Should you obsess over occupancy or profit margin? Balance your income goals with value creation for your guests.
○ High hopes for high profits will kill your bottom line. When you are on the moon, but need to come down to earth with pricing expectations...
○ Shooting for totally occupied here is the issue with trying to maximize revenue this way
Less turnover time so you will have a worn down, beat up vacation rental
Your cleaners and maintenance staff will hate you and think you are crazy
(you are keeping them employed, but are constantly doing mission impossible and your guests won’t be thrilled)
1. Think of someone smoking or bringing a pet and then another guest checking in with allergies / high maintenance
Pricing tends to be lower you will have more parties and groups that will put wear and tear on your place for sure
Replacing broken items and furniture will wipe out any value creation you thought you would get from pushing occupancy so hard
○ Balanced approach to pricing - set your rates to attract your ideal guest i. Premium rates because your place is super nice - you will be less
occupied, but your margins will be higher because you are charging more. Think about a fancy restaurant or the four seasons or a nice cruise ship -
not fully booked but they are making money vs carnival cruise which is
fully booked but is a party every night...different goals
Market rates with discounts and promos for last minute, veterans, AAA,
seniors - I have seen these homes do well 10-15% Return rates
Low cost leader - can make money, however these places look and feel
nasty unless your operations are top notch and highly efficient. You will get bookings, people love cheap stays, but this is like renting homes in an area without a lot of crime. Higher return, more headache, higher risk.
○ Don’t obsess over occupancy, instead obsess over operations and running a great business, delivering value for your guests throw getting things right
Obsess over the details that matter
Make sure you are including the amenities and supplies you promised
Get local, offer local recommendations to eat and play
Be attentive and personable
Underpromise and over deliver. They didn’t ask for flowers upon checkin
or some snacks or a gift basket, but you delivered. They came for their child’s birthday - get some balloons. Over deliver, it will show in your reviews and people will come back for more and more.