Marketing Your Vacation Rental Home Part Two – Online Marketing

This article, part two of a series, will help vacation rental home owners learn more about marketing a rental property online. It is important to understand that people who are looking for a vacation rental home are generally looking for more than they can get with a brand-name hotel. They typically want space, privacy, laundry facilities and – almost always – a cheaper rate than if they stayed in a hotel.

The one major difference between booking a private vacation rental home and a branded hotel chain is that you know ahead of time what you will be getting when you book with a hotel chain. Plus, if things are not quite right, you always have the manager on hand to sort things out for you. On the other hand, vacation rental homes are almost always privately owned and operated, and in the past you never could be sure just what you would be getting.

The Internet has changed everything about marketing a rental property. Now, prospective renters can visit a website to view pictures and read information about a vacation rental home before making a final decision – which means that online marketing of a rental property should be a major priority.

The Benefits of Marketing a Rental Property Online

By marketing your rental property online, you have the perfect low-cost way of showing that vacation rental home to the world. Online marketing can put you on an even footing with the big hotel chains; in fact, it actually gives you an advantage. While their sites will be practical and informative, you can take time and TLC to make your site warm and welcoming while reassuring prospective renters that your vacation rental home will more than fill their requirements.

Plus, establishing a website for your vacation rental home gives you a global presence. While the vacation rental market in the United States may still be in its infancy, it is the norm in many other countries for families to stay in vacation rental homes rather than hotels. Marketing a rental property on the Internet can help an owner in the U.S. reach families from abroad and draw them to the home.

Putting Your Vacation Rental Home Online

There are several ways in which you can use the Internet for marketing your rental property:

Create your own website
List your vacation rental home with a property rental agent or manager
List your vacation home on one of the many vacation rental sites
While all three options for marketing a rental property have their place, creating your own Internet site is essential. Having your own site gives you complete control of how your vacation rental home is displayed to potential renters. If someone contacts you wanting to rent your home, do you really want to send them to a site that contains other homes similar to your own? Remember, there are always other owners out there who are also involved in using the Internet for marketing their rental property and who will undercut you just to get the rental. Listing sites can help you reach more people, but in the end you want a renter to see your individual site.

Creating Your Own Site for Your Vacation Rental Home

Your website should consist of the following standard pages, which are all important for optimally marketing your rental property:

Home Page
Property Description
Photo Gallery
Visitor Information
Rates
Contact Information
The Home Page
The Home page is probably the most important part of your strategy for marketing your rental property, as this is a visitor’s first point of contact with your home. Make sure the design of your home page is simple, clean and uncluttered. Consider adding two pictures instead of just one to make your site stand out from the competition. One picture can be the traditional front-of-the-home shot, while the other image can be of something that sets the rental property apart – a great view, a beautiful sunrise, a scene by the pool, and so on. You can also consider taking a picture of the house lit up at night, which will certainly make the image memorable.

The Text

You will also need to write text that helps you with marketing your rental property. This step does not have to be difficult, but you should take time and give some thought as to what you want to say. You want to sell your home, not just state the facts. The text should help prospective renters imagine kicking back by your pool with a cool drink while watching the kids splash around. Set the scene first, rather than starting with a list of the best things about your vacation rental home. Be descriptive and use your imagination so that you are marketing your rental property in a way that will make the reader want to find out more.

In order to get some ideas of what to focus on in the text, ask yourself the following questions:

What do you your family and friends love about the vacation rental home?
What do you enjoy doing when you are there?
Is there something you have found that you love but is not generally known about on or near your vacation rental home?
What special features does your home offer?
What would you want to know if you were going to rent this property?
General Picture Ideas
The use of good quality pictures of your home’s exterior and interior cannot be overstated for successful marketing of a rental property. In a highly competitive area such as Florida, pictures could make the difference between securing a booking or missing out. Sometimes a potential guest will be considering several properties with the same features and at the same cost. In this case, guests will undoubtedly choose the vacation rental home they like the look of. This means that quality pictures are critical for successful marketing of your rental property. Common faults are images that are badly lit, that are taken from strange angles, that feature pool decks and porches devoid of furniture, or that have inappropriate things in view (wet towels, piles of papers, and so on).

Some additional things you may want to consider when marketing your rental property with photos are:

Consider using flowers. A fresh vase of flowers can be welcoming, but don’t go overboard, and don’t be tempted to move one vase of flowers around as you take pictures – it will look silly if the same vase keeps turning up in different rooms.
Set the tables. In the formal dining area, open a bottle of wine, fill wine glasses, light candles and use napkins. In the kitchen dining area, set it for dinner with the family, with more casual place settings, a pitcher of lemonade, and so on.
Make sure the kitchen of your vacation rental home sparkles. It should be spotless, with a bowl of fruit on the counter. Basically, you will want to make the home looked lived in and like you are just waiting for guests to arrive.
Make the bedrooms welcoming by turning down the sheets, fluffing up the pillows, and placing magazines and books on night tables.
Photograph the bathroom in the evening. Fill the tub, add lots of bubbles, light candles, have fluffy towels and perhaps a glass of red wine on hand to create an atmosphere.
Use a digital camera so that you can take hundreds of pictures of your vacation rental home. Even if you are not a photographer, you are sure to get some good ones that you can use for marketing your rental property.
Marketing a rental property with your own website can be a part of a strategy that uses many other techniques, from print ads to online listings on real estate marketing sites, allowing you to attract more renters to your property. Future articles in this series will explore additional avenues for marketing your vacation rental home and their benefits to you.

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Vacation Rentals by Owner Sites: Are they Profitable?

There are literally hundreds of Vacation Rentals by Owner sites and it seems new ones are appearing every week. On the face of it, it may seem like making money from a “vacation rentals by owner” site is easy: all you have to do is get 1,000 owners to sign up, each paying $100 per year, and you can generate an annual income of $100k with almost no running costs, right?

Well, it’s not that simple. For a start, getting vacation rentals owners to pay for a listing on your site is not that easy, and secondly, if you expect to keep them, you will need to generate enquiries and bookings, which only come as a result of spending money, time and effort marketing your “vacation rental by owner” site.

Compare Owner Holiday Rentals (http://www.compareownerholidayrentals.com) recently decided to take an analytical look at the business of running a “Vacation Rental by Owner” site.

Some of you may be familiar with Michael Porter’s famous framework for analysing the attractiveness of an industry: based upon Porter’s model, you can predict how profitable a particular industry is likely to be in the long term. We have used this model to analyse the attractiveness of the business of running a “vacation rentals by owner” site.

Porter’s model says that there are 5 factors which influence the level of competitive rivalry, and hence the relative profitability, of an industry. These are:

1. The threat of entry by new competitors.

2. The intensity of rivalry among existing competitors.

3. Pressure from substitute products.

4. The bargaining power of buyers.

5. The bargaining power of suppliers.

These factors can either have a positive or negative effect on the long term profitability of an industry. Let’s take each of these in turn and see how they can be applied to the business of running a “Vacation Rentals by Owner” site.

1. The Threat of Entry by New Competitors: As already indicated, there are new competitors entering the “vacation rentals by owner” business on an almost weekly basis. The main reason for this is that the “barriers to entry” are so low: anyone with some IT skills can quickly build and publish a site, with the only cost being their time and some hosting charges. These low “barriers to entry” and the presence of so many new competitors are a negative for the profitability of the industry.

2. The Intensity of Rivalry among Existing Competitors: Free trials, free listings, reduced prices: all of these are indications of the increasing level of rivalry among the existing sites. Many of the new “vacation rental by owner” sites offer the first 6 or 12 months free of charge. Although some of the established “vacation rental by owner” sites have tried to hold the line on pricing and special offers, the indications are that they are finding it hard to hold their market share. Again, the level of rivalry is a negative for the industry profitability.

3. Pressure from Substitute Products: By “substitute “products, we will restrict ourselves to other ways that vacation rentals owners can choose to market their properties. Hence, this includes newspaper / magazine advertising (a medium in declining usage), using rentals agencies (still highly used, particularly in Europe) and marketing via the Owner’s own website (which seems to be increasing, particularly with the advent of Google Ads). All the evidence suggests that more owners are using the internet for advertising their vacations rentals; even the rental agencies now heavily use “Vacation Rentals by Owner” sites for marketing their properties. Also, although there are exceptions, using the commercial “Vacation Rentals by Owner” sites is very much more effective than using a personal site. Hence, the pressure from substitutes is relatively low, the industry is growing and this is a positive for the industry profitability.

4. The Bargaining Power of Buyers: Largely because there are so many options, including free trials and special offers, buyers (owners) have a lot of power when deciding where to list their properties. Also, the cost of switching to a different “vacation rental by owner” site is relatively low. Most owner’s review their advertising on an annual basis, based upon the results (enquiries, bookings) that they have received. “Vacation rental by Owner” sites that fail to produce results are not able to persuade owners to renew. Many new sites that start off by offering free trials fail to turn these into paying customers because they have not been able to attract renters in sufficient numbers to generate rental bookings. Hence, the bargaining power of buyers (owners) is a negative for the industry profitability.

5. The Bargaining Power of Suppliers : In the context of running a “Vacation Rentals by Owner” site, the main services that site owners buy are “hosting” ( which is cheap and plentiful) and marketing/ advertising ( which is plentiful, but not that cheap). Since hosting is relatively unimportant, let’s focus on marketing/ advertising. As more and more “vacation rental by owner” sites come online, getting good results on search engines such as Google is getting harder and harder. Hence, “Vacation Rentals by Owner” sites are experiencing the need to invest more in targeted marketing and advertising in order to attract renters to their sites. This eats into margins and is affecting the profitability of the business. Hence, although previously neutral, the bargaining power of suppliers is increasingly a negative for the industry profitability.

So, with 4 out of 5 factors being negative, does that mean that this industry is so unattractive that it is impossible to make money running a “Vacation Rentals by Owner” site?

Not necessarily, although undoubtedly it is getting tougher. In particular, smaller “me-too” vacation rentals by owner sites are unlikely to be able to be profitable enough to stay around for the long term, although new ones will probably continue to enter the market, start off by offering extended free trials, stay in the market for a couple of years and then fold.

However, there are probably two ways you can build and maintain a profitable business in this industry.

Firstly, some large “vacation rental by owner” sites will achieve sufficient scale (possibly through acquisition) to use their size to generate competitive advantage. These sites will have the critical mass of owners and visitors to be economically viable. As evidenced by the recent acquisitions that the WVR Group have made, it’s likely that some of the better smaller “vacation rental by owner” sites will get absorbed into such larger entities. Currently, VRBO and the WVR Group, (which owns a1vacations, Greatrentals, Cyberrentals and Holiday-Rentals amongst others) are the two 800 pound gorillas in the industry. Expect further consolidation to happen in the coming years.

However, it is also possible for a smaller “vacation rental by owner” site to be successful. To do this, it will need to carve out a profitable niche, possibly focusing on a particular geography or demographic to build competitive advantage. By focusing marketing efforts on a targeted group, these smaller sites will be able to attract vacation rental owners and renters. Hence, expect to see an increase in the number of specialist sites ( e.g. Petfriendlytravel focusing on renters with pets), possibly offering add-on services that differentiate them from the larger “vacation rental by owner” sites. Indeed, many small regional sites offer full vacation rental management services, from booking through handling changeover, as an alternative to the model which relies upon the owner to manage everything themselves.

Conclusions:

It is inevitable that the business of running a “vacation rental by owner” web site will change in the coming years. Although the overall market will grow as people continue to move away from traditional package holidays and embrace holidays using vacation rentals, it is likely that “vacation rentals by owner” sites will split into two camps: the large sites with the critical mass to cost-effectively market thousands of properties, and the smaller, niche sites, that offer some unique differentiating factor to be attractive to a more targeted group of owners and renters.

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