While potentially financially rewarding, would-be holiday rental entrepreneurs need to understand the market in order to make their holiday rental home business a success. Here are a few things to consider.
Choosing the right location
As with buying a property to live in, it is essential to have a good location for a successful holiday business. Holiday guests will be looking for popular locations or attractive holiday spots which are easily accessible. Whilst it may be a romantic notion to rent a holiday cottage in a secluded location, travellers will not wish to visit in large numbers if it is not in a desirable place, and cannot be easily accessed.
If you are considering buying, using property search sites to understand the local housing market should give a good idea of how long properties typically stay on the market, which should give a good idea of the location’s desirability. Vrbo’s recent search data suggests that Cornwall, Devon and Norfolk were the most searched locations for holiday-goers this summer. Do your homework, and above all remember: location, location, location.
Choosing the right kind of property
Your property must be suitable for the location and the needs of your holiday goers for it to be regularly booked. Guests will expect certain aspects to be catered for depending on the location. This winter, for example, homeowners will need to ensure that the property is suitably-prepared to keep guests warm, with adequate heating and insulation.
If you are looking to maximise interest in the spring or summer, outdoor space should also be a consideration. The Covid-19 pandemic has led to a significant desire for outdoor space. Holiday homes with outdoor space where families can relax will be a large draw for holidaygoers. Consider what your guests will most desire in your area, and cater to these needs.
Preparing the interior for guests
Appearances are important, and so is the interior of your holiday property. Styling and designing your home is a great first step, ensuring that the pictures on your listing set you aside from the competition from the start. Making your property look incredible will be an important factor in attracting holidaymakers to book your property.
Whilst there is no one-size-fits-all, have a think about the type of person that you are looking to attract, and what this group will tend to appreciate. Applying light colours with colour coordination are good principles for putting guests at ease, but researching similar holiday rental properties in your area will help to style your ideal holiday home offering.
On a practical level, installing materials and flooring that will be hard-wearing and likely to hide stains will be a positive investment. Families may bring muddy boots in after walks in the woods or countryside this winter, so installing durable materials that protect against easy wear-and-tear will make life easier for the homeowner.
Marketing the property
There’s no point in having a great holiday rental property if you can’t reach your potential guests so marketing it effectively is essential. It is recommended to take high-quality photos of the property which can be uploaded online, so it’s important for your property to look its very best.
It’s clear that travellers want to visualise their stay, as shown in Expedia Group’s ‘What Travellers Want’ research. Here, 57% of people said that detailed photos would give them the confidence to book an accommodation. Arranging for a photographer to take pictures of the property is a good step, but taking pictures which are well-lit and which show off the properties unique features will also work well.
Following, registering the property for holiday rental on a site such as Vrbo will enable your property to be seen by a captive audience of potential guests looking for a place to stay. To help holiday rental home owners, Vrbo have launched a programme called Fast Start to help new properties capture vacation rental demand. This programme removes the cold start problem new properties can experience when joining sites, tapping them right into the huge traveller demand that the site delivers.
If you already have a holiday rental property listed on a platform and want to switch, it’s worth checking out Vrbo as new properties that join will display a ‘New to Vrbo’ badge for 90 days and feature their review score based on reviews from other travel sites. Additionally, new properties on Vrbo can also immediately boost their profile to increase visibility if they have a 4.5+ review rating and have earned more than £2,000 in the last year on other rental company sites.
This programme offers a proven positive impact for those properties, as those who join received a 25% increase in bookings and a 140% increase in gross booking value. With this in mind, it’s worth taking time to select a platform that tends to attract the kind of customers you are looking for, as well as one that has policies that are a good fit for you.
Knowing the rules and regulations
Another serious consideration for those who are considering letting a property for holiday rental are the rules and regulations that apply to holiday lets. In the UK, you must adhere to a series of rules to qualify as a ‘Furnished Holiday Let’. To count as a holiday let, it must be furnished and available for 210 days a year, and, to qualify for ‘furnished holiday let’ tax status, it must be commercially let at least 105 days in a year.
Furthermore, single lets must not last longer than 31 days continuously. There are also duties and obligations to consider around health and safety, potential impacts on your mortgage, and considerations around insurance, particularly if you employ a housekeeper or cleaner for your property. It’s important to look at all the specific rules and regulations that must be followed in order to let your home in accordance with local law.
Managing the property
Managing a holiday rental property can be a time-consuming task, but there are a variety of options to make your life easier.
For those who wish to manage the property themselves, a key priority is installing a key safe or a smart lock in a secure location that guests can access without you being there. This is an inexpensive way to allow guests to access the property, meaning that pick-up and drop off of keys can be done remotely and with minimal hassle.
Having a clean property for guests to arrive at will also encourage repeat bookings. Hiring a housecleaner may be the easiest option to avoid any negative reviews. In this case, there are specialist cleaning services for short-term rental properties, that will prepare the property especially for new guests.
Our recent ‘Traveller Value Index’ research showed that enhanced cleaning measures was a leading consideration for travellers looking to book, coming second in importance to the ability to get a full refund.
If you wish to take a hands-off approach, holiday rental homeowners can use a property manager who will look after the everyday running of the holiday rental property. Whilst this will significantly eat into financial margins, this could be an option for those who are looking for a reliable company to take on the bookings and guest management of your investment property.
Finally, it is essential to provide a good WiFi connection. While people are often looking to ‘get away’ when staying in a holiday rental, nowadays that very rarely means foregoing access to the internet.
Whether it’s just for their recreational web browsing in the evening, looking for local information, or for those guests working away from the office, people are likely to need to a strong internet connection that they can rely on.
In Expedia Group’s ‘What Travellers Want in 2021’ research, we found that 70% of travellers said they would be willing to pay extra for their favourite amenities and services. On those who were travelling to holiday rental properties, travellers said that high speed internet was the amenity that they most would want.
I cannot stress this enough: guests will be upset if the cottage they’ve booked to escape the city does not have a strong enough connection to support a Zoom call or a meeting over Microsoft Teams. In the post-pandemic age that we live in, the needs of digital nomads must be considered.
Whilst running a holiday home rental business takes some thought, it can be a financially rewarding enterprise that can reap benefits and provide an extra source of income. By considering it carefully at the outset, homeowners looking to make additional revenue from a holiday rental business can position themselves for repeat bookings and a strong, regular revenue stream.
*James Cassidy is Senior Director, Partner Success Vacation Rentals, EMEA at Expedia Group