How to Start a Vacation Rental Business
The United States vacation rental market was worth $14.32 billion in 2021. It’s expected to be worth $21.53 billion in 2026, according to GlobeNewswire. This growth can make starting a vacation rental business appealing.
If you’re interested, there’s one thing you must ask yourself: do you know how to start a vacation rental business?
Becoming a host isn’t something you can just wake up one morning and do. That could be your starting point, but there’s a lot to accomplish between your moment of enlightenment and hosting guests.
With some help from wikiHow, Modern Innkeeper created a step-by-step guide to becoming a host. For those moments when you don’t know what your next move should be, you can come back to this blog for guidance on how to host a desirable vacation rental.
Step 1: Research
Your research can make or break your success. Absorbing as much information as possible can help you understand the industry and determine what kind of guest experience you’ll provide. Learning about the following can get your hosting career off to a hot start.
Location
Where you decide to be a host largely impacts what kind of vacation rental you’ll run. If you decide to have a vacation rental in a part of the country where tourism is seasonal, you need to figure out if your business plan can support the slow seasons.
Location affects guests’ booking choices. Research it as much as possible to anticipate what hosting a vacation rental there would look like.
The Competition
Familiarizing yourself with the competition can help you predict what you’re signing up for. Some factors you’ll want to learn about are what competitors are charging and reviews guests leave them. Looking more into the latter can help you see why guests travel there, what you can provide them that current hosts aren’t and more useful information towards running a successful business.
Your Market
Remote work has diversified vacation rental guests. Traveling families are still common, but now there are guests who work during their trips. Then there are guests who vacation after they work.
Even companies are booking corporate retreats at vacation rentals!
Knowing who’s in your market can help you tailor and enhance the guest experience.
Services and Amenities
Once you have an idea of who your guests will be, you can gauge what services and amenities you’ll provide.
(Here’s a hosting 101 tip: just providing them a place to stay won’t get you far in this business.)
There are certain amenities all guests love when they travel, but services are more specific to who your guests are. If you’ll host guests who love the outdoors, make sure they can enjoy it. For guests who come for total relaxation, see how you can look out for their wellness.
How well you know your guests will show in your services and amenities.
Step 2: Understand Your Finances
Your finances influence what type of vacation rental you’re able to have. And if you’re not the most financial-savvy person out there (which is totally okay!), it’s smart to hire an accountant who can help you navigate starting a vacation rental business.
The obvious cost is paying for the property, but others come up, such as insurance and maintenance expenses. An expert like an accountant can help you understand what’s realistic for you. Once you have the preliminary costs figured out, you can begin setting your prices and identifying areas where you can save.
Step 3: Get Help
You may be the host, but a team creates a winning hospitality operation. We mentioned working with an accountant, but potential resources go beyond a financial expert:
● Landscapers
● Handyman
● Interior decorator
Finding a social media expert can help generate interest in your vacation rental, which leads us to the fourth step.
Step 4: Let Guests Know You’re Open For Business
Marketing your vacation rental is essential. Because how else will guests know the latest and greatest vacation rental is open for business?
Marketing may not be as simple as we’d like, but at the same time, tools like social media can reward your efforts if you put in the work. Here are some other ways to get the word out.
Spend Time on Your Listing
Starting a website for your vacation rental can help you generate business outside of online travel agencies (OTAs) like Airbnb. However, this isn’t a must. Nailing your listing on OTAs is a great starting point, as they’re resources you can benefit from.
Do your vacation rental justice by mentioning its amenities, services, appliances, etc. Also make sure your pictures look professional and include your indoor and outdoor spaces.
Guests have endless options on OTAs. Make sure yours stands out so they don’t have to look at the rest.
Team Up with Local Businesses
Local businesses travelers frequent can be a great way to let them know you have a place for them to stay. Posting a brochure or flier in these businesses (with permission, of course) can raise awareness about your vacation rental.
Use this as an opportunity to incentivize local business owners to work on your behalf, too. Maybe if you receive bookings based on their recommendation, you can give them a free night to express your thanks.
Prioritize Repeat Guests
Guests don’t only have to stay at your vacation rental once. Do what you can to remain in touch with them so they return. Developing a subscription model for guests can keep your place top of mind. Creating an email list is a great way to stay in touch with them and send reminders a premier guest experience always awaits.
Want more tips on how you can enhance the guest experience? Unlock your hosting potential by signing up for Modern Innkeeper’s newsletter today!