Are you looking to start your own vacation rental business? Or maybe you already run a short term stay company. Whatever the case, this information is vital for you to keep focus on the things that actually matter. This is what I learned from running our own company, that (for 90% directly) rents out over 3500 villas with private pool on the Spanish coast. I hope it benefits you.
If you are running a vacation rental business, it is easy to get overwhelmed. There are just so many things to think about. In my company I´d like to think we are the grease in the machine. We have our thousands of owners, our various business partners and of course the tens of thousands of guests. And all of these have expectations and demands that need to be met.
It´s easy to lose focus. I know. I have been there. But what I am explaining in this following video always kept me on track.
Your Vacation Rental Conversion Funnel
Every business has a sales or conversion funnel. And you personally are in several funnels now. Do you receive promotional emails? Do the ads from Booking.com keep following you around wherever you go? That is their sales funnel. What is yours?
In this video I concentrate on getting people to book a vacation rental, but you can also have a funnel for the process of signing your owners. Or a funnel to convert your guests into repeat-bookers.
You can measure the result of your funnel by the percentage of persons that you can turn into actual guests and keep them coming back.
You can measure Macro conversions (actual bookings) and Micro conversions (an email address gathered or enquiry send in for example). By tweaking (the right) elements of your conversion funnel, you can dramatically increase the outcome that you are looking for.
Under the video you will find the transcript in case you cannot watch the video now.
Your Conversion and Sales Funnel
Hey, business people. Hey, let's have a look at the conversion funnel, the conversion rate and how this can help you and your business making money.
I made a sketch of a web shop, but it can be any other shop. Also a physical store or any other company. So this is a website. There are ten people coming to the website. You ask a lot of stuff of them. And in the end, you have three paying customers. They come out here in the bottom part. So these ten people are going into the conversion funnel.
You Are In A Sales Funnel
You might not realise it, but you at this moment, you physically you are in conversion funnel. Your email is circulating around and in it's programmed that in five days you will get another e-mail from a certain company that sells tickets or Booking.com or I don't know. So you are already in some conversion funnels and you might not even realise it.
So people come to your website. What do you ask of them? You ask that they navigate your web. Maybe they want some information. You want them to search. You want to find that offer. Then they will probably compare the offer. They must agree with your terms and conditions. And then you want them to pay.
Bucket With Holes In It
And all the time that this is happening: People are falling out of your funnel. It's like a bucket with holes in it. So people are getting bored or they don't like your terms and conditions. They don't like offer that they see or they don't really understand the website. So they will be falling out. And what you're trying is to get them back in.
Plug the Holes!
How can you get them back in? If you tag them with a with a pixel a you can do re-marketing or you have email addresses of them already or they know you as a as a repeat customer. And then they're already in a bigger cycle which converts them back to the Web site later on.
These friendly party people have been in our Funnel and booked this villa in Spain
The Perfect World
But inevitably people are falling out and the competition is only one mouse click away. In a perfect world: 10 people to the website, will be 10 paying customers here at the bottom. But it really is a perfect world. And I don't know if there's any Web site that doesn't have like a bounce rate. Bounce rate is the first thing that you get. You get ten people come onto your website and some will leave without doing any other action, which might not be what you want.
So and that's called the bounce rate. And a bounce rate can be pretty hefty. It can be up to 20 or 30 percent. So for every person that you paid here to come to your website here on top, you're going to lose a lot of them straight away even though you paid for them. But they didn't do anything. So you have to calculate those costs.
Your Vacation Rental Business Conversion Rate
So inevitably, you have people falling out. And then in the end, you have to paying customers. The rate in percentage of the people that you put in and the people that come out as paying customers. That's called the conversion rate. So in this case, you put ten people in. You get three people out is 30 percent conversion rate. That's a pretty good conversion rate, probably a niche website or some very highly motivated buyers.
If you get the three people, you do that times the euros that they spend. Times that the frequency that they actually book with you. That will bring you to the customer lifetime value. And if you look at the customer lifetime value, that's an important number.
Customer Lifetime Value And Ad-spend
If you get a net profit from that, that has a big relation in how much money, can you spend and all the other costs of your company, how much money can you spend in getting people to your website?
So this is the schematics of the conversion funnel and the conversion rate. So how can this help you in your business? Well, you have to combine it with the 80/20 that I told you in another in another video:
The 8020 video mentioned
An Example: Repeat-bookers
Not every person in every scene of buying behaves in the same way Like this persons here be. Within those 10 people are repeat customers. And these repeat customers have bought with you before. So they already know your terms of conditions. They already know what offer you're going to have. Probably if they come to your website, they're not going to bounce. So all in all, the probability that they buy from you again is a lot higher. So it's easier to make three repeat bookers or repeat customers into paying customers again. Those are different: They're easier to convert.
And then maybe you have leads from Facebook. They also come onto your website and those people that they might be a lot harder to convert. Because there's a lot of clicking going on on social media, but not necessarily a lot of buying.
So if you combine that: They come onto your Web site. 80 Percent of the people that come into your website will see only 20 percent of your web pages. So if you want to optimise something: Have a look at the pages that are most important, that get the most visitors, optimise those. And make sure you measure the results, because those will have the greatest effect on on the improvement of the conversion funnel. So make this wider. So in the end, you have a lot more people here.
Conclusion
So combine the Conversion Funnel with the 80/20 principle and you're sure to make a lot of money with your business. I hope you enjoyed this video. See you in the next one.
Wherever you advertise your vacation rental property, you will need to describe it. And the right vacation rental description turns ´Lookers into Bookers´. Want to learn the easy to do yourself ,´proven to work for thousands of bookings´ Tips for writing a killer description?
The Tips for ´How To Describe Your Vacation Rental´are:
Keep Your Goal In Mind: Write For Your Guests
Describe The Picture
Use Emotion
Mention Your Unique Selling Points
Always Tell The Truth
Keep It Short Enough
Your Headline Matters
Use Persuasion
Mention A Call To Action
Looks Great! Let´s Get It Booked! Improve Your Vacation Rental Description!
So you decided to rent out your vacation home! Great! Congrats! There are a lot of factors that influence the amount of bookings your property will get. Unfortunately some of those are not under easily your control. Just to mention a few:
The location of your property
The view
The area
The number of bedrooms
The number of bathrooms
The capacity of your property
BUT….The good news is that there are also things you can do yourself that greatly affect the amount of money you will make in a year. It´s time for some proper Old School Marketing!
If you are looking for the most important things you can do to increase your bookings are (and these have been supported by thousands of reservations per year in my company):
Have Great Reviews from former guests (reviews are still getting more and more important to guide vacation go-ers to their next destination. Good reviews deliver the ´Looker´ the social proof their are looking for. Most people are risk averse so they choose a property where people have had a fantastic experience before. That increases the chance that their stay at your property will be fantastic as well. That is why a property without reviews is had to get booked. You might even want to lower the price in the first year, just to get reviews for the second year.
Take Amazingly Seductive Pictures. Read more on Vacation rental Photography here. This is the first thing your potential guest will do. Because it is easier (takes less calories) to scan pictures than to read text and our brain is sometimes still in the Stone Age. Nowadays most people take pretty decent pictures of their vacation rentals, so you might need to step up your game with Video and a 3D Virtual tour. Anything to make your property stand out, right?
Write a Stunning Description of your property. Even though the first step of your potential guest will be ´scanning the pictures´, prospective guests will read (or at least scan over) your description before handing you over their hard earned money.
Let´s focus on the description for now! Here are some tips that will make help you write a review that your potential guests cannot resist.
1. Keep Your Goal In Mind: Write For Your Guests
Look, you are not writing an essay or some boring piece of legislation. You are trying to convert potential guests into actual guest. So your whole goal, plan and type of writing should keep that in mind.
What mood are your readers in? Probably happy with anticipation. That is the great thing about renting out a vacation property: It is a sexy business and your clients are looking forward to having a good time. Let us make use of that frame of mind.
It might be that they are a bit scared. Scared by the (few) stories writing about scammed vacation go-ers that did not have a place to stay at arrival in a strange place. It can be that they are scared of paying online.
They can be scared because the family has charged them to come up with the right vacation house. That can be felt as a huge responsibility. So you might want to take away those fears. It is good to try to take away those fears.
But mainly they just want to read a confirmation of the things they saw in the picture and get even more enthusiastic about your property.
2. Describe The Picture
The reason that pictures are so much more convincing that texts, is because we (as a human species) have been looking a lot longer than reading. But we humans have a special gift.
Not only can we see with our eyes (our actual sight), but we can also see with our mind: Visualisation.
And that visualisation you know already when you have read a book. The author uses your creative imagination to paint a picture for you to enjoy.
And you can do the same. Describe a scene in which your guest is the Hero in their own story. If you do this right, they will even feel it!
The way we have done this in our texts: ´Just imagine…..you and your loved ones walking in the warm sand of the Costa Brava beach while you see and hear the kids enjoying themselves in the sea´ You get the point.
See, feel, hear, smell, taste…….describe the scene
3. Use Emotion
To amplify point 2, use emotion in your text. Describe what your guest will see, hear, feel, smell and taste. Describing in this way will make it even more real for them and thus easier to paint the mental picture.
Done in the right way all this (imagined) input of the senses will lead to emotions. The brain can hardly make a distinction between actual reality and the imagined reality. Just remember:
Potential Guests Will Rent On Emotion And Justify With Logic
Zig ziglar with a vacation rental twist
4. Mention Your Unique Selling Points
This is a no-brainer. You have to tell people what is soooooo good about your property.
What makes your property, villa, home, house, location…..Unique!
Some times, when you have been living in the home yourself it might be more difficult to describe. You are already used to the sea view, the swimming pool, the sun 300 days a year.
Just imagine that somebody else is looking at your property, what will they appreciate about it?
While doing this, try combine Features with Benefits.
Example not to do:
´This villa is situated at 850 meters from the beach.´ (Feature)
Better:
´This villa is situated at just 850 meters from the beach, so you can easily walk with your kids and older kids can go alone´ (Feature combined with Benefit)
Do you have large bedrooms, mention it. Do you have state of the art kitchen appliances? Mention them, even with brand name if it is significant.
Make sure you mention the USPs of the surrounding as well:
´Just a 4 minute stroll from the San Francisco Fisherman´s Wharf!´
5. Always Tell The Truth
Ok, I hesitated to put this one in, as it seems so obvious. As in all things ´Good business´: Tell the truth. Not telling the truth is the best way to mess up your guests´ experience and your review….that means your business.
And it´s just bad. That is why our company offers the 100% Satisfaction Guarantee. If the description or pictures do not match the reality, our guests can get a 100% refund of all money paid.
6. Keep It Short Enough
Weel congratulations, you have made it this far in this post. You have beat thousands of people before you who did not come this far!
It is true, nowadays we have too little time to read all the content we see. Your description needs to be short and scan-able. People who will actually book your property will probably read your whole text. But why make it hard on them?
Especially when around 80% of the vacation rental website users will orientate on a mobile device, make sure they do not encounter a wall of letters and words. That only reminds them of ´school years´ and few people want to be reminded of that time in their lives.
I think this quote says it best:
A Vacation Rental Description should be like a woman’s skirt: long enough to cover the essentials and short enough to keep it interesting.
Winston Churchill with a vacation rental twist
7. Your Headline Matters
That has a lot to do with the previous point, but is still worth mentioning.
Almost everybody will read your headline and it will probably be featured in the search results of any website you advertise your property on.
The title will possible also be the line that Google mentions in their search results for your property page. It is called the Meta Title.
The function of the headline is: Get people to click on your ad!
So make sure that it summarises the best points of your property in 1 line of about 60 characters.
´Breathtaking Sea View From Modern Luxury Villa w. Pool´ will do the trick!
Imagine YOU being HERE!
Use Persuasion
Ever heard of Robert Cialdini? He wrote the interesting book ´Influence´ in which he studies what influences us in our decision making. while we might not even be aware of it. The main points that he discovered and writes about are:
Reciprocity
Scarcity
Authority
Consistency
Liking
Consensus
Watch this short video about Influence
You can use (just a bit) of these techniques as well in describing out vacation home:
This amazing villa has been one of the Top Sellers year after year. (Social Proof). It has proven to fully book early, easily and quickly. (Scarcity)
I used ´authority´ in this article as well, mentioning my own company and how these techniques have proven to work for thousands of bookings. Funny heh?
Get creative, but don´t overdo it. You do not want to sound too salesy and put people off.
9. Mention A Call To Action
Remember point 1? Remember why you are writing this description? You main goal is to turn potential guests into guest.
So, do not just tell them that your property is great and why they should rent it and leave it at that.
Like all advertisement: Tell what action the vacation go-er should take next.
´Do not hesitate to contact me if you have any questions. I will always reply within 24 hours, but most times a lot quicker´
´If you want to relax this summer, just book this property while it is still available.´
An Example
How do you like this part of the description for the vacation villa Leyla on the Spanish coast?
Welcome to Villa Leyla, your luxurious private holiday home close to Lloret de Mar!
This villa offers you all you need to enjoy a holiday with your friends and family: a private swimming pool (34m²), breathtaking sea views and privacy for several families or groups of friends.
Can you already picture yourself on the terrace enjoying a glass of wine or beer, while the children are playing in the pool? And how about reviving memories with your friends or creating new ones whilst enjoying a delicious grilled meal?
I can imagine you have a lot of things on your mind. This vacation rental is not really a passive investments, is it? But do not worry, it is totally worth it.
And although there are a lot of specifics that do affect your vacation rental income, some of those you cannot change. Writing a killer description for your vacation rental is not one of them. This is something you can easily do yourself.
Not a very skilled writer? Ask around in the family if there is anyone with talent or even hire a professional. There are a lot of writers on the internet that can help you out in a heartbeat. This service is easily worth the couple of bucks it will set you back. Well worth the investment.
Get control of your vacation rental income and sky rocket your return on investment. You can do this!
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We all dream about having Multiple Sources of Passive Income, but do Vacation Rentals qualify as a passive source of income?
Vacation rentals can be a passive source of income, but you will pay a hefty commission for all the work that needs to be done by others. Very broadly you will have to pay for 3 things:
Advertising and securing the actual booking
Looking after your guests
Maintenance of your vacation rental
The Investors Walhalla: Passive Income
Ever since reading ´Rich dad, Poor dad´ by Robert Kiyosaki, this quote has stuck in my mind.
The Rich Do Not Work For Money!
Robert kiyosaki
And if that did not convince you, this is what Warren Buffet (one of the wealthiest people alive and very very successful investor) said:
If you don't find a way to make money while you sleep, you will work until you die
Warren Buffet
The expert are all clear on the subject: Make sure you have several sources of passive income to cover your expenses and you are financially free! Not have to work anymore, unless you really feel like it.
A great goal to strive for.
Investing Is A Great Idea, But…..
You have to have money work for you and pay you a return on your investment. The stock market is a common vehicle for doing that. And of course Real Estate. There are lots of ways to investing in real estate, the most common sectors are:
Commercial real estate
Residential real estate
Land
And then there is the sexier option: Vacation Rentals.
Have a luxury villa with private pool and sea view near the beach to enjoy with your family AND make money? Great! I´m in!
Is it really possible to make money with Vacation Rentals?
It is absolutely possible to make money with vacation and short term rentals. Home owners do it all over the world and it is now more popular than ever to rent a vacation rental property for your next holiday. Vacation rentals share of travel increases year over year.
2020 Could very well be the first year that the vacation rental market trumps the hotel market. Yes, it is that big.
Vacation Rental Market is Huge
…..Are Vacation Rentals a Passive Source of Income?
It all depends on your definition of Passive Income.
If you mean: Buy it and forget about it…..No.
Buying a residential rental property for long term renters is certainly more passive than a vacation rental.
What Work Is Involved?
The work involved can be categorised in 3 facets, The actual rental of your Vacation Home, the contact with upon arrival and during the stay of the guests and maintenance.
Renting Out Your Vacation Property
There are 2 ways that you can do this:
Take care of it yourself
Have other people do it for you
Renting Out Yourself
Nowadays it is not so complicated to list your vacation property on one or more of the bigger short term rental platforms like Airbnb, Booking.com, Expedia, Homeaway or VRBO. These are the biggest players on the market right now and they all work with a ´commission on booking´ model. The fee you can expect to pay is on average 15%.
Even after you have listed your property, you will have to:
Communicate with guests. The sooner you reply to their requests, the better for your ranking in the search results
Stay up to date with all the changes that the platform makes, like new Terms and Conditions
Active price management
It´s not so bad when you have 1 short term rental property, but when you have several it kind of adds up.
There is software available that connects your vacation home(s) to several of these platforms. That makes the management easier, but of course these come with either a fixed costs or a commission on a booking.
You can also hire an agency to manege the above tasks. They are professionals and will have constant focus on optimisation of the presentation of your property.
Most of the time these agencies also have a website of their own and will generate direct (without involvement of the OTAs, Online Travel Agencies). That is ideal as that spreads the reach of your property and lowers your dependance on the OTAs like Airbnb. Read more about that here.
You can expect an agency to charge you 10 to 15 percent per reservation for these tasks.
In either case you will have to find multiple new guests every season and year.
Guests Check In and Service
When the guests arrive, they will appreciate a check in . And even if your guests arrive and find the keys in a key locker (very common nowadays), you will have to provide a point of contact in case of emergencies for the guests.
Again, you can either do this yourself or pay a service company to help you out. Most of the times, local vacation rental agencies can also take care of this for you.
You can expect to pay another 10 to 15% commission on your booking for these services.
Who is maintaining the pool and garden?
Maintenance Of Your Property
Of course when your guests arrive, they would like to find your property well taken care of:
Clean house and arranged
Clean and fresh linen
Garden maintained
Pool maintained
Again you can do this yourself, but with several properties that may be too much work.
The costs of this service depends on a lot of factors, like the costs of manual labor where your property is located and the size of the property. Of course the property will also need regular maintenance, like painting.
Another consideration is that when you are renting out long term, the utilities are charged to the renter. With vacation rental, the property owner usually pays for the utilities.
Conclusion
It is possible to rent out your vacation home passively, but there will be extra expenses that can run up to 25% of the booking sum and new guests will have to be found each year. If your property is in a desirable location, you can still expect to make a good return passively.
If you choose to rent out and manage your property yourself, it is not a passive investment at all.
So why are vacation rentals so popular?
Renting out Short Term is popular, because you can also use the vacation home for your own stays and family outings. That is just great: You can make a return on your investment and improve your (and your loved ones) life style.
If there is one thing that you can easily do to increase the bookings for your vacation rental, it is upgrading your pictures. Only the best pictures of your vacation rental will do. You will not believe the impact it has on your nights booked, your vacation rental income and of course your profit. You can easily double your income. Let me share some tips that you can implement right now on how to do it!
We will be covering:
8 Tips For Making Best Pictures To Increase Your Vacation Rental Income:
Look Through The Eyes Of The Guest
Make The Picture, Don´t Take The Picture
Let there be light!
Pick a low oblique angle
Show everything
Show The Surroundings
Make A Video or Virtual Tour
DIY or hire a professional?
You Could Be Here! Make the best vacation rental pictures!
Look Through The Eyes Of the Guest
This step is often overlooked by homeowners, but it is essential. It seems to them that taking pictures is just a part of getting their vacation rental property on a website and that is it. But did you know that this is possible the most important factor in getting your home booked?
With our pictures we try to convince people (potential guests), who do not know or trust us, to book and pay in advance for a place to stay before ever having been there themselves.
That´s is still a huge step. Even in this ´we are used to buy online´- world. It´s only natural that our potential guests want to feel secure that they are making the right decision. It´s even worse when your potential guest has the responsibility of booking a property for a larger group or a special event like a wedding location.
So it is important that we visually answer all the questions that they might have. Questions like:
´Can we all eat comfortably at one table outside?´
´Are there enough closets for our wardrobe?´
´Can the kids safely play in the pool?´
´Will we have privacy in the garden?´
Just think: ´If I would have never been here before, what would I like to see?´
´Make The Picture, Don´t Take The Picture´
Ansel Adams said it best with this quote.
We call it ´staging´ and it is crucial. Always, always, always stage your pictures.
So there is a difference between ´staging´ and ´lying´. Of course you should not take pictures with a 100 inch tv screen, only to replace it with a 42 inch screen before the guests arrive. That is a sure way to destroy your guest experience, your reviews and ultimately your revenue.
Highlight all you want to show and hide all that you don´t want seen. There is a whole ´beauty and cosmetics market´ that thrives on that. It´s called marketing.
Staging your Vacation Rental Home
How To Stage Your Vacation Rental for Pictures
Take away all your personal belongings like your wedding and family pictures. Guest would like to see the location as their own and not be reminded of the people that usually live there.
That also goes for your clothes, hide them in the closets.
Make sure the place is clean. It can really show in pictures when a property is not clean
Make sure there are no people of animals in the pictures. Sometimes owners send us their own pictures with the dog walking around the living room.
Make the beds like you see in hotels, fluff up the pillows, straighten the decorations. Even though we make appointments with owners for photoshoots for our properties in Spain, and we confirm the property is ready for pictures, you won´t believe the mess we have seen.
In the bathrooms, less is most of the times better. Don´t show toothbrushes. Make sure that what is seen in the pictures, adds to the confidence of the potential guest, not detracts.
Make sure the tv is off and remotes are arranged.
Open all shutters and curtains.
Make sure the pool is clean and spotless
Do anything that makes it easier for the potential guest to visualise their perfect stay: a set diner table, towels at the pool, a book and a coffee mug next to the lounge chair, a lit fireplace
Tip: Right after you have taken your pictures, look at them on a larger screen and evaluate them. Improve right away if needed.
Let There Be Light!
We all like sunlight! We even need it! We have learned to only make pictures on sunny days and even at times that the sun was most advantageous for what we want to show.
There is a big difference between pictures of a pool and terrace in the shadows or in the full sun.
And even though the sunlight exposure will be less of a factor inside, make sure that there is ample sunlight. In addition to the sunlight, turn on all the lights in each room as well.
Some properties show really well at night, but we have experienced that these pictures should be presented only at the end of a series. If you use them as a main picture, your click through rate will be seriously lower, no matter how beautiful the picture is.
Think of it as the opposite of a horror movie. If a horror movie was all bright and well lit up….would it still be scary. No, of course not. And that is what we want for our potential guests: Not to be scared.
Pick A Low Oblique Angle
Take pictures when kneeling. It will look more spacious. Just give it a try and you´ll see. Curl yourself up into a corner of a room and see what shots you can make.
Money Shot! How to take pictures of your vacation rental
We have this technique of getting very low at the corner of a swimming pool and take a picture of the pool in combination with the actual villa: Money Shot every time!
Show Everything
On most listing sites you can show up to 50 pictures and you should.
You don´t know what it is that appeals most to your potential guest. Is it the bathroom? The bedrooms? The outside area? Really, you don´t know.
Just look at every picture as an opportunity to lessen the fear that people have. The more they see, the more confident they will feel in booking your property.
Once they have seen all your pictures, they will have invested time in checking out your vacation home. That will also persuade them to book yours.
Show The Surroundings
Chances are that guests are not staying at your place, just because of your place. Sorry to hurt your feelings, but probably there was something else that attracted them to visit the area in the first place. Most of the times it is not difficult to find out what that is.
Show the surroundings
Villa with private pool near the beach? Include some pictures of the beach and coastline. Just make sure that you mention in the description that it is not the actual view, but a picture of the surroundings.
Apartment in center of Barcelona? Show some pictures of the Sagrada Familia and shopping street Ramblas.
Remind them why they are visiting in the first place.
Make A Video Or Virtual Tour
Even when you have stunning pictures, it can be difficult for a potential guest to visualise the layout of your property. One way to show this is a floorplan.
But who wants to look at an ugly floor plan, when it is so easy to make videos nowadays. Want to make the experience even more real? Include a virtual tour of the property. Check out A Matterport Virtual Tour here.
Now there is no reason for your guests not to book.
Convince your potential guests with a video
DIY Or Hire A Professional?
It´s true, some people are not so good taking pictures. Or just not have a proper camera. And to be honest: Iphone pictures can go a long way, but they are not the same quality as ones made with a decent camera.
If you have read all the tips above and have done your research and still feel that you should get some help: Don´t hesitate to do so.
Perfect picture taking is an art. And the return on your investment of a couple of 100 of Dollars is just astounding.
Conclusion
Both Real Estate Agents and Vacation Rental Experts are investing heavily in improving the pictures of their properties, because they know it will give them the best bang for their buck.
If there is just 1 thing you can focus on……it is improving your pictures.
Nowadays there seems no way around listing your vacation rental on one or more of the Behemoth Vacation Rental Listing Sites like Airbnb, Booking and Homeaway. Can you still make a decent turnover without extreme dependance on these OTAs (Online Travel Agencies) and how?
You can still make your vacation rental extremely profitable without selling your independence. In this video Robin Coenen, the CMO of Club Villamar discussed the why and how with Simon Lehmann from AJL Consulting.
Club Villamar rents out over 3500 villas with private pool along the coast in Spain and generates 90% of their bookings directly (own marketing and own website), without the help from OTAs.
You will find the transcript underneath the video. Enjoy!
Simon: Hey, ladies and gentlemen, welcome back to the next session of AJL profitability hub 2020. Our next session is talking about ´Building resiliency with direct bookings´. It's a great pleasure today to have Robin Coenen, the CMO and shareholder of Club Villamar in Spain, with us on the conference. And I will immediately ask Robin, please use some time to introduce yourself and tell us where you're at and what you're doing in these challenging times.
The History Of Club Villamar
Robin: First of all, Simon, thank you very much for inviting us to call. And first a bit of history. It started about 20 years ago when a group of friends and I, we went on holiday to the Costa Brava to Spain. It's a lovely area, beautiful beaches. The rugged coast, it's called. And we went there on holiday and we spent time on the beach and we actually slept in a house, a villa with a private pool. That was of one of the friends of ours. So we were spending our days at the beach and doing all kind of beach activities and going water. And then in the evening, we went to the house and had a barbecue there. We stood there. Amazing sea view. You just get the picture. And we said, OK, this is the life. More people should be doing this.
Our First Vacation Rental Experience
So we thought about renting out the house of this friend of ours. And we started with a lovely Dutch company. And of course, like any entrepreneur and we're a group of friends, entrepreneurs, we said STOP. We can do this better. But I have to remind you that was about 16, 17 years ago. So it was the early Internet days. So you also made your own websites. Basically, you do anything, everything yourself. So we started renting out his house through our own platform.
Villa on the Spanish Costa Brava
Gaining Momentum
And then all of the sudden we had friends that said: hey, you also want to rent out my house? And then we had friends or friends. And all of a sudden it grew into a company and really big. Those first years, we did everything ourselves. So the building of the website, well, not the actual coding, but the marketing. Signing the owners, getting the contract and making sure that we have bookings, when people arrive, make sure the houses are OK. Changing the gas bottles, everything. Everything. We did everything ourselves, which gave us a huge advantage. Because now, where we are now, we've learned so much from what we've done in the past years. From the early days, as we understand every part of our company. We understand what's happening there.
Fast Forward 15 Years
So from there, fast forward fifteen years to now, we have this company called Club Villamar and we rent out and manage, through our partners, more than 700 properties. And those properties are most of the time properties with private pools and with amazing seaview. Located within a couple of kilometers of the beach. And our focal point is, of course, the Costa Brava, north of Spain. The Costa Maresme, somewhat more South, including Barcelona, the Costa Dorada. And there we have over 700 properties.
XML Connections For Scale
We also work together with other people in other parts of Spain, and that is on XML-basis. So they deliver the houses and we deliver the bookings. That's where we have a partnership. And it's all time we've been growing and growing and growing the company and it's it's been going very well. (over 3500 villas offered on Club Villamar website)
As you know, from the from the vacation rental in Spain, it's going very well. So this it's a good market. Of course, I'm not doing this by myself. We have gathered through the years, this huge team of enthusiastic and motivated people. And I'm just a cog in the wheel. And in the end, I have something to do with marketing. Because we built everything ourselves from the ground up. We have very direct control and we have kept very direct control over our own distribution channels.
And that's something that that's quite unique nowadays. Thank you.
Map of Spain
How Do You Get Your Bookings? The Distribution Mix and Vacation Rental Listing Sites
Simon: Thank you, Rob. And this is a great introduction. And you can feel the passion about your business and what you have achieved and what you have done. I am actually a pleasure myself, too, to go on holidays with Club Villamar, and that is a long time ago before I even knew you and Ed. The two founders. And in the end, this is the reason why you are actually here today. That is that when we were looking for some consulting customers and I said to to my account manager, Nicolas in Spain, I want to work with Club Villamar. That's a great company and a great experience in one of your properties in Calpe, actually. And and here you are. And then when we contacted, you took like 24 hours for you to get back to us. Yes, let's have a conversation. And we're now having a great working relationship and we're happy that the Club Villamar is also using AJL Services. So.
You made an interesting point already, sort of gave the secrets away in terms of of your distribution mix, right? Because you you have a very mature business. We always differentiate between leisure and urban. Obviously, Urban has been hit super hard with these crises. It's a less mature business. Urban has more competition, lower margins. The leisure business has more seasonality is used to seasonality is used to variable costs as well. And also in generally has has also a more probably as on an average more direct bookings. But how is it in your particular case? How do you how does your distribution mix look like currently? What do you get from OTAs in terms of revenue and what you get from direct bookings?
90% Direct Bookings
Robin: From direct bookings, we have over 90 percent of our bookings and our turnover. We generate it ourselves. So it's our own marketing coming through our own channel and our own re-marketing on that and making them into repeat clients. And from the big OTAs, let's name them: Booking.com, Airbnb and Homeaway in the space that we're in. And those generate less than 10 percent. And within these 10 percent, there is even some smaller agencies in local areas and other countries that also book with us. So into mix, we we're very much leaning towards the direct bookings.
Simon: Wow, that's super impressive. So does that mean you just don't like OTAs or does that mean you're just doing a simply better job? Because your argument could be, you know. The argument could be, hey, direct bookings are so much more expensive and, you know, these OTAs create so much demand. And then you can convert them or whatever. Or is it that? Are you making this comparison? Then is it more is it better for you to have these three bookings or could you do more without.
Robin: Yes, we could do more with OTAs. And it's it's it's a cost thing. Yes, absolutely. So you said: do you hate to the OTAs or do you do a better job? Well, we do do a better job. So what we're spending in the OTAs said on average about 15 percent fee. You look across the board of the bigger big OTAs and you put together the guest fee and the owner side. So we can do it a lot cheaper than that. Yes, that's one thing. But that's it. There's another thing that's a lot more important.
Simon: Well, could you share with us the cost of your conversion roughly on revenue?
Yeah, it would be half of that. And it kind of depends on what you see as as a marketing or a sales cost that you also want to get away. We have our own IT. Maybe you have to include that. It goes up a bit. Maybe you have to include a call center that we work with. Then we'll go up a bit. But we're significantly, significantly cheaper than then an OTA. And so we can do it at a lower price.
More Important Than Money
But this something that's even more important to me and it's that look, every every company has a sales funnel. And if you look at it still. So, no, it kind of looks like this. Then at the top, you have your potential client, your potential guest. And here at the bottom, you have people who actually become a guest of yours. OK.
100% Direct Bookings Example
Two models. One is the model is 100 percent direct bookings. So do you do everything ourselves? We do everything ourselves. That is almost the case with us with this funnel, we can choose from which channel I don't like, not general like OTAs, but other channels. Let´s me give me an example. An email marketing, Facebook marketing, Instagram marketing, paid marketing, Google marketing. All those marketing tools that you have to actually get people into your funnel and that funnel is our website. And on those websites, we can tweak a lot of things. We say, OK, let's change the terms and conditions. Let's change the algorithm. Let's change just whatever you think will help you get the most attention for your houses, but also with your profitability, which is also a big thing that you can talk about. Then you have your actual guests and those actual guests. You make sure that they come, that they're very happy. And then you have to a customer lifetime value.
So OK, with Club Villamar. We own this funnel. (more about funnels here) It's ours. Everything that happens in this funnel, people we put in and the guest we have in the end, we have direct control over. So there's a lot of easy tweaking that you can do to the best optimum results because this funnel wants to be wider and you want it to be like this and you have a better offer. OK, so this is the first case. This is the 100 percent booking yourself. And then with the other case, which is it's an extreme case. But let's let's do this.
Simon: Well, there are such extreme cases, Robin. Oh yeah.
Booking through OTAs Example
Robin: many of them. In my eyes it's an extreme case. I make maybe I'll follow up on that. But in they own the funnel, they choose where to get the people, they choose the algorithm, they choose the terms and conditions. They choose the re-marketing. They they choose maybe they they'll get the people to book again with your properties, but: Who knows? And because we have made mistakes in the past, because we have this funnel.
Homeaway Example
We also were with HomeAway. And back in the day, you had other products: pay per listing. You're just giving a lot of money. You have the top rankings. You've got a lot of inquiries. And we're doing over over 200 enquiries a day because we just put all our properties on that and it was great, we were converting like crazy and they changed their products. And all of a sudden, we've got less than 20 inquiries a day and not really bookings because they were in the beginning phase. It's just a company that just changing stuff. They were in the beginning phase of converting that. So all of a sudden we didn't have that. And that was really hurting our business.
But we were very lucky. It was just a part of the people coming into our funnel. OK. So again, too, if you only have one OTA, then the OTA has to funnel. So in the end, all you get is the clients, the guests, and you make them as happy as possible. But the the the influence that you have or your revenue is not so big.
And we started out this business as being our own business or rental business and not ´cleaning for our Airbnb business´. So looking at our own business: We want to be as independent as possible or at least have the possibilities to switch when some of the other partners does something that doesn't make sense
The Main OTAs for Leisure Vacation Rental
OTAs Change All The Time!
If you have been in the rental space for for some time, you know. And also at this time, you know that the OTAs are changing their products, rules, algorithms all the time. There's not a lot you can do. So the influence that you have is not so big. And want to have a lot of influence on the end results.
Simon: That's very impressive. It sounds like the ideal world in what you have built. And very complex as well. Thank you for being so detailed. But the next question would obviously be how on earth you structured it. I mean, you have three hundred marketing people working for you. I mean, this is we talked about costs as well, cost of conversion. I think we understand that you're trying to keep your customers in this particular funnel, which makes a ton of sense. But how do you actually, you know, what are your key resources and employees that are involved to actually make this happen?
The Big Marketing Mistake
Robin: Yeah, early on, I well, I think a lot of business owners with me. I made a big mistake. I thought I had to do everything on my own. So really, for marketing, for SEO search engine optimisation, I was I was building the link links myself. The Facebook marketing, I was doing it myself. Ads was really it was crazy. It's Google, Google AdWords. It's not called Adwords anymore. But if you've been in the module recently, everything changes every year. It's just incredible. Also with the SEO, the search engine optimisation. Well, and we got slapped with all the whole animal kingdom, the penguin, the panda, the hummingbird.
So every time we learn everything ourselves again. But that really was a mistake. And I think that's that's that's part of the growth cycle that you're in. So we had to hire our professionals, find out there's companies that that's no love more about it. And also, I have a lot more focus. Because we're running a complete company, not only a marketing thing. So we're hiring a lot of people. But just agency base and just it reminds me of a billboard I saw in New Zealand a couple of years ago. And it was about plumbing and construction companies that it says:
If you think it's expensive to work with professionals, try hiring an amateur
No Idea
That's why we're also working with you (AJL Consulting). Work with professionals because you want to. You just want the best results. And that's it. As what we are, what we do is all the thing that help is that we learned so much about marketing ourselves. So if we're looking at a company, we say, OK, it's if you're not measuring your return on ad-spend, if you're not doing re-marketing, if you're not doing all those detail points, if you're not surprising me with what you know, then then maybe you're not a good fit.
And fortunately, through the years and that's falling and getting up, you get a lot of good people around you.
Simon: You talked a lot about AdWords and Google as well, but it's still there are still others that you're competing with. And you know, a lot of the thesis out there in the market has been until now at least if you feel like we can look at different markets. If you look at the US, the US property managed to get about 80 percent of their demand through OTAs, right. In Europe the larger and the more mature market, the businesses are still around 50, 60 percent direct, but it's coming down heavily and the average in Europe is about 40 to 30 percent. This direct. Your double that and the argument is, ´Hey, we can't compete with the OTAs.´
Well, you obviously can because, you know, we always hear these massive numbers that Expedia and booking all come spending 10 million a year on on Google ads. And you seem to be able to navigate very well with 90 percent direct bookings.
¨Spend Milions On Marking And Not Make A Profit´
Robin: They are, yeah, it is. It is going very well. I can tell you it's of course, it's not easy. We're not investor backed. It's our own money. We don't have hundreds of millions to throw around on the marketing and not not even in some cases, not even make a profit in a year. So we don't have the luxury of doing that. But if you're if you're smart and you use everything and look at your complete funnel, then there are still ways that you that you can make it work, that you can't be independent.
And I think the big part of the drive is that we're not only looking at costs, but also at our independency. As always, if we just don't want to be, I said this before, we don't want to rely too heavily on other people's companies because they are other people's companies. They do have an interest of their own.
OTAs And Cancellations
Simon: Now, going further and keeping on sort of the OTA discussion, Robin, is that. The OTAs have not made many friends with this with this crisis as well when we talk about cancellations. And, you know, can you tell us what did their friends you're seeing between direct bookings and the ones who came from third parties in relation to cancellation and how they're handled as well.
Robin: Yeah. Yeah. Yeah. There is a difference, at least there's already a difference in in communication. Look, if you if you have your reservation with, let's say Airbnb, you just have your app, you say, I want to cancel now you present the button and we get an email setup. We refunded all the money. We have our direct bookings then go another way that this a lot more communication at this moment.
We feel a responsibility to the guest, but also to our home owners and of course, to the people who work with us. And that that's with our direct bookings, we tend to have a lot more communication because these people actually wanted to go on a holiday and we know they're going on holiday. It's good for them. They're just scared at the moment, which I can fully understand because the whole world is in turmoil. And so what we offer is that we say, OK, for that same house. Maybe we can reschedule. And there's a lot more work to discuss. More optimized. And he say, okay, well, let's get you a booking to the end of the year or even through to the next year so that there is a difference in communication.
But I have to say that and because we only have 10 percent of OTAs and it is pre-season bookings that we're talking about now, mainly in this period. And that's not a huge volume. That is it's very hard to see what's in the end. The effect will be the difference between only 10 percent over not so many bookings and the other 90 percent off. Also not a big volume. So it can go either away, but the communication feels different.
To Direct Channel….Or Not?
Simon: Now, absolutely. I see that very, very clearly as well, and an interesting, too, that poking a little bit about the future as well as like a lot of the what has been happening, especially related to cancellations, is now also triggering a huge direct booking discussion. Obviously, that's the reason why I want to put this session on, because you already there. But a lot of people, they want to get there now because they realize, you know, the vulnerability of this business. Number one. And number two, realizing that oxygen equals cash and oxygen equals life. And I think that's something become clearer and clearer and clearer. So a lot of our customers and then a lot of guys who were in an audience today, they're thinking about a how do I get there in terms of direct booking. So if you could advise the property manager. That he's looking to invest more into a direct channel. What what would it be? What would you advise them?
Robin: Yeah, but I know that there's this people who do will do perfectly well with with with OTAs at this moment and in the last years and let's be honest, the last year for vacation rental has been amazing and people have been out the road with or without the ice.
Why Did You Build This Company?
But I'd like to say just look at yourself in the mirror and think of why you started this company in the first place. Because if it's because I want to do that: The key handling and cleaning for Airbnb or for Homeaway. Okay, perfect. You can be perfectly happy with that. If it's I want to build my own business and have control over that business and be independent. Oh, wow. Maybe you did. Maybe the easy way. It only leads to regret. Maybe the easy way is not the way to go. Maybe you have to build your own genuine to put effort into it. And is it is it the easy way? No. No, it's not. But the payoff will be the biggest in the end. Yes. And certainly in a matter of control. So I would say, yeah, do it
Simon: . You just mentioned the word control and that during these massive challenges, you also need to certain control over your direct bookings. Now, how is the control of your own booking helping you to navigate right now through Covid 19?
Robin: Very good. The first example that a view is a cancellation that we're having because we actually had to cancel because people cannot arrive at this crazy situation nobody thought would ever happen. So that example I already gave, but also the communication that we had for the guests who are arriving in, let's say to lay off all of us is just to say, OK, you make the second payment, you make it later, they'll make it. Now, just when you will see what's somewhat more secure.
The things we changed at Club Villamar
So you have a lot and the Covid was going off it when it when it was kicking up. We said, OK, maybe we have to make a new product, an insurance that we do. We can sell that people actually get the money back once it was out to cancel because of co-pay. Somebody get sick or dashed over restrictions. And that was implemented within 24 hours. We sort of made. So it's just that the control that you have in this in this time is just a lot better. And it isn't. Is it the right solution? No. But this year, too. Or maybe not. But at least you have the feeling. OK. I can actually do something about the situation. And that's just that gives me a lot of peace of mind.
Simon: Absolutely. And I have to say, personally, I was super impressed by speed of execution. Since I'm on your newsletter address list, as well as a former customer and I received that document I immediately wrote to make list and say these guys are not mucking around. They already got the insurance. And and and this was a lot of respect for that. I mean, this really shows that they have control. Whatever you had left, as you pointed out, in terms of control. You are you are utilizing to the max. So what he said non-generic bookings, very amazing. Organized the marketing department, all your channels keeping control over it. How does that translate into repeat customers? I mean, this is always a big argument. It's part of the customer lifetime value. You know, because the repeat rates and vacation rental traditionally have come down quite substantially. I mean, some winter destinations, you had like 50, 60 percent repeat rates every year. Same place booking over and over. Now people want choice and go to different places. How does that translate to Club Villamar?
Repeat bookers: How is it affected?
Robin: Yeah, it is absolutely a factor, which is again, it's a bit hard to measure because course we're talking about a percentage of repeat bookings on a small percentage, although we have actually of OTAs. So maybe someone or somebody who has a not a mix would be better to give an answer answer to that, but it would be very logical. Look, if we get an Airbnb booking we we have to or I'm way I think is what we actually have it with Homeaway too, to ask the clients for their own email address so we can have direct communication with them. The channels for repeat booking the OTAs also have them in place. They also have a plan for that. They also say, OK, I'm going to send you what knows about this, about to the properties on the Costa Brava. And it's not necessarily my property. So it's only logical that that would easily book with Airbnb again.
Even though we did the majority of the work. It's not to bash on the OTAs, not at all. But if you look at the yourself, just imagine yourself that you are spending time with your with your kids in the pool of a house. And then how big of the pleasure that you have, was the website where you booked. Look, these guys are not they're not cutting grass. They're not they're coming to clean your pool. They're not making sure that you have a nice, warm welcome. They're not there for you 24 hours a day when you're when you're at the house. All these things, they are there.
But let's talk about the homeowner. They know that the mortgage that they have to pay. It's just a service that they provide. So am I going back to that in the repeat? Because it's hard to measure, but I I'm pretty sure that we do better ourselves and the guest that we had. So from. OK, let's let's be honest. It's also that they are the Airbnb clients. For them, we are just the key handlers, which makes it a lot easier for Airbnb to convince them to book again.
Reviews: The Ultimate Feedback Loop
Simon: So talking about booking again, I mean talking about the little elements or the gold nuggets that are important for marketing, we talk about repeat clients. We talked about overall your marketing efforts and other won gold nugget, I guess, reviews. Right. I mean, everybody talks about how important reviews are. First of all, you need to deliver a good experience before you actually can get good reviews. So we are assuming you're doing everything possible for yourself on your product together with your partners, that that product is absolutely up to standards. You're focusing on pools with pool. So you have clear product standards, but the reviews are very important. What's your what do you do with reviews and how do you manage them? And then what is your feedback rate for direct bookings? Yeah.
Robin: Now, that's also an important point that you are there to addressing. Everybody who has been a client with us gets an invitation to to make review when they're going to review the website to communication with us, the actual arrival, the cleaning itself. Oh, a whole bunch of things that we have a quite a high repeat or sending in rate of that. That's 32 percent as we get it. So we'll get a lot of a lot of feedback.
That's feedback always is read immediately. Of course, that is unless something's wrong while people are at the house. We have all other feedback loop for that. That's outside that. You don't have to wait until you're actually at home. And then we get the reviews and we always look at what's actionable and we really put an action on it because it's if there's a person who said, okay. Just about anything. The best one, not the good. This is something that we can chase for for forthcoming clients and we can change it on very short notice. So that's that's our own quality, look. It's just that if there's reviews on other platforms, I also read them. But it's not the communication is not so direct. It's just it takes a lot more time. And they really feel like a client of another platform. And if you if you have the reviews there, let's say it's only stars.
Where Do You Want Your Reviews?
Let's say that you put a really a lot of energy into becoming a super host on Airbnb, which is great, great for your rankings and you're a super host. But if Airbnb all of the sudden is not flavour of the month anymore, but because of any decision, you have a lot of good reviews here. But now you have to concentrate on Booking.com, where you have zero reviews and you will not really score in the algorithm. Who are you helping at at the moment? And yeah, we can see where you get to reviews.
Where do you show your reviews?
Simon: Yeah, absolutely. So talking about the direct channel. Like you just said, make them on your direct channel. And besides besides sales, what other advantage does it have to have its own direct channel as well?
Robin: Yeah, the control I took out back to the control. And that's that's just very, very wide. It's just that you're in control of your your own your own company and the actual Independence Day. So that's it.
What Value Do You Provide For Your Owners?
Simon: How does that how does that how important is the owner in this? Is this an argument that an owner says, hey, this is cool? My my agency that I'm working with is generating 90 percent Direct booking. So he has a bigger peace of mind. They know their customers that know the type of their customers. They don't get some stag parties into their houses or some crazy stuff that comes through all the channels. Would that be a good argument as well?
Robin: Yeah, yeah, that's absolutely a good argument. What's what's very important for a home owner is that he gets paid. The second thing is that you don't hold that you don't ruin his house. And we have to our partners, we have a very good relation with our with our home owner. Which means that and also because we've been doing this ourselves. We also know some of the homeowners still when we know that you, the kids and everything and they re in the house. And we we've signed the first contracts as we we feel that responsibility to our owners and the owners feel that responsibility back. And through our partners, we actually have feet on the ground when things don't go so well that it can actually call somebody who comes by. And of course, the OTA is not providing that. There's also service that we still know.
How About Technology?
Simon: That's definitely clear. Oh, yeah. Well, no, They will stay either in San Francisco or in Amsterdam. That's for sure. So looking at the time, I quickly want to touch that topic of technology. I mean, this sounds super complex. What you're doing with that, with all these different multi-channels, you're you're you're working with a direct newsletters, emails, et cetera, et cetera. What kind of technology you used to handle that or how it should be understand how your tech stack is looking like.
Robin: Yeah, well well we from beginning it was really easy because in 2003 there was no choice. There was no WordPress or Avantio or Kigo. And every custom and custom, every platform that's just easy to do to use. It wasn't there we had to build ourselves. So we built it and it's bigger, bigger, bigger. And I can bore you with a lot of technical details that it has something to do with music. It was built in symphony, or I don't know what. I'm glad that the IT guys know. They know all of that and make sure that everything runs perfectly.
Speed Of IT Implementation
But the most important thing for us as a company is that everything is implemented very quickly. So once we think of it and as we connect with like most of the OTAs that we connect with, we have our own API, our own connection. And so, sure, it's a pain because you have to update it all the time. There's something I didn't think of to begin with that it actually needs maintenance. But just also that the partners with which we work on the Costa Blanca, I had to South on the part of Spain, we just to get their feed connected to our platform and all of the sudden without alignment, which I call we built everything ourselves, which again makes us like in independent. It's a huge thing that you're building. But there's a there's a value in that.
Simon: Summarizing that you want to control it. So, you know, you guys control the technology. You want to have control over your guests.
Robin: I mean, I sound like all of a sudden as I'm like a control freak, really, I'm not I'm not that bad. It's just independence is a thing for me. Yeah. Yeah.
Simon: No, absolutely. I get that. And I wouldn't I would never allowed to say that in the negative sense. I mean, you have it. You have a military background, so you know. So let's wrap this up quickly, you know this. Be great. Have a great conversation. Extreme know how. Please. Also to the audience. Don't forget to ask questions which we will summarise and come back on a separate session so we can address some of your questions that you might have.
Google Into The Travel Space
We've talked a lot about Google, but we haven't talked about Google in so far that they they've been. They want to go closer to the consumer as well. Right. We've seen them, though, there has been products from Google to sort of disrupt distribution landscape and and and and go closer to the consumer and then sort of cutting out the OTAs. Is that something you guys are worried about? Is that is that a threat to Club Villamar going forward?
Robin: No. To be honest, not really. Look, we're spending a lot of money on Google anyway, which and we would just see as he out goes in The main opportunity that I see is something like a compare tool, which you can say, OK, this is an object which could find it. At this price you could find it. There is this price at this price and maybe who knows, they'll have a commission model around it. I don't know where it´s going.
But if it happens again, it's good to have your own marketing in place. That's your own channel that's actually in there. Otherwise, you're only very much depended on if an Airbnb is in that mix or we'll be able to pay for that mix or we'll be willing to pay for that mix. So we'll just see where it to where it goes. We're not scared easily. We're a very strong company.
Simon: Wow. Lots of positive energy. We I think we all needed out there in the industry right now. And with that, I really would like to to wrap this up in preparation of our conversation today. You you put forward a really nice quote from Robin Coenen, the CMO of Club Villamar and you said:
He Who Has The Beds, Has The Power
Robin Coenen
And on that note, ladies and gentlemen, I would like to thank Robin for being with us today and giving us some great insights from Club Villamar. If you have any questions, comment online to the chat function and we'll get back to you. Robin, thank you so much. Stay. Well, stay. Thanks to you.
Robin: Thanks for having me. Simon, it was a pleasure. Thank you. I speak to you soon. Take care. Bye bye.
I bought my own vacation rental over 15 years ago and immediately this question arose: ´What is the best way to advertise my vacation rental?´ I´ll tell you what I found out, what has changed in the mean time and how we rent out over 3500 properties now.
The 9 best ways to advertise a vacation rental are:
Make you own Vacation Rental website
List your property on other sites
Make stunning pictures (and a video!)
Write an enticing property description
Re-activate your former guests
Happy guests = Good reviews = More Guests
Add amenitiesto your property
Manage your prices actively
Promote on Social Media
Let me dive into it a little deeper. I want to show you what you need to know exactly to make more money with your vacation rental. I will share with you wat we learned in renting out to tens of thousands of happy guests each year!
Make you own Vacation Rental website
I hear you think: ´Really Robin,…….do I really need my own website in the age of the large rental platforms?´ and my answer is: ´YES! You do. ´
You ask: ´Why?´ (I hope).
Ok, here it is: either you rent out by yourself or you rent out through a platform (next point). Both will cost you money, but having you own website gives you………Options!
The way you get guests is by showing your property to the most prospective renters as possible. When you rent out through another companies platform, they will own the sales funnel. (learn more about sales funnels here). You are 100% dependent on companies. Can they do a good job? Sure, they can. But they can also mess up, change the algoritm on their website, change the Terms and Conditions for owners and/or guests, spend less in marketing, etc.
Not to bash on the OTA´s (Online Travel Agencies as we call them in ´rental jargon´), but they have shown time and time again to be unreliable. Just search ´airbnb trustpilot´ and you see what I mean.
Airbnb reviews in 2020: Not so happy guest and owners
It´s good to have options. Luckily nowadays there are many ´easy to make´ websites options and you´ll be glad that you have your own sales funnel.
I talk more about ´Why direct bookings are important´ in this 2020 online conference organised by AJL Consulting.
List your property on other sites
I briefly already mentioned the ´cons´ of listing your vacation rental on another website. One of the ´Pros´ is that their reach is enormous. Multiple countries, multiple markets, multiple million dollar marketing budgets. Hard to beat the Big Guns like Airbnb, Booking.com, Homeaway and the alternatives.
Make sure to advertise your vacation home on several sites. As soon as you ´goes out of style´, you still have an alternative.
How much it costs?
Most of these companies charge a commission on a booking. (check the ones without commission here) So that seems a good ´no cure, no pay´-method, right. BUT: The average rate is around 15%. Wow!
There are also websites that charge you an annual promotion fee (easily 110s to 1000 USD per year), but this seems to be the Dinosaur-model in the current vacation rental industry. All the Big Guys are ´Pay by reservation´.
Make stunning pictures (and a video!)
The Money Shot in advertising a vacation rental property
´A picture paints a thousand words!´ I´m sure you have heard that before, but in vacation rentals it´s
´A picture paints a couple of thousand Dollars´
Me
Look: What are we asking our guests? We are asking them to visualise a perfect vacation in your property in the future. They have never been there and probably have some objections to overcome in their mind.
And based on that mental movie, we ask them to transfer their hard earned cash.
So, let´s make it easy for them to visualise the perfect vacation!
Because people buy/rent on emotion and justify with logic.
There is no better investment that you can make than making (or paying for) stunning pictures. Believe me. This is one of the first skills I had to master when we started renting out and it has paid for itself thousands of times. It is easily the most profitable skill in vacation rental.
Not into photography yourself? Get an expert to make the pictures. He or she will be worth their weight in gold.
Concentrate on ´the money shot´: The One Picture that will be the thumbnail on your own and other websites. The picture that makes potential guests ´click´ and fall in love with your vacation home.
Make sure your pictures are lighted the right way, all personal items in the closet, the dog out of the way, etc.
Make pictures of everything, because it all re-assures the vacation go-er that this is the property for him/her.
´Make the Picture, don´t take the Picture´
Ansel Adams
If you can get a good walk-around-video of your property…..even better. You might even go overboard with a virtual tour, like the one Matterport offers. Whatever you can do to overcome the renters fears and objections, right?
This is kind of an art form, but here are some pointers:
Write about benefits, not features. Or benefits combined with features. ´The kids will play in the private pool all day, so you can relax and read that book you always wanted.´
Use emotional language. Paint a picture with words, without making the text boring
Use paragraphs and spacing. Guests want to be able to scan your text before they might actually read it.
Tell the USPs (Unique Selling Points) of your vacation rental. Why should they rent yours?
Write about the surroundings and places to go to. Guests will be interested in an area before they are interested in staying there.
More tips on how to write a killer description of your property, turning ´Lookers into Bookers´? Have a look here
Re-activate your former guests
If you have rented out before, this is a no brainer. Your marketing costs will be the lowest when guests keep coming back in your vacation rental. To find new guests all the time is incredibly expensive and time-consuming.
Another great thing: They can book on your own platform and not through an OTAs like Airbnb. That´s 15% commission that you keep in your pocket!
How to do this?
Stay in touch with your previous guests. Send them emails, birthday cards, texts, make them follow you on Social Media…….Anything goes (short of stalking) to be top of mind when the time comes to book the next trip.
There is no cheaper way to keep rental income coming in!
Happy guests = Good reviews = More guests
Get the best reviews!
Of course the previous tip only makes sense if the guests were actually happy to have rented your property. But that´s just the basis of every good business!
Happy guests leave happy reviews, which are fun to read, but are also a factor in most of the algorithms of the bigger booking platforms.
That means: happy guests= more good reviews = more exposure for your listing= more bookings……Happy owner!
So make sure you make the experience memorable! Make sure you aim for the ´WOW´- effect. It´s getting harder each year as the guests expectations rise and rise. But you can still do it by being creative: leave local delicacies, a handwritten welcome card, a welcome book with clear instructions, discount vouchers for the local restaurants, etc.
Don´t forget to ask the guest to leave a review after their stay. Nowadays we are bombarded with review invitations. You get them as well. But your guests are more likely to fill out a review if they have had an amazing experience and if they have told you they will fill it out.
There is so much choice in vacation rentals on the larger booking platforms, that potential guests ´filter like crazy´ to drill down to what they are exactly looking for.
And although it will be challenging to add ´sea view´ when you have a property inland, there are many possibilities to stand out in adding amenities.
One of those is obvious, but I am amazed by how many properties still do not cover this life essential: Ultra High Speed WiFi! Get WiFi installed and your bookings will double easily.
A recent research by Booking.com has shown that amenities are increasingly important for the searching individual.
It is easy to make sure your property has a hairdryer. But you might also want to think about airconditioning, high end coffee machine and other kitchen appliances, smoke alarm, fire extinguisher, gaming console, Netflix, etc.
Just think what you would really appreciate when staying in a vacation rental and don´t be afraid ask your guests what is missing to make it even better.
Manage your prices actively
The better the presentation of your rental, the better the reviews, the better the location, the better the amenities…….the more income you can expect to make.
But it does not make sense to ask for a price that is well above the market because your property is ´The Ferrari of all Vacation Rentals´. You do not just compete with other properties on the sites you advertise on……but with the complete internet.
It has never been so easy to compare prices, and ´lowest price first´ is the most used selector on all websites.
So if your property is consistently the most expensive for all searches you want to appear in, the chances are that your ´Ferrari´ will be booked last…..or not al all.
I recommend that you manage actively: Lower the prices as the time to arrival decreases. And make sure it is booked. When there are no guests in your property, you are missing out on income.
All serious vacation rental businesses, like my own business Club Villamar use a form of revenue management like this, so it would be smart to do so as well.
Are you on Social Media, like a couple of billion other people?
Chances are that you have a lots of friends following you as well. Great!
On Facebook and Instagram you can easily add a page or account for your vacation rental. Convince your friends to join the page or follow the account as well and persuade them to ´like´, ´comment´ and ´share´ your content.
Post stunning pictures of your property, your reviews, offer a ´behind the scenes´ look of you preparing the property for another guest.
Use hashtags to increase your reach, tag friends and former guests in a post en interact with them. Ask questions. The more interaction your content gets, the better you will rank in the Newsfeeds of your favourite Social Media platform.
You did know that Facebook and Instagram do not automatically show all your content to all your followers, right? Just a small percentage will see it and if they do not interact……the social platform of your choice will not show it to others.
There is a way to increase your reach of your posts. It´s easy. You guessed it. You need to pay 😉 That is how they make money.
Conclusion
There are still many ways to make your vacation rental stand out from all the hundreds of thousands of other properties that are offered on the internet, but you have to be smart. Some fixes are easy, others are somewhat more time- (or money-) consuming.
I hope you do take away from this article that it is still important to have a possibility to book on your own website, where you can manage your own marketing. That independence is still possible. At our company we rent out 90% through our own marketing and website and just 10% through OTAs.
I guess we like a bit of Independence. The ability to make choices.
Because if you do not control the Top Line of your income, it will be very hard to control the Bottom Line and your Profits.
The OTAs like Airbnb and Homeaway can be friendly, but they are not your friend.
They are just another weapon in your marketing arsenal.
Related questions:
What are OTAs?
OTA is a acronym and stands for Online Travel Agency. These are agencies that make money just by being between a traveller and the one that actually offers the product. Often they charge a commission on a sale.
Where can I advertise my vacation rental for free?
There are many websites like Airbnb, Homeaway, Booking and VRBO that only charge you for a sale made. Listing you property is free. You can use social marketing to promote your rental property for free as well.
