When you’re renting out your holiday home, one of the most important things you need to consider is the practical aspect of guest arrivals. More specifically, you need to consider the following questions: How and when can your guests check-in? Will there be someone there to greet them? And what happens when it’s time to check-out?
Old school ways of doing things still persist in some locations, but times are changing and guest booking habits aren’t the same as they used to be. Offering flexibility around arrival and departure dates could be key to securing bookings in competitive markets.
This article outlines some of the things you need to consider when setting your check-in and check-out rules for your vacation rental.
Avoid restricted check-in days – Make sure you offer 7 day check-in to guests
Traditionally, many vacation rentals had very strict rules surrounding various aspects of bookings, including check-in and check-out days. For example, many rental properties required guests to check-in and out on Saturdays. This is great for the host, since they only need to be available one day a week.
But from a guest perspective, to put it bluntly, it sucks.
Unfortunately, such restrictive rules are simply no longer reflective of the way many people travel nowadays. Guests have to juggle flight timetables, work schedules and countless other commitments when planning the logistics of their trip. With the coronavirus pandemic disrupting travel even further, flexibility is absolutely essential for guests. If your check-in and check-out days don’t match their requirements, you’ll miss out on vital bookings. By limiting your check-in and check-out days you’re catering exclusively to a very narrow subset of guests, which may not be sustainable in the long run.
Ideally, you’ll offer 7 day check-in (and check-out) meaning that you accept bookings commencing (and finishing) on any day of the week. Whilst this brings an extra challenge in terms of cleaning the property and welcoming guests, you maximise the number of bookings you’re able to receive. Even if 7 day check-in isn’t practical for your business, the more days on which you accept guests, the more appealing your property listing will be.
Set appropriate minimum stay requirements to increase your audience base
One of the major issues with the old-fashioned check-in/check-out day rules is that it was incredibly restrictive in terms of how long guests could stay at the property. For example, if guests have to book in increments of a week, you might have an easy-to-manage calendar, but you’re missing out on the considerable number of travellers who might (for example) want a 10 day vacation but can’t or don’t want to stay for two full weeks.
Similarly, by setting excessive minimum stay requirements, you’re overlooking the increasingly-important short-stay bookings. Stays of less than 1 week have grown in popularity in recent years, especially in urban markets. You can maximise your revenue from these shorter bookings by charging higher rates for shorter stays in order to offset “arrival costs” – more on that below.
Reduce your advance notice period and use last-minute bookings to fill gaps
Speaking of shorter stays, many last minute bookings are for shorter periods. Last-minute bookings are especially important in the post-covid vacation industry, and in some markets they’re now the fastest growing segment of bookings. To secure as many bookings as possible during this volatile period, reduce your minimum advance notice as much as you possibly can. That means accepting bookings made as close to check-in days as you are feasibly able to without compromising the quality you provide to guests.
Of course, the upside of strict Saturday-to-Saturday bookings for property managers is that it ensures a full occupancy calendar. A maximum of four bookings per month is also pretty straightforward to manage. Conversely, saying “check-in any day, 3 nights minimum stay” gives you hundreds of possible booking periods in the same month – some of which may go unbooked.
By offering more flexibility you do run the risk of unbooked nights. However, in the vast majority of cases the benefits outweigh the risks. Especially in highly competitive markets, you’re often able to fill up empty nights with shorter and last-minute bookings. Depending on how things are going in your market you can offer reduced rates to incentivise last-minute bookings and fill gaps in your calendar, or you could even increase your rates during periods of high demand or low availability elsewhere.
Calculate your cost-per-booking to balance profitability with guest appeal
In order to set appropriate stay requirements, you should calculate your cost-per-booking (or “arrival cost”) and work out how that impacts your profitability. That means figuring out how much each guest check-in costs, for example in terms of cleaning costs or having staff on standby to greet them. Then consider how many nights a guest needs to stay in order to be profitable.
By calculating how much each arrival costs you can budget more effectively for any potential unbooked nights, or for the increased overheads caused by more frequent check-ins. This way, you can set your prices appropriately in order to retain your profitability whilst still being appealing to guests.
In order to receive as many bookings as possible, it’s important to be as accommodating to guest needs as you can. That means being open to receive guests on as many days of the week as possible, permitting stays of varying lengths (and pricing those appropriately), and reducing your required advance notice whilst retaining your quality standards.
It sounds complicated, but by calculating your arrival costs and understanding the demand fluctuations in your market you can set your rules and prices appropriately in order to retain profitability and maximise your guest appeal.