Advocates

If not, now is the time to learn how you can achieve Rental Mastery:

  • Use psychology to convert more bookings
  • Turn guests into advocates
  • Know the vital few things you should do to achieve the best results
  • Be fully booked 90% of the time

I share with you how I took a brand new rental to 80% occupancy in 3 months.

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Creative cockroach?

The Airbnb founders were from design school where they learned to be creative.  Their early inspiration to make money from hiring airbeds soon morphed into creative ways for home sharing.  When they were failing, they used their creativity to make enough money from funky breakfast cereal to survive, leading a startup advisor to say they were like cockroaches – ‘nothing will kill you guys’. It was a compliment!

This illustrated the theme of creative change they used over and over to survive – free photos, owner reviews of guests and a ridiculously easy website to make bookings. When facing shut down by community lawmakers they came up with creative changes and compromises to continue operating.

They became the ultimate unkillable creative cockroach!

Vacation rental fee increase?

This continuing creativity struggle may well affect vacation rental owners this year too, with a fee increase driven by changing models.

Creative struggle for growth

So are Airbnb struggling now?  They announced that they will raise money with a public share issue in 2019, and its success will be built on growth prospects.  The problem is their growth flatlined in 2018, so the struggle is  – how to get growth? They decided in recent times to add hotels, China, ‘experiences’ and new tools for property managers.

Foray into new models

The most relevant to us VR owners is the foray into hotels and property managers, and they are creative there too, with lots of experiments.

They have partnered with boutique hotels, they have had special apartment buildings built by partners to be marketed via Airbnb.  They have partnered with hotels and property managers to list on Airbnb, and this is where it gets interesting.

The growth will add supply and this may mean more internal competition.  It will also probably mean extra host fees.

Changing host fee model

A few weeks ago (May 2019), news emerged via Skift that Airbnb are experimenting with some hotels and property managers with a simple host-only fee.  Of course the fee for hosts jumps from 3% to around 14% to compensate Airbnb for the loss in guest fee.  It is very close to the booking.com model.  Some data shows this simple model is preferred by guests.

So now Airbnb has a hybrid model.  Some hosts pay the old 3% commission with about 11% paid by the guest, and some hotels and property managers pay a host only-fee of  around 14%.

Presumably, it will all feed into extra listings and extra Airbnb revenue. The creative cockroach will be well placed to go public with its public share offering this year.

Your Airbnb fees will probably increase dramatically

If data emerges that there is strong guest preference for the host-only fee, expect that Airbnb will progressively introduce a high host-only fee for most owners.  Expect your host fee to rise from 3% to 14%!

The net revenue to you need not change, because you can increase the base price to compensate for the change in fee structure. It can mean the same total fee for the guest, and the same net revenue for the host. That is complicated, but doable.  The big point here is to expect a fee hike!

There has been no official announcement yet, but don’t be surprised when it happens!

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A vacation rental colleague told me a surprising story of how a return guest declined her direct booking discount, and made a more expensive booking through an OTA!  Thank you Helen for this story, with some messages for us all.

Helen is doing all the right things for direct bookings.  She has her own website, a presence on Google My Business/ Maps and a clear discount in a voucher she sends to previous guests to book direct.

Discount declined

Imagine her surprise when an enquiring guest said she was returning and declined  Helen’s 9% direct booking discount, but instead chose to book via booking.com – “for the cashback to my credit card”.

It turns out that booking.com is advertising to previous guests that they can get an (unstated) cashback in May if they book with booking.com.  On signing up to the discount company so you can check the discount, you find it is just 4%, well under the 9% Helen offers!

Irrational behaviour

People behave strangely.  Some motorists backtrack 10 km so they can get a 4 cent per litre fuel discount, costing far more than they get for the fuel discount! Some vacation rental guests can behave the same way.  Maybe they have spent so much time finding a discount, they will pursue it irrationally to justify their wasted time.

Here is the booking.com offer, offered by shopback:  https://www.shopback.com.au/booking-com. The long sign up process to find the offer is followed by a tacky email talking about other offers, and there is NO unsubscribe option as required by privacy legislation!  Says it all really.

So what can you do to attract direct bookings?

I continue to send out monthly newsletters to my past guests and keep reinforcing the discount for past guests booking direct – it works!

Helen’s winning strategy

Helen doesn’t have a newsletter, but she has actually solved the problem better in her overall strategy.  She goes out of her way to make personal contact with 95% of her guests – and they love it.  Many become regular repeat guests.  One Singapore couple have been returning for 26 years.  And overall about half her bookings are repeats!  Who cares if one person is distracted by the 4% irrational booking.com discount?

She also now has a story to tell her guests – make sure you book direct for a genuine discount and don’t be sidetracked by other gimmicky discounts!

 

Email me if you have some other direct booking tactics.

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So you want to get more direct bookings for your vacation rental.  You want to pay less online travel agency commissions. You also want to be able to answer any questions direct.

You only need to do two things:

1 Delight your guests – so they want to come back, and also tell their friends

2 Have a website where they can easily find you direct when they search for your VR name

 

It sounds so simple, and it is, but some shocking research that I’ve done (below) shows very few owners are doing it!

Delighting guests

Delighting your guests is hard work, but you can do it.  If you do it well, they will want to come back.

But you need to make it easy for them to contact you directly, so your name should be simple and memorable.  When they search for you on the internet they need to be able to find you easily.

 

 A free web presence for you – Google Local Business

The best way to be easily found on the internet is to have a listing on Google Local Business.  It is not quite your own website, but almost as good.  It also gives you a listing on Google Maps.

Guests can always easily find you on Google local Business, just by searching for your VR name.  It is easy to set up, and takes about 15 minutes and it’s free!  You don’t have to have your own website, you can just have your telephone number, and guests will find you.

You can also create your own simple website with your contact details.    There are lots of simple ways to get a website, like WordPress.com, or pay a developer.  Google Local Business will also link to your website for free.

Are your competitors listing on Google Local Business?

Surprisingly, in many locations, very few owners can be found because they are not yet listing on Google Local Business, or their own website.

I decided to check this for a big holiday destination near me – the township of Lorne Victoria that has many hundreds of vacation rentals and a huge summer visitor population of around 20,000 people.

How many owners are listed on google Local Business, and how many had their own website?

I searched on Airbnb for a weekend four months ahead, and chose the top 5 VRs listed and 5 from further down (those ranked 16-20).  A mixed sample of 10 vacation rentals.  I then searched on Google to see how many of those I could find on Local Business and how many I could find with their own website.

 

Shocking results!

Very few could be found.

Only 30% (3 of 10) were on local business, and most of these had no telephone number

Only 10% (1 of 10) had their own website

This means almost none would get their own direct bookings.

Now I could have taken a much bigger sample, but I expect the results would be similar. You could do the same exercise for your own local area.

The bad news is that few VR owners can be found directly on the internet by their delighted guests.

The good news is, if you make that small effort, then you will be found on Google maps, and you will get more direct bookings than your competitors.

What else can you do to get direct bookings?

You can send a newsletter to past guests.  Another topic for another day.

Take Action!

In the meantime, if you haven’t already listed on Google Local business, I suggest you do so today.  Here is my previous article explaining how.

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Google has been quietly running some experiments for Hotels that will probably have a big effect on all vacation rental owners.

Google has been playing around with flights and hotels in the travel space for some time. The current idea is travellers can look up flights and then look up hotels – no big deal.

The big deal is that google has a Hotels search portal that travellers can use to look up hotels, but includes other accommodation too.  It allows travellers to look at the hotels and other accommodation in an area, compare them and … BOOK DIRECT!

Skift says in a recent article that Google Hotels has huge implications, with unsettling pressure on online travel agencies.

Google is treading a fine line here.  It wants the ads (mainly from online travel agencies) and revenue that come up with a normal search for accommodation.  It also wants the flights travel link to hotels and accommodation.  It may one day offer advertising to allow end accommodation providers to advertise direct.  In the meantime it is running experiments and keeping its options open.  It is worth keeping an eye open and ensure you are listed ready – more on that below.

You can see the Hotels search portal at  www.google.com/travel/hotels.   It goes to this  innocent looking page:  [click to continue…]

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A previous article discussed the importance of keeping control of access to your rental.  You should control how and when your guests get access to keys for your rental.

But what are the options for getting the keys?  There are 7 different ways listed below.

There are two broad situations.  The easy one is when your guest has direct access to the front door from the street.  The second situation is where the guest has to pass through some common area like a building lobby.

Another test is whether the guest identification is verified before entry.

Let’s take the 7 options separately, and look at the pros and cons of each.

Entry to door direct from the street

1 Lockbox

The simplest way to get the keys is via a lock box near the front door.  Probably the most popular method.  You set a combination, the guest gets the combination direct from you some time before arrival, usually by email.  The guest keys in the code and gets the keys.  In low risk locations (like when you live nearby), the code may stay the same. In higher risk locations, the cleaner sets a unique code each time.  A handy way to set the code is to the last 4 digits of the guest’s mobile number, easy for the guest to remember.  I used this method effectively for may years in my Richmond city rental and my cleaner loved setting the code!

Pros – Inexpensive to install. Simple. Easy for the guest.  Host can arrange different codes.

Cons – As the guest meets no one, there is no verification that the guest is who they claim to be or the number of people entering. In most locations, this is rarely a problem.

The cleaner has to be organised to change the code and the host organised to convey the code to the cleaner.  Also the same keys are used all the time, which in theory could be copied.

If the guest takes the keys home by mistake, they need to be returned quickly.

 

2 Electronic lock

The door is fitted with an electronic lock and the host provides the guest with a unique code.  The code can be changed by electronic message and software, or the host can choose from many preset codes, controlled by software.  The host sends the code to the guest.

Pros – Easy to set a new code.  No keys. The code expires after the guest leaves, low security risk.

Cons – As for 1 above there is no guest identity verification.

Can be expensive to purchase and install.

Relies on the technology working smoothly.

More software for the host to learn.

 

Where entry is via some common area

This situation is more common in urban areas, apartment buildings, and condominiums.  [click to continue…]

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