s still a strong need of reassurance that the tenant/guest in place is trustworthy and meets certain criteria.
The relative importance you ascribe to “net yield” vs. “hassle-free” vs. “trust” will guide you towards your ideal pricing, and channels.
What are the main channels for winning occupancy?
- Airbnb: The zeitgeist. Still growing fast, in no small part because of the quality of the user experience and the trust that the platform builds between guest and host. Airbnb has historically attracted a younger type of guest – traditionally somebody looking for a cheap alternative to a hotel – though this is now changing as confidence in the app builds and the user base explodes. Demand is perennially high if you have a good quality property in a sought-after location. The trade-off is that you will likely win that occupancy at a lower price point than might be achievable through other channels due to the price-sensitive audience. This is changing though. Two years ago already Airbnb launched their business travel offering. Now they are capturing a growing number of business travellers who want the flexibility of being able to choose the exact location of where they stay, whilst at the same time saving money vs. the traditional corporate 4* hotel. Airbnb listed as of June 2016, 2 Million accommodations, compared to HomeAway’s 1.3 Million and Bookings.com’s 0.45 Million
- HomeAway: The holiday specialist. HomeAway is a network of local booking platforms specialising in vacation rentals. The HomeAway brand encompasses over 25 different websites, the main of which (homeaway.com) receives nearly 15 Million visits per month, 60% of which coming from the US. Because people are booking for a 1-2 week holiday, they are happier to pay more for a premium product that will guarantee comfort during their trip. This is reflected in the rental income they yield on average per property: About $4,000 per year for Airbnb, and $12-13,000 per year for HomeAway.
- Booking.com: Originally a hotel booking engine favoured by travel agents, now a growing player in the homesharing market. A major source of their bookings was historically due to the fact that it is embedded into the operations and habits of thousands of independent travel agents. As an audience these users are less price sensitive (as they are not spending their own money) and simply want to book suitable accommodation for their clients. A higher proportion of business travellers than most other channels.
- Other platforms: The rest of the market is hugely fragmented. There are literally hundreds of other platforms (Tripadvisor, Flipkey, Wimdu, etc. to name a few). Smaller channels can be a great choice for niche properties or geographies. They may also however provide less support and/or charge higher fees. Their inventory is often smaller, giving less options to short-term tenants and, in turn, attracting less of them.
- Direct booking: Allowing guests and tenants to book direct without going through a booking engine. This is the preferred channel for corporate tenants and their relocation agents as it avoids platform fees, and is the exclusive preserve of more established and sophisticated operators like Lavanda.
A few tips about multichannel short-term rentals management
- 1. Success is defined by how well you understand the platform and the audience The nature of the audience determines how you should market your listing, and that in turn is what wins occupancy. From pricing, to knowing how to categorise your listing to the tailoring of the property description, to the hospitality services that you offer your guests…
- 2. Syncing calendars to avoid duplicate bookings You need to have a single universal calendar for your listing that integrates with the various platforms you choose to market your property across. If not you will constantly be taking bookings on one platform and then having to remember to manually block out the dates on others. It will drive you mad. If you get it wrong and a booking slips through, then you could be liable for having to pay a cancellation fee.
- 3. Managing guest communications This can be hard work if you don’t get appropriate technology in place to help. It can often require an extra layer of communication too, if you do not live at the property and rely on someone on the ground to let your guests in, etc.
- 4. Setting up and taking payment No two channels are the same. Some charge per transaction. Some charge a yearly fee. Some pay mostly upfront, others pay after the guest has departed. Some even rely on you to take cash upon arrival by default.
- 5. Setting cancellation policies Make sure you know how to set these up, and importantly how they differ across the platforms you use. Read the Ts&Cs!
Short-term rentals are growing in popularity because they are a particularly high-yielding option for any property owner in a coveted location like Central London. A multichannel / multi-platform approach is necessary to maximise occupancy and yield – but it needs to be implemented properly to create and unlock personal value.
In this respect it pays to work with an expert in the field, who can advise you on the best channels to list your property on depending on its attributes,your financial goals and personal preferences. Using a professional short-term rental management company will certainly take the operational strain and hassle out of your experience, and the right partner making it a high yielding activity that frees up your personal time.
Want to know more about multichannel management? Contact Lavanda today so that one of our short-term rental experts can answer any questions or concerns you may have.