Unlocking success with your vacation rental management system and KPIs
Unlocking success with your vacation rental management system and KPIs
Are you ready to excel your vacation rental business to new heights? We'll explore the power of property management metrics and how they can help you scale your business and outperform your competitors. Anything is possible if you keep track of your KPIs and have a trusty vacation rental management system to help you do so.
Maximizing profits and reducing commissions with your vacation rental management system
Revenue is a primary metric for property managers, and tracking your monthly and annual revenue is crucial for understanding the financial health of your business. With a good channel manager, a tool to automate distribution, you can gain a unique advantage: some charge a flat fee instead of commissions, allowing you to retain more of your hard-earned profits. By eliminating the commission-based model, you can maximize your profits and have better control over your financials. Dynamic pricing tools and "mark-up" strategies also enable you to optimize your pricing and increase profitability. You can set the right price points for through your channel manager based on market demand, guaranteeing you make the most of every booking.
Length of stay and occupancy rates
Achieving high occupancy rates and optimizing the length of stay is paramount for maximizing your bookings and revenue potential. Through a vacation rental management system you can gain access to powerful tools to efficiently manage your calendar, ensuring you cover any potential breaks and minimize gaps between bookings.
By analyzing historical data and market trends, you can strategically set minimum and maximum stay requirements, attracting guests who meet your property's availability and reducing orphan nights. A comprehensive vacation rental software also allows you to customize your booking rules and automate the booking process, streamlining operations and ensuring a smooth experience for you and your guests.
Direct bookings and SEO techniques for your short term rentals
Direct bookings present a golden opportunity to reduce reliance on OTAs and increase your revenue. Many vacation rental software providers will offer packages to help you build and optimize your own website for vacation rental and target your audience and market. With a professionally designed and user-friendly website, you can showcase your short term rentals and highlight their unique features and reduce the reliance on online travel agencies. Through an optimized SEO website, organic traffic to your website will take off, direct bookings will increase and the authority score of your site will improve.
Streamlining operations
A reliable vacation rental management system helps you to streamline operations by providing tools to automate and improve your property turnover processes. From coordinating cleaning schedules to managing key handovers, a vacation rental software ensures a seamless transition between guests, freeing up your time and improving your efficiency.
Automated workflows and communication features let you easily coordinate with cleaning services, maintenance teams, and guests, guaranteeing a smooth and efficient turnover process. Through automating and streamlining these tasks, you can focus more on the guest experience, increase chances of positive reviews and repeat bookings.
Fit into trends and needs with your vacation rental management system
In today's travel landscape, sustainability is not just a passing trend but a necessity. Having sustainable properties aligns with the increasing demand from eco-conscious travelers and improves visibility in filters and search results on OTA websites. A comprehensive channel manager helps you showcase your sustainable initiatives and gain an edge in the market, attracting travelers who prioritize environmentally-friendly accommodations.
Also, with a vacation rental software’s sustainability features, you can highlight your property's green practices, such as energy-efficient appliances, water facilities, and eco-friendly amenities. Make sure your property is in the search results of the eco-conscious guest.
Vacation rental management KPIs
Property managers need to leverage various key performance indicators (KPIs) to track and optimize these key metrics effectively. Property management KPIs are essential for measuring progress and evaluating operations in a vacation rental business. They provide valuable insights into the performance of your properties and help you make data-driven decisions.
Let's take a look at some crucial KPIs and how they can contribute to your success:
Tracking occupancy rates
Occupancy rates help identify trends and compare performance with similar rentals in the market, enabling adjustments to rental prices and marketing strategies. By tracking these KPI’s you can develop a clear picture of the level of demand for your property and allows you to set minimum and maximum stay requirements that align with your property's availability.
How to calculate it: Divide the number of days your property has been rented by the total number of days that it’s available.
Sales profit margin per accommodation and booking
These margins indicate the profitability of your property by analyzing revenue and expenses, highlighting areas that could be underperforming or margins your property excels in the most.
How to calculate it: Subtract your total expenses by your revenue generated.
Number of bookings
The number of bookings is a basic yet fundamental KPI. We calculate it by dividing the total number of bookings on your property by the total number of enquiries over a specific time frame. This KPI lets you evaluate your company’s conversion rate.
How to calculate it: Most OTAs and vacation rental software tools automatically calculate the number of bookings you have over any given period.
Renewal of revenue (ROR)
This KPI indicates which customers have booked with you for a second time and how much revenue they have generated for your company in total. If you have a low ROR, you should look at improving your guest experience and building relationships with them, to improve their rate of return.
How to calculate it: Divide your total number of returning guests by the number of guests who were available or up for renewal. Multiply the result by 100.
Cost of turnover
Efficiently managing unit turnover helps minimize costs and maximize profitability. Your vacation rental management system lets you streamline turnover processes by automating tasks, saving time, effort, and potential revenue loss between guests. Considering the expenses associated with cleaning, maintenance, and downtime between guest stays is essential for efficient operations. If you have a high turnover rate, this can impede on your company’s profits. Here are 3 ways to reduce your cost of turnover:
- Offer discounts for extended stays
- Make your property remote-worker friendly
- Create a comfortable space to encourage longer stays
How to calculate it: Add all of the downtime expenses to calculate your total unit turnover cost.
Average days-to-lease for your short term rentals
Comparing the time it takes for a property to get booked with market averages is important. This KPI will help you identify whether you need to improve your marketing strategy, be more present on OTA’s or better the booking process to reduce abandoned carts.
How to calculate it: Take a specific time frame and add the days between bookings. Then divide them by the number of bookings over that time.
Repair and maintenance fees
Tracking and budgeting for unexpected costs are crucial to ensure consistent guest experiences and financial health. Having a high volume of guests and booking turnover can take its toll on your property and its furnishings. Regular inspections and maintenance are paramount to be able to assign your budget appropriately.
How to calculate it: Keep track of your repair and maintenance fees and add them up.
Your path to success for your short term rentals
A comprehensive vacation rental software is a go to toolkit to track, identify and improve your business’ functions and improve your KPIs. Offering revenue management, direct bookings, streamlined operations, integrated channel manager, unified inbox and more. A good vacation rental management system offers a comprehensive suite of tools designed specifically for property managers like you.
About Avantio
Avantio vacation rental software is a leading global provider of vacation rental management software solutions, with a broad customer base around the world. Founded in Valencia, Spain, Avantio is known for its innovation and commitment to excellence in the vacation rental industry.
