Dominating the UK Vacation Rental Market
The vacation rental ecosystem in the United Kingdom is crazy competitive and getting even more competitive every year. According to the Airbnb Annual Citizen Report, some regions have seen 80% year-on-year growth in the amount of listings going up. So how can a short – let manager get through to guests amidst all the noise?
INFINITE OPTIONS FOR GUESTS
Airbnb continues to grow at an exponential rate in the UK while the market still remains Booking.com’s international stronghold. In short, vacation rentals in the UK are everywhere.
With all of these options for guests it is hard for short – let managers to stand out and be successful in the super competitive market.
GROWING INTERNATIONAL HUB
The UK is also a growing travel hub. 8.4 million guests used Airbnb for accommodations in the UK last year alone. Despite this huge market for vacation rentals, the average host only made 3100 on Airbnb last year.
According to the latest Airbnb Citizen Report, the average UK host gets just under 10% occupancy. To compare, some property managers in other places of the world are unhappy when they are at 70% occupancy. It has never been more difficult for UK short-let managers to be profitable let alone grow.
CASE STUDY LONDON
London is the most competitive region in the UK by far. Accounting for one third of the UK’s total Airbnb listings, London has become extremely chaotic for any short-let manager to work through. In response to this there have been major regulations that have taken affect which limit how much a London vacation rental manager can do.
Despite these market characteristics, vacation rental hosts have not been deterred from opening their homes to guests on booking websites. Some boroughs are growing at an exponential rate. One borough has grown over 4000% in just 3 short years.
These factors have made the London vacation rental market extremely saturated. Airbnb hosts get 9% occupancy on average. This alarmingly low occupancy rate does not allow for much profit to be made by any host or short-let manager let alone make a living off of it.
BEING SUCCESSFUL IN AN ULTRA SATURATED MARKET
So how does a short-let manager get an edge on their competition and be successful in an ultra saturated market like the UK or London? You have to get creative.
With a combination of using intelligent business strategy, really understanding the market, and utilizing the latest technology to your advantage a short-let manager can succeed in the many saturated markets like the UK.
1 → DOING THE RIGHT MARKET RESEARCH
There are plenty of free resources that you can use to better understand your market. A couple good places to start are AirDNA, Airbnb’s Annual Citizen Report, and Inside Airbnb.
Airbnb’s Annual Citizen Report is a high level gauge of the activity that has gone on in your region over the past year. Airbnb is very transparent with their data compared to other booking websites which is a huge positive for all hosts on their platform. On the citizen report you will be able to find information on your regions growth, the occupancy rates, revenue being generated, and general Airbnb updates that affect your region. This is a good gauge on the general health and competitive level of the market you are in.
With AirDNA and Inside Airbnb you can start to get into more detail and really start to understand your market at an expert level. These databases list every listing in your area and give you the important metrics you need to make the right decisions on how to be successful in your competitive market.
The other booking websites like Booking.com are very secretive about their data and don’t share any of it publicly. This can cause problems for short-let managers when trying to make informed decisions on how to be successful on the booking website. A way to work around this obstacle is to take general statistics from Booking.com and make educated assumptions based off of them. For example: if you know Booking.com gets 2.7 times more traffic than Airbnb in the UK (which is public knowledge) and Airbnb has 223200 listings in the UK then you can assume Booking.com has 2.7 times that with over 400,000 listings in the UK.
2 → EXECUTING ON THE MARKET RESEARCH
Now that you have all this data on your market you can now start to make informed decisions based off of the data you collected. Rather than making decisions off a series of guesses and gut feelings you now have data to back up the decisions you make.
Market research findings will allow you to develop strategies that you know will work and resonate with guests in a way your competition is not. For example: If you find that in your region there is an uptick of travellers for work at a certain time of year it would be a good idea to make partnerships with the companies sending their employees. This is common practice for hotel chains which means it is a proven strategy in the travel industry. The Fairmont even rents out a whole floor to corporate partners.
Research findings can also inform you on what your competitors are doing in terms of listings details. Using this information can help you make your listings stand out among all the other competitors.
3 → GETTING THE RIGHT PRICE
There are plenty of tech tools at a short-let manager’s disposal that can provide a lot of value to any vacation rental business. Some of the most popular tools are pricing tools. These tools scan every local price around your listing to figure out the best price for your listing. These tools ensure that you are leaving no money on the table. Some good softwares for this are PriceLabs and RoomPriceGenie.
4 → SAVING TIME ON OPERATIONAL TASKS
Many property managers are now saving countless hours by using a property management software to automate portions of their vacation rental business. In order to stay at least on pace with the competition a property manager must be using a property management software.
A property management software has the ability to sync all of your listings to one calendar to manage all in one place. More powerful property management software automates the entire booking process including payment processing and fraud detection. You will never need to login to a booking website again, everything can be managed on the software.
5 → GETTING MORE BOOKINGS
Getting more bookings means that your listings need to be exposed to a larger audience than before. A great way to do that is by investing in a channel manager. A channel manager takes one listings and puts it on as many booking websites as you want all at the same time. This service exposes you to multiple booking website audiences to get more bookings all while syncing every booking website listing to one calendar.
This also allows you to not rely on just one channel of income for your properties. This is especially great for locations in cities such as London, UK where Airbnb sets a 90 day cap.
Getting a powerful software that is both a channel manager and property management software with advanced automation tools is mandatory in this ultra saturated market. Consider using BookingAutomation, industry standard vacation management software.
Automating the operational tasks mentioned and making intelligent and thoughtful business decisions is key in prospering in competitive vacation rental markets such as the United Kingdom.