How to Profit from Monthly and Short-term Vacation Rentals in a Recession?

Wall Street and top media sources are all pointing to a recession in the upcoming year. A recession concerns everyone, especially business owners, which is why they should be preparing ahead.

Monthly vacation inquiries are at an all-time high at the moment, but it could plunge very soon, given the chance of a recession during the first quarter of 2023. Business owners can’t do much to avoid the upcoming Recession, but you can save your vacation rental business from sinking.

How does the recession impact Vacation Rentals?

It’s an alarming situation for the financial world and could have devastating impacts on the vacation rental business. However, the short-term leisure business performs significantly well during this period. These businesses may have performed well during the 2008 Recession, but the upcoming Recession of 2023 may not be the same.

Smartphones, Airbnb, and several recent advancements were not around the last recession. Therefore, the business landscape in the hospitality industry could be different. It’s understandable if you are worried about the upcoming market changes, but you can still count them.

Profiting from Monthly and Shorty-Term Vacation Rentals during Recession: How to do it?

Properties located in a drivable destination are the ones that could be least affected by the upcoming Recession. However, vacation rentals in the saturated SRTs are at a higher risk. You could also face severe business loss because of a lack of attractions, poor walkability, and high living costs within the area. There’s no way to prevent all economic distress in a busienss, but you can minimize the risks by following these steps:

Taking Medium and Long-term Guests

Monthly and extended stays are the best option for running your vacation rentals throughout the Recession. Having long-staying guests ensures you don’t have to worry about a lack of guests, which could affect your cash flow during the year.

Vacation rentals that feel they cannot retain customers for long should consider offering a discount for customers. Striving for customer retention will keep your vacation rentals occupied for longer and can ensure better customer retention.

Diversify the Distribution

Vrbo and Airbnb are great service options but aren't the only place you can rely on. There are a ton of other travel and hosting agencies that can help your business. We also recommend investing in good quality property management software that syncs all your calendars.

This way, you'll cater to the needs of the guests better. Creating a website for your business is best so you can get vacation rental bookings without third-party vendors.

Focus on Expanding your Reach

Catering to a larger audience base is the key to long-term success in the hospitality industry. It's best to serve all customers, regardless of their profession or age. You should invite university students (if there's a university nearby), nurses, doctors, corporate executives, etc.

The more guests you cater to, the more your reach improves. Your business will continue to grow even during the Recession if you can cater to all sorts of guests.

Tweak Prices with Various Strategies

The vacation rental business owners have to cut their prices during a Recession or slow months. You can offer dedicated discounts for your guests.

Try to charge slightly more than others in the competition and see it that's something guests would like. You can adjust the perceived value and the prices of your vacation rentals to find the combination that suits you best.

Customers will pay higher for your services because of your brand's identity, which means that a company with a certain reputation makes more than others in the industry.

Reduce your Expenses

Surviving through the recession isn't about just increasing your cash flow. Instead, it's about smart financial management. Providing your guests with the best services in the industry matters, which means you can't compromise on your services.

For example, you don't have to give guests complementary wines, giveaways, and gift baskets. Instead, it would help if you focused on optimizing their stay experience in your hotel. Following are some of the most searched requirements from guests at Airbnb that might give you a clearer idea:

• Wi-fi
• Pet-friendly accommodations
• Comfortable work-station
• Quiet surroundings for the visitors

Start Streamlining your Operations

Efficient management of services is an inseparable part of any vacation rental service. You could have the finest accommodations, but they won't do much if you cannot provide customers with the right services. Therefore, we recommend you avoid outsourcing the tasks to third-party services.

For example, you could have third-party cleaning services at your vacation rentals. However, it's best to handle all these services yourself so you don't face any complications if the experts are unavailable. It also makes businesses easier to manage and control.

Utilize the Best Employees you have

Trusted employees are a major benefit for vacation rental services. The industry is hectic, and you will not handle all the tasks yourself. It would be best if you focused on utilizing your best talents. For instance, it can be a professional who's been a part of the hospitality industry for some time.

They know how to cater to guests and can assist you in managing guests. However, providing these employees with their due appreciation is just as crucial.

Bottom Line

Short-term and monthly vacation rentals are the perfect option for business owners during the Recession. You can ensure the business stays profitable even during the Recession by following the right tips.

If you still have more questions about the hospitality industry, feel free to 888-600-8119. Contact us today, and we will start working on the vacation rental upgrades.