Investing in rental properties is one of the best ways to build wealth. That said, the market is getting increasingly competitive, especially when it comes to short-term rentals (STRs).
While the STR industry took a hit during the height of the pandemic, research showed that many guests stayed longer in vacation rentals to fully take advantage of the work-from-home situation, and data forecasts expect the industry to resume its year-on-year growth starting September 2021.
Given the situation, STR owners like yourself need to grab the opportunity to attract repeat customers to grow with the market. For long-term rentals (LTRs), you only have to find a good tenant once a year. With STRs, however, repeat business is the only way to gain strong cash flow and secure business continuity.
As the industry resumes its annual growth, you need all the tips and tricks you can get to encourage repeat guests and remain competitive against other STRs, hotels, and home-sharing services.
Here are a couple of ways to do precisely that.
Target Business Travelers
With COVID-19 slowly letting go and businesses restarting regular operations, a large portion of your guests will be business travelers visiting the area for work and extending their stay for leisure. In the industry, this is called ‘bleisure’ or ‘bizcation’ tourism.
There are several ways to target business travelers, and these are some of them:
- Promote a Work-Conducive Space: Apart from fast Wi-Fi connection and a proper desk, you can invest in a few essential devices that make your rental work-friendly. This includes a phone line, personal printer, and even a laptop. The more work-conducive it is, the more your guest will feel comfortable enough to extend their stay.
- Promote Convenience with High-Quality Service: You’re competing with hotels that pamper their business guests. So, meet them head-to-head with convenience and good service to earn repeat customers. For example, provide quality bedding and branded toiletries.
And since hotels offer concierges, it’s also worthwhile to provide daily housekeeping services to your guests. The absence of these amenities may not bother backpackers and frugal tourists, but it may very well be a deal-breaker for busy business travelers.
- Promote Easy Access to Event Locations: Business travelers look for an accommodation close to their meeting locations. You won’t be able to move your property closer to their venues, but you can certainly offer ease of transportation and accessible parking facilities.
If most of your guests don’t have a car (and won’t rent one either), consider partnering with a cab company to have pick-and-drop services included in your business traveler package.
Think of the things business travelers will prioritize and try to include them in your package. Remember that they’re working out-of-office and will gladly enjoy luxurious convenience.
Start a Referral Program
One great way to attract repeat business is by word-of-mouth referrals. To encourage this marketing strategy, start incentive-based referral programs for the highest chance of guests recommending your short-term rental to friends and business associates.
Here are two of the many types of referral programs you can run:
- Friend Referral Discounts: You can reward or provide discounts to customers who bring in more business. For example, offer guests a free night’s stay if they give you two weekend bookings by referring your rental to their friends and colleagues.
- Discounts and Rewards for Repeat Stays: You can also offer reasonable rewards and discounts to repeat guests to encourage them to return. If their experience with you is fantastic, there’s no reason why they’ll waste the opportunity.
Take inspiration from Airbnb’s Referrals 2.0 program as well. The platform got people to send customized altruistic invitations to their Gmail contacts, giving their friends a discount to travel. The email says something like “gives your friends $25 to travel!” which motivated people to refer Airbnb to their friends.
The program was so successful, it drove Airbnb’s first-time bookings by 900% year-on-year growth, and daily bookings and signups increased by 300%. When done right, Airbnb proved that referral programs could bring in guests and generate a lot of profits.
Promote Upgrades to Past Guests
Of course, you need to stay in touch and follow up with your past guests to keep them interested. There are two effective ways for you to retap past guests:
- Constantly Update Your Listing: Did you install new upgrades, features, or have new amenities for guests to enjoy? Whenever you add or improve things in your short-term rental, update your listing right away and update your previous occupants of the new changes.
- Respond to Negative Reviews: Negative reviews aren’t so bad if you can use them as insights to improve your offer. Any pain points your guests experience are opportunities for you to improve according to their expectations.
So, encourage all guests to leave feedback and respond to their concerns. Being proactive will also boost your referral program, as guests will undoubtedly recognize your willingness to give them the best experience.
From a business standpoint, it’s much easier to gain back previous guests than earn new ones. Therefore, identify and focus on the factors that will encourage guests to book with you again—and make sure that they hear about your upgrades.
Focus on Guest Experience
Aside from providing guests with a clean and comfortable place to stay in, add small details that will enhance their experience with your short-term rental. Here are a few examples:
- Detailed Welcome Packet: Ensure that your guests feel welcomed as soon as they enter the short-term rental. You want them to know how much you care about their stay.
For example, prepare a welcome packet or gift with all they need to know about the rental (e.g., Wi-Fi passwords and technical instructions) and throw in some pleasantries (e.g., free sunscreen or some chocolates) to welcome them in.
- Send “Thank You” Notes After Their Stay: In the same way, make your guests feel appreciated once they end their stay. Give them something to remember you by even when they’ve moved on.
For example, give them a hand-written thank you note, personalized thank you email, or even a small gift (possibly in exchange for feedback, too). As they say, how you end is as important as how you began!
At the end of the day, no amount of features or discounts can beat an amazing experience. So focus on providing your guests with the most memorable stay to have the highest chance of getting them back.
It’s not easy to encourage repeat guests. You’ll need to be persistent in figuring out which combination of strategies works best for your particular short-term rental. So, to get the ball rolling, try attracting business travelers, starting a referral program, promoting upgrades to past guests, and focusing on giving the best guest experience ever.
Before you know it, you’ll be fully booked with a long line of guests just waiting for the opportunity to book your place again!
Any other tips we’ve missed? What strategy works best for your short-term rental?
Image courtesy of Dan Gold