Holiday rental income: How to increase it?

This post will help you increase your holiday rental income. The situation is as follows: You've been running your tourist housing rental business for just over a year. So far, your occupancy rate has fluctuated around 80%, and with it, your holiday rental profits have remained within your targets. Great! Until these past few months... You don't really know how, but the number of bookings has decreased. To alleviate this, you've lowered the nightly price of your accommodation and just added extra services to your Airbnb, like Netflix, or installed air conditioning. Even so: holiday rental income is falling. What the **** is going on? Let's look at some typical causes for this decline and what you can do as a host to overcome this stagnation. Before we get into it, perhaps you should delve deeper into some concepts:

• How much does an Airbnb host earn?
• Profits from tourist apartments vs profit per hour
• Pricing strategies for tourist accommodation
• Pricing errors in tourist flats

Holiday rental income is decreasing... and it's your fault

This is the best situation of all. Don't you believe it? Well, if holiday rental income is falling because you, as a host, are doing something (or not doing it). Therefore, there is something under your control that you can change to improve! Now we are going to identify those causes.

You've been a lucky host 🍀

It's possible that when you started your holiday rental business, income skyrocketed quickly. Perhaps two elements combined to create this perfect storm:

• On the one hand, the supply of accommodation was scarce.
• On the other hand, traveler demand was through the roof.

In this situation, having high holiday rental income was simple. Perhaps a couple of photos and a brief description were enough. As the supply was scarce, your listing always appeared first for your area. However, as competition has notoriously increased – and you knew this would happen sooner or later – potential guests are becoming more demanding. And, of course, they prefer better accommodation.

How to increase your tourist rental income

The good news? If you are in this situation, increasing your tourist rental income is really simple. Start with the easy things (remember that, according to Pareto, 20% of the work will bring you 80% of the benefits):

1. Improve your Airbnb, Homeaway or Booking photos. 💡 Here are some tips for taking good photos of your tourist flat.
2. Make the Airbnb listing description easier to read.
3. Get 5-star reviews from your Airbnb guests.

Tip: Don't go crazy adding extra services. Once you have the indispensable list of things your tourist accommodation must have, only add or update those that provide real value to your guests. For example, replacing an old mattress with a new one provides more value than a new set of glasses.

Your tourist accommodation profits are falling... and it's NOT your fault

If your tourist accommodation profits are falling and it's not your fault – that is, there are elements you cannot control – we can find ourselves in two scenarios.

Scenario 1: Competition in your area is increasing

As tourist rentals become more popular, competition in your area heats up. Hundreds of new accommodations appear in your area every day! This is not a revenue management trick for Airbnb. It's basic economics: with a greater supply of a good, with constant demand, the price decreases. Applied to your business: your tourist rental income will tend to decrease. If this is your case, conduct a thorough market study and pay special attention to the competition. Do you observe any patterns? Can you apply any of their techniques? Once you've done this, you may have already come up with some ideas that you can quickly implement for your business. However, in platform searches, you still appear on the second or third page... (Not being on the first page is ostracism). If this is your case, you have two options:

• Follow these SEO tips for tourist accommodations.
• Open new channels (e.g. Booking) or Fairbnb, a great alternative to Airbnb.

[caption id="attachment_10488" align="alignnone" width="1024"]

Defenestration of Prague (Johann Philipp Abelinus, 1618) or Airbnb throwing your listing to the second page[/caption]

Scenario 2: Demand for tourist accommodation in your area is falling

This second scenario is less common than the previous one. However, there are some markets that may experience partial or total reductions in demand due to external factors. Note that this scenario does not describe the low season – if this is your case, check out our post on making money with Airbnb in the low season –. An abrupt change in guests' tastes and habits is common in undiversified tourist markets. For example, if an amusement park in the middle of a wasteland closes down, holiday rental income in the area will suffer. In this case, there is little you can do to improve. Try to have the best listing for the best accommodation in the area. However, be aware that you cannot create demand out of thin air. That said, it's time to adjust the price. The change in demand must be reflected in the prices you charge per night at your accommodation. If you need help with this, check out our post on demand-based pricing. If adjusting your prices makes it unprofitable, perhaps you should reconsider continuing with the business. In some cases, the market simply stops offering you the tourist rental profits you expect, and the smartest solution is to close. Doubts about the financial aspect? Download the free financial plan for tourist accommodations.

What is the situation regarding your accommodation's holiday rental income?

It's easy to find out. To see what the situation is in your case, take a look at the competition in your market. Look at listings similar to yours and observe what nightly price they are charging and their accommodation occupancy rate. If it's around 80% in the next 15-30 days, copy those techniques for your Airbnb. Another idea is to ask friends for feedback; ask them to evaluate the most relevant aspects of the accommodations in your area – don't tell them which one is yours –. Getting third-party opinions is a great option for detecting improvement opportunities... and thereby increasing tourist rental income. It is also advisable to carry out an  Airbnb market study to detect patterns in both supply and demand. If your accommodation is already at the top of your area and your holiday rental income is still not taking off, you should consider reorienting the location of your accommodation to other areas with higher potential tourist rental income.

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