It’s that time of year when we take stock isn’t it? Look back on the past year and think about our highs and our lows.
Your holiday home is no exception.
It’s time to reflect on the amount of time, hard work and sometimes stress you’ve put into taking paying guests this year.
Was it worthwhile? Did you make a decent return?
If not, then perhaps you’ve been running your holiday home as an expensive hobby instead of a business?
Time to find out in my little end of year quiz (with some tips to running your holiday home as a business thrown in!)
1) For 2018 have you set income targets?
What income have you achieved this year and where do you want this to be this time next year. We all know that setting up and running a holiday home isn’t cheap (or easy). Once you’ve taken your expenses into account, was your 2017 net profit enough? If not, then how can you earn more in 2018? Reduce your running costs? Get more bookings? Or focus on attracting consistent high value bookings (this strategy is the one I recommend). Having a realistic yet challenging income target for the year ahead and putting a plan in place to achieve this, is running your holiday home as a business.
2) Are your prices aligned to your income target?
Set an income target then work out how many bookings per month/per year you need to meet this target. If it’s 5 weekly bookings a month, then clearly this isn’t possible; you either change your income target or change your prices. Don’t feel that once prices are set, you have to stick with them. Feel free to increase your prices if your gut feel is that it’s the right thing to do. As long as you’re offering value to your guests, as a result of increased prices. Having a clear pricing structure that earns you the income you need and offers guests value for money is running your holiday home as a business.
3) Do you know who you are marketing to?
Are you marketing to anyone? Anyone who will book with you? This strategy isn’t a smart business move. You need to work out exactly who you are targeting eg families with pre-school children, retired couples, young couples. And what exactly are they looking for in a holiday home that you can provide? What problems do they have that a stay with you will resolve. Your targeting will also be based on the area you’re in and the local attractions. Once you define this, you can ensure your website and your marketing messages are talking directly to these guests.
4) Do you see yourself as a business owner (as opposed to someone who owns a holiday cottage)?
There’s a big difference. A business owner is more objective and makes decisions that are right for the business even though they sometimes can be unpopular and mis-aligned with personal decisions. For example letting friends stay for a significantly reduced rate, because you felt too awkward turning them down. A business owner always has an eye on the profit and each day-to-day decision is made on the basis of is it right for the business.
5) Do you embrace new technology and aren’t frightened of learning new stuff?
Everyday a new social media platform seems to be launched. But you don’t have to learn each new fad. Be selective and choose one or two social media platforms and get to know them well. Regularly sending out e-newsletters and offering free downloads to capture email addresses means learning new technology. But if this is what your business needs then this is what you must embrace – even if it scares you! Be brave and embrace it!
6) Are you prepared to shout about your holiday home?
Whispering about it isn’t enough. You need to shout about your holiday home online but also offline, in your day to day life. You have to be a living, breathing advert for your holiday home and its area. I don’t mean take a “ram it down their throat” approach but I mean when appropriate and at every relevant opportunity, say handing out business cards or flyers about your place. It’s about all your friends and family knowing about your holiday home, who in turn then recommend you to others. It’s about letting your passion for your holiday home and its area shine through. Don’t be shy about sharing this as widely and as often as possible.
7) Do you have systems for logging, tracking, recording and analysing your data?
You’re making it much harder for yourself if you don’t have systems in place. This isn’t just for tracking your income and expenses but also for managing guest enquiries, bookings, occupancy rates, special offers. How many enquires turned into bookings? Also, for example where are your guests coming from, how many miles/hours do they travel to stay with you? Useful information for future marketing. The more data you have the easier it is for you to manage your business day to day, to improve on your stats, as you know your starting point and make business decisions using this data.
8) Do you have your own website and one that you’re proud of?
If you don’t have your own website, you need one. Your website is at the centre of your marketing hub. It needs to work for you and you need to be so proud of it, you just can wait to drive potential holiday makers there to take a look. If it’s outdated, hard for visitors to navigate with small photographs and no online booking system, then it’s time for a change. You’re wasting your time getting visitors to go there in the first place. All holiday rental businesses need a modern, efficient, easy to update website and it doesn’t need cost a lot (eg a WordPress website).
9) Are you a people-person?
Being a holiday home business owner is about working with people and building relationships with them online, over the phone, by email and in person. These people are your guests, future guests, suppliers and sometimes staff (eg cleaners). You have to enjoy this interaction (even with the more demanding and trickier guests). You have to care about your guests and want to give them the best holiday experience you can, rather than seeing them just as a walking purse!
10) Are you marketing your holiday home yourself?
This is when your profit per booking is maximised as you have no agency commission or listing site fee to pay. If you’re using big listing sites now, have plans in place across 2018 to reduce your reliance on them by taking control of your own marketing. Moving to listing site independence means implement proven marketing strategies such as search engine optimising each page of your website, regularly blogging to help you get found, send monthly e-newlsetters to keep in touch with past guests and consistently and persistently posting to social media and growing your online presence.
If you’ve answered “yes” to all or most of these questions, then congratulations, you’re running your holiday home as a business. Keep doing what you’re doing!
If you’ve answered “no” then look back at each question. This highlights the area of your holiday rental business you need to focus on and change in 2018, so this expensive hobby of yours starts earning you some decent money!
Is it time to get serious about your holiday rental? If so download a copy of my Holiday Rental Profit Pack and boss your numbers!