How to Achieve Longevity In a Crowded Airbnb Marketplace
Since the pandemic, more people have embraced running their own short-term rental. It’s led to an oversaturated market, never seen before on rental platforms. How can you keep earning with so many competitors?
In what were once predictable markets, hosts are now scratching their heads and scrambling to fill empty rooms. Sure things — bookings in summer, guests staying when there is an event in your area etc. — are now highly competitive, with many rooms and homes left empty.
But here’s the thing. Although there are so many more options flooding the market, not all of them will survive. Why? Because many will not be doing the necessary ground work to future-proof their side-hustle (or, like in my case, main source of income).
It is possible for your vacation rental to gain and sustain longevity with an overcrowded supply of accommodation. You just need to be smart about it and think long-term.
“The majority of my guests are return guests”
It is winter here in Australia, where I am based. It is peak winter season. My place is opposite the beach. Yet, whilst so many holiday-makers have chosen to vacate to the snow (yes, we have snow and ski resorts), my place is 92% booked. How? The majority of my guests are return guests.
What I did:
From day one I decided to incentivize people to come back. I got postcards made up that I left in my villa, on them I had “return guest deals”. You can break it down any way you want, but when I was first starting out, I gave people 15% off to book with me directly and they would also receive a free bottle of champagne. My rates were already competitive when I started to get my place up and running, and attract guests — so my discount was a pretty sweet deal. And you know what? It worked.
From that first campaign in 2017, I still have the same families and couples stay at my place, even though my rates and deals have changed. I get the postcards updated every year to attract ‘new’ return guests. And as my place grew, became more popular, and I built up and sustained my high rating, I was able to shift the deals to make sure I was making more of a profit. At the moment, it is:
return for 2 nights and receive 10% off.
return for 3 nights or more and receive 12% off.
return for 7 nights or more and receive 15% off and bottle of wine.
Why?
This way I am not just incentivizing people to come back, but to stay longer. My commission on booking.com is 15%, so having a guest book directly with me means they can save money and I can make more. If they originally booked on Airbnb, it means they save on fees, as do I. Win-win. Discounting a guest’s return stay tells them you value their business. It makes them feel special, and it helps build a relationship.
This winter my bookings have been 65% return guests. They know my place is cozy in the winter, it makes a nice break, and when the sun is shining it’s still a beautiful spot to walk on the beach, or take a whale-watching cruise. The majority of these guests first stayed at my place in the summer season.
(Thinking of not managing your property yourself? Read this)
Demographics.
“It is amazes me when people are too specific about guests they want to stay at their place.”
The other crucial thing to do is embrace many demographics. This is something you can do immediately. If you are focused on one specific group of travelers, then the quicker you can embrace all or most, the sooner you will be able to book more nights.
It is amazes me when people are too specific about guests they want to stay at their place. Sure, it’s great when things are going well, but when the market is oversaturated? You need to be able to pivot, and fast. For example, there have been many successful Airbnb's specifically aimed, designed, and marketed for bachelorette trips. Which is awesome. If you have that demographic as a primary source of guest, go for it.
The problem? It has been so successful for people that many owners are doing it now, making the competition quite tough. The people who will succeed, will be the people who can embrace more types of guests — and guests who want to stay through the week, not just on a weekend bachelorette trip. Be flexible.
How crucial is embracing multiple demographics? Read more about it here.
Be generous.
This just doesn’t mean with gift packs and supplies (which are crucial to be a top competitor), but with time. Have an earlier check-in and later check-out. Do not underestimate how much people lurve this! My main competitor has a check-in of 2.30pm and a check-out of 10am.
Mine is 2pm — 11am. It is a minimal difference but an extra one and a half hours is generous and people remember. It can also make people book your place. In the summer I was about to book an Airbnb— until I saw their times. Arrival was from 4pm and check-out was 10am. I didn’t book.
“Many hotels will not permit bookings beyond the next 12 months. Extend your calendar and do your rates — and you will be one of the only options available to book.”
Get ahead! Most platforms allow you to set how far in advance a guest can book. Owners and managers tend to focus in the current time they’re in plus another three months, forgetting that many people book their vacation in advance — especially with weddings. If your calendar on your platform isn’t set too far in advance, you’re going to miss out on bookings, especially from overseas guests who plan their trips far in advance than most local guests.
The best part? Many hotels will not permit bookings beyond the next 12 months. Extend your calendar and do your rates — and you will be one of the only options available to book.
What are your thoughts? Has your area become oversaturated?
