Vacation Rental As A Business: Surefire Tip To Increase Income!

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 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 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.

bucket with holes conversion funnel
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.


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.

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Frequently asked questions:

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