Running a short term rental business is not just about publishing your listing in different sales channels and waiting for bookings to pop up, while peacefully sipping a warm cup of tea. If you want to be successful, you need to keep your friends close and your enemies even closer. Providing your guests a memorable experience is one thing – but you also want to keep an eye on the competition to know how your competitors are doing. Getting informed is crucial, which is why you need to do market research for your vacation rental.
The good news is, we have gathered five tips to help you conduct effective market research. Start following them right away to beat your competitors and increase your bookings !
Gather Information About Your Competitors
First things first, you need to know who your main competitors are and what they are doing. Start gathering information about them:
- Who are they?
- Where are they located? Your main competitors are the ones located in your area, so you want to have a closer look at their business.
- What is their capacity (e.g. number of bedrooms, bathrooms, etc.)?
- What are their speciality and unique selling points: do they offer unique experiences, tours, welcome pack,…?
- What is their price level or pricing model (e.g. is there any discount offered to guests who book directly)?
- How do they advertise their properties? This will help you find ideas to showcase your vacation rental, find your unique selling points, and develop your own advertising strategy.
If you’re doing market research manually, and don’t break out in a cold sweat at the thought of using spreadsheets, you can gather all the information you’ve found about your competitors in a table. Then, it’s easier to update the data regularly and to stay up to date about your market!
You can also use data-driven market analysis to compare your performance with similar properties in your area. This tool will help you improve your listing, pricing and visibility!
Compare The Pricing Models
We’ve briefly mentioned it in the previous section, but we can never stress it enough: it is important that you find information about the pricing model of your competitors, especially if they offer similar accommodation.
What kind of prices do they offer? How do they adapt their prices to the low and high seasons? Do they offer higher rates during local events (eg. concerts, festivals…)?
This will help you set your prices in accordance with the market. It would be a shame to scare off guests by offering prices that are far too high for your type of property, just because you were misinformed about the current situation in your market! However, offering extremely low prices could also have the same effect on your guests: they might think that it’s a trap, that your property has some severe issues. That’s why it’s important to find out the correct prices!
Compare Your Occupancy
Another essential aspect to look at when doing your market research is the level of occupancy of your competitors’ properties.
The level of occupancy refers to the number of dates during which your property is available in a given period.
The occupancy depends on a variety of factors and you first want to understand your level of occupancy before checking your competitors’. There are two main ways to find out how your competitors are performing in this area:
- Go to their website or sales channel and try to book
- Use an Analytics tool which uses rich data and directly compare your own occupancy to your competitors’.
Comparing your occupancy is another way to help you set your pricing, define marketing strategies and promotion campaigns.
Find Your Competitors’ Guests’ Reviews
Once you’ve gathered basic information about your competitors, you want to look at the reviews left by their guests. Are they positive? Negative? What did their guests like/not like?
This information will help you understand what the guests want and like, and will help you adjust your offer accordingly. For example, if a guest complains about the lack of comfort or the dirtiness of your competitors’ property, make sure to make your rooms cozy and comfy by checking their bedding, the colour scheme, and the cleaning service. To offer the best experience possible to your own guests, you can have a look at our tips to make your vacation rental stand out.
As a result, you will be able to attract the guests of your closest competitors!
Understand Your Own Guests
In the short term rental market, you are in competition with other vacation rental businesses to attract guests. To beat your competitors and go into your market research in depth, you need to understand your own guests.
Define Your Target
First of all, you need to ask yourself: what kind of guests am I targeting?
Do you like pets? Is there a lack of pet-friendly rentals in your area? Perfect! Then, you can promote your property as a pet-friendly vacation rental. Pet lovers will love you and book your home more frequently!
Do you have a garden and want to attract families? Put a swing in your garden, provide your guests with toys and make your home a safe place for small children. Leave some brochures regarding family-friendly attractions nearby. Make your guests feel at home!
Draw Your Guests’ Profile
Who is actually renting your property? Single people, friends, young couples, families, pet lovers…? Where are they from? Which are the most popular activities near your property that attract them (hiking, cultural trips, beach, restaurants…)? Once you know all that, it’s easier for you to define your strategy and to promote your vacation rental in the right way. Check out this article to know what specific guests need and want.
Ask Your Guests To Leave A Review
The best way for you to get this information is to ask your guests to leave a review. Provide them with a guest book that they can fill before they leave, and follow each other on social media! Remember, good online reviews will also boost your ranking in sales channels and increase your chances of receiving more bookings!
Answer Guests’ Complaints
It’s really hard to make everyone happy. No matter what you are doing, you will certainly receive complaints from unhappy guests. Don’t ignore them! Understand them and answer them carefully. This will help you understand what you can improve and will show your potential guests that you are open to discussion and want to offer them the best experience possible!
Develop Your Strategy !
Thanks to your market research, you have all the tools you need to improve your listing and get more bookings. It’s time to develop a new strategy accordingly!
- Improve your vacation rental by offering unique experiences to your guests
- Showcase your unique selling points: what do you have that your competitors don’t?
- Adapt your pricing to the competition: don’t be too greedy, don’t be too cheap, find the perfect balance!
- Monitor your competitors by checking their occupancy, reading their guests’ reviews and make changes in your property or in the services you provide if needed.
- Take care of your own guests, help them spend a great time at your place, take their positive/negative reviews into account!