Over 1500 key exchange locations nationwide
5 Short-Term Rental Strategies to help you fight inflation and the economic downturn
In the last 12 months, inflation has been rising globally, and we’ve experienced both the United Kingdom and America being hit severely. As a result of this rapid growth, property managers are now faced with having to respond quickly to cost fluctuations. With energy prices affecting everything else in the market, we may (unfortunately) still be at the beginning of a big price shift in the hospitality industry.
Some short term rental managers may be able to absorb these new prices and continue running their business as usual, but others will have no choice but to increase fees charged to guests via higher nightly rates.
Since 2019, the ADR (Average Daily Rate) in the US and UK markets went up by an average of 31% (source: Airdna, The State of the U.S. STR Market).
We have assessed and written down a couple of recommendations for short-term rental managers and Airbnb hosts, and hopefully, these will help you to prepare and fight the current situation.
Optimise your operations and property management costs
Review your current tools and software that you may use less frequently (non-core to current operations). Visit pages that allow you to compare prices of online tools and see if other companies can offer you a similar service with a better price deal on CRM, email tools or contractor management platforms.
See if you can switch to more efficient ways of operating your business. If you’re currently doing the check-ins via meet and greet or invested in an expensive smart lock, you may be able to save up to 80% on the cost of your key management.
KeyNest lets you manage the check-ins and key drop-offs remotely, with your local shop or cafe acting as a safe point of contact for the guest or contractor receiving or leaving the keys there with the shopkeeper. Since you don’t have to commute to meet the guests and cut the costs of costly electronic locks, every single check-in would be saving you money. What’s more, you would be able to offer extended check-in hours - which is a major benefit that business travellers look for. Click here to find out more.
2 . Reconsider your overall strategy for pricing short-term rentals
Big data companies predict that the recession will not have a significant impact on travel. People will continue to travel but differently, they'll do so with more careful consideration of how much it'll cost them and what sorts of deals are out there for them.
So start with calculating how much each reservation costs you - that is your marginal cost per booking. The absolute basics to ensuring profit for every single booking include making sure that your prices cover the expenses of having a guest stay overnight.
And while this sounds like common sense to some, there are other ways of reaching profitability besides simply hiking up prices - so what should they be? To get more ideas about it, the most reliable way is to speak with other hosts or short-term rental managers. Go to your local meetups, sign up for zoom networking events or just call a friend who also works in the field, to explore what else could be done.
3. Sustainability is the key in 2022/2023: to attract new guests, make sure you can offer an experience that doesn’t leave much of a carbon footprint
Today’s conscious holidaymakers are demanding customers who make a conscious effort to do things in a sustainable manner while they're on vacation. They want to know how you've gone about reducing your carbon footprint - which sets you apart from those other holiday homes.
According to this TravelPulse report:
“6 in 10 travelers are willing to pay more to companies that demonstrate more environmental stewardship.
27% said that they would pay between 1-5% more, and 22 % said they would be willing to pay 6-10% more to companies demonstrating environmental responsibility.
Younger generations, those with children and those with higher incomes are the groups most willing to pay more to companies that are environmentally friendlier.
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4. Adjust the marketing radius to cater to more local guests
With fuel prices rising, travellers are keen to focus on finding more local destinations for their holidays, especially for a group or family holiday (in which the difference in travel costs gets visibly amplified). What it may mean for you is that your ongoing marketing campaigns may need revisiting - if you’re currently advertising nationwide, focusing your budget and efforts on a more limited radius, and highlighting the local aspect of your property, may help in bringing more traction and bookings.
5. A cost-free expansion of your services portfolio helps to grow revenue
Think about expanding your current extra services and options offered to guests. Upgrades offered with your current offering are generally simple to add and don’t carry an up-front cost of any kind. These would mostly be partnerships or affiliations built between your business and other service providers.
Do you offer freshly cooked breakfast and coffee delivery from your local cafe? (speak to your local cafe if they would be willing to partner with you on this and deliver)
What about early check-in or late check-out? (KeyNest helps here)
Is extra apartment cleaning offered daily? Just call your cleaning company to check if they are flexible enough to offer a last-minute request.
The next year won’t be an easy one for the Short Term rental providers - but with a focus on cost control, pricing flexibility and openness to innovation and new tools, you can give your business a fair chance to thrive in these difficult circumstances. If you’re looking to speak to someone about the way to cut your operation costs, start with the lowest-hanging fruits, like optimising your check-ins and reducing the cost of operations.
About Us:
We’re KeyNest and we help Airbnb hosts save money on their check-ins and key exchange with guests and contractors. If you’re keen to give a try to less-time consuming solution than the meet and greet or want something more transparent and safe than key safe (=key lockbox), find out how we can help you here. Our plans start at £5.95.