The vacation rental industry has seen tremendous growth in recent years due to increased demand from travelers. To meet this demand, there has also been an increase in the supply of vacation rental homes and new homeowners entering the market. In an increasingly competitive industry, understanding your target audience and how to cater to them is more important than ever.

In this article, we’ll analyze strategies for balancing operating costs while delivering an exceptional guest experience. You’ll also find tips for how technology can help streamline operations and drive personalized upsells for better return on investment (ROI). Whether you’re an Airbnb host, real estate investor, or property management company, there are learnings here for you to help boost your rental income.

Identify your target audience

By understanding your main guest types, you can provide a guest experience that’s better aligned with their needs and expectations. You can also enhance their stay with personalized touches, which we discuss later in the sections on upgrades and customer delight.

Here are six common guest types and how the guest experiences they look for can differ:

• Families: Families with children often seek properties that are safe, spacious, and equipped with child-friendly amenities. They might appreciate cribs, high chairs, games, and secure outdoor spaces. They’ll want nearby family-friendly attractions and related dining options.
  
• Couples: Couples might be looking for a vacation home with cozy decor, secluded outdoor spaces, and opportunities to combine peaceful walks around town centers with romantic dining options.
  
• Digital nomads or business travelers: These guests prioritize convenience, efficiency, and connectivity. They look for comfortable workspaces, high-speed and stable internet, and perhaps a coffee machine. They may also want information on local co-working spaces and convenient dining options.
  
• Adventure seekers: Adventure seekers value expert knowledge of the local area, they often want specialized equipment, and may also be interested in tours or experiences like hiking, biking, and water sports.
  
• Eco-conscious travelers and vegans: These travelers look for vacation rentals that engage in sustainable practices, such as recycling, electric vehicle charging, and using energy-saving appliances. They also look for organic products and vegan-friendly furnishings.
  
• Luxury seekers: Luxury seekers want premium service and high-end amenities. Think plush linens, designer toiletries, gourmet food options, and concierge services.

Tailor your brand, guest experience, and marketing to that audience

After identifying your target audience, the next step is to tailor your brand, guest experience, and marketing strategies to appeal to them. A well-defined brand can set you apart from competitors and create a memorable experience for guests at your vacation property.

Branding and Marketing Examples:

1. Outdoorsy Retreats: For properties targeting outdoor enthusiasts, highlight activities like hiking, fishing, and kayaking. Use rustic decor, outdoor fire pits, and easy access to trails to enhance the guest experience. Your marketing materials should feature stunning outdoor photos, adventure packages, and testimonials from past guests.
   
2. Eco-Friendly Homes: Emphasize eco-friendly materials, fully equipped kitchens, and proximity to vegan restaurants or farmers' markets. Your branding could focus on sustainability, showcasing features like composting, organic toiletries, and plant-based meal delivery options.

Seasonality Considerations:

Adjust your offerings and marketing based on your market and the season. For instance, promote ski lodges in the winter and beach houses in the summer peak season. Optimize your listings by updating photos to reflect seasonal attractions and activities. Offer seasonal packages, such as discounted lift tickets in the winter or boat rentals in the summer, to attract guests year-round.

Real-Life Listings Optimization:

Analyze successful listings on booking sites like Airbnb, Vrbo, and booking.com. Notice how top properties use professional photos, detailed descriptions, and guest reviews to increase bookings. Incorporate similar strategies into your rental listings, such as highlighting unique features, providing local area guides, and encouraging guests to leave good reviews.

Implement dynamic pricing strategies

Your nightly rates have an obvious and direct impact on your occupancy and monthly income, but adjusting them manually to remain competitive is complicated and time-consuming.

With pricing tools as part of your tech stack, though, you can save yourself time-intensive work, avoid costly mistakes, and ensure your pricing strategy more accurately reflects the market’s fluctuating market conditions.

Automation tools process vast amounts of data in real-time, adjusting your pricing to demand, competition, seasonality, and other key factors without your direct involvement. This helps you optimize rental rates for profitability and occupancy without the need for constant manual oversight.

Three pricing solutions you should consider are:

• Beyond Pricing
  Beyond Pricing analyzes real-time market data to provide dynamic pricing recommendations. It integrates with numerous booking platforms and PMS, offering a user-friendly interface and automated pricing adjustments.
• PriceLabs
  PriceLabs offers customizable pricing strategies by incorporating market trends, demand patterns, and individual property characteristics. It features extensive market data analysis, dynamic pricing recommendations, and broad integration capabilities.
• Wheelhouse
  Wheelhouse provides data-driven pricing tools that tailor recommendations to property attributes and market shifts. It offers a comprehensive set of features including market forecasts, competitor analysis, and customizable pricing controls.

Deliver the highest standards of cleanliness and maintenance

Your business runs off of 5-star reviews. Maintaining high standards of cleanliness and maintenance is crucial for guest and property owner satisfaction, positive reviews, and repeat bookings. Guests expect a spotless environment, and meeting these expectations can set you apart from competitors.

Importance of Cleanliness and Maintenance:

• Reviews: Cleanliness is one of the most critical factors in guest reviews, directly impacting your occupancy rates. Positive reviews can boost your visibility and attractiveness on listing sites.
  
• Guest Experience: High standards ensure a pleasant stay, leading to repeat guests and word-of-mouth referrals. Guests are more likely to return if they have a positive experience.

Strategies for Maintaining Cleanliness and Maintenance:

• Regular Inspections: Conduct regular inspections to identify and address any maintenance issues promptly. This helps prevent minor problems from becoming major issues.
  
• Professional Cleaning Services: Hire professional cleaning services to ensure your property is thoroughly cleaned between guests. This includes sanitizing high-touch areas and maintaining a pristine environment.
• Maintenance Schedule: Implement a regular maintenance schedule to keep your property in top condition. This includes servicing HVAC systems, checking plumbing, and ensuring all appliances are in working order.

Develop remarketing and direct booking strategies

Remarketing involves targeting previous guests or visitors to your website with ads and promotions to encourage them to book again. This strategy helps you build a loyal customer base and reduce reliance on third-party platforms.

Direct bookings eliminate third-party platform fees, increasing your profit margins. Direct communication with guests allows for personalized service and upselling opportunities. You can offer customized packages, early check-in, or special amenities.

Remarketing Strategies:

• Email Marketing: Collect email addresses during the booking process and send regular newsletters with special offers, updates, and local events.
• Social Media Advertising: Use social media platforms to retarget previous guests with personalized ads. Highlight new features, upcoming promotions, and guest testimonials.
• Google Ads: Implement Google Ads remarketing campaigns to reach potential guests who have previously visited your website. Use targeted ads to bring them back to your site and encourage bookings.
• Loyalty Programs: Develop loyalty programs to encourage repeat bookings. Offer discounts, free nights, or exclusive perks to returning guests.

Use technology to create personalized upsells based on guest types

Strategic upsells aren’t just an avenue of additional potential revenue—they can significantly enhance your guests' stays with personalized options that cater to their interests and needs.

Here are some examples of how to upsell based on the different guest types discussed earlier:

Breezeway Upsells is designed to enhance your guests' experiences and increase your revenue. With Upsells, you can seamlessly offer personalized services and experiences to your guests, all from the Breezeway platform.

In hospitality, timing is everything. That’s why Upsells includes automated notifications to ensure you never miss a chance to delight your guests. From pre-arrival reminders to in-stay alerts and pre-departure incentives, our system keeps you connected with guests throughout their journey, presenting enticing Upsell opportunities at every stage.

The right offer at the right time can make a huge difference! Here’s a quick guide:

• Pre-booking: Include upsell options during the initial booking process, such as early check-in, late check-out, or a welcome basket. This will set you apart and make your listings more attractive.
• Pre-arrival: A week or two before arrival, remind guests of upsells they might want, like airport pickups or grocery delivery. By now, they might be ready to make these additions.
• Upon Arrival: Present upsell options when guests are excited about their stay. This could be the perfect time for them to consider additional services.
• During the Stay: Pay attention to your guests' needs and preferences. In a friendly and non-intrusive manner, offer suggestions like late checkouts or local experiences.
• Extended stays: Where you have gap nights in your booking calendar, there’s an opportunity to reach out to guests before or during their stay to offer them an extra night at a discounted rate.
  

Boost rental revenue with targeted strategies

During the pandemic there was a surge in demand for vacation rentals - as people fled the cities looking to have their own space, fast WiFi, and longer stays, Airbnbs were the perfect option. With low interest rates in 2020, more people could afford to invest in real estate or second homes as rentals. However now in 2024, the supply of rental homes is still high, but demand from renters has decreased.

While this boost during the pandemic benefited the vacation rental industry in terms of awareness, investment property and vacation rental owners who bought in at that time are still expecting the same passive income and cash flow from the 2020 rental market.

In order to justify management fees, vacation rental managers need to be strategic about their target audience, guest experiences, dynamic pricing, direct booking, and personalized upsells. By following these steps, you can turn your vacation rental properties into a profitable and sustainable business, ensuring a steady stream of vacation rental income and satisfied guests.