The lesser-sung hero of the short-term rental revenue equation; occupancy, is arguably the biggest challenge for property managers. So the question is, once you’ve converted lookers into bookers, why would you not want them to return? Guests who have previously enjoyed a happy stay in your portfolio are a known and warm audience. What’s more, repeat guests in short-term rentals bring other benefits – they’re cheaper to market to, cheaper to book and they expose you to less risk. In short, repeat bookings bring higher margins and ‘safer’ occupancy. Here’s the why and how, in data.
Repeat guests in short-term rentals in Kissimmee & Nice
We’ve taken 2 global markets in Kissimmee and Nice, and analysed samples of their market supply, their repeat guest percentages since 2019 and their occupancies.
Kissimmee, Florida, is the largest vacation rental market in the US, whose occupancy has averaged 66% so far in 2022. As of Q2 this year, it was home to 43,000 STR listings.
We took a sample of professionally managed listings in the city and analysed what proportion had welcomed a returning guest since 2019. The result was 19%, indicating that 81% of professionally managed listings in Kissimmee have not attracted a repeat booking.
In Nice, France meanwhile, the same analysis showed that 25% of professional inventory had a repeat booking. Whilst an improvement on Kissimmee, it still leaves three quarters of professional listings without a repeat booking since 2019.
Occupancy data for listings with returning guests in Kissimmee & Nice
Next, we consider the average occupancies over the same timeframe (2019-2022). In the adjacent chart, in pink, you can see occupancy for the professional market share with no repeat bookings.
For Nice this represents around 75% of professional inventory, where average occupancy was 59%. In Kissimmee meanwhile, as a less seasonal market the average occupancy for the no repeat bookings cohort (81% of pro listings) was 64%.
Now, when we turn to those listings that have welcomed repeat guests at least once over the past 3 years we see an increase in occupancies.
In Nice, the remaining 25% of listings saw 65% occupancy. This equates to 10% more occupancy for those listings who engaged with repeat bookings. Similaryl, Kissimee sees a 9% jump for repeat booking listings (70% occupancy on average).
Ultimately, it seems that those professionals attracting repeat guests are achieving higher occupancy by around 10%.
Why do you want repeat guests in short-term rentals?
The first, and most compelling motivation for attracting repeat bookings is the boost to your occupancy. As a professional property manager, average daily rate (ADR) and occupancy are your bread and butter. With occupancy pushing half of the revenue equation, there are few things more enticing.
However, there are other benefits to repeat bookings. Of course, when you secure a booking via an OTA, you are paying fees that platform, which effectively represent their commission for marketing you listing and administering a reservation. When you secure repeat guests you can do so directly, saving you this fee and increasing your margin.
Beyond that, encouraging loyalty initially increases the possibility they will come back again and again of their own accord. This builds your direct brand, reviews and increases the likelihood of word-of-mouth bookings also.
Finally there’s the reduction of risk. A successful booking represents a known-quantity guest. Chances are, if a guest has stayed with no issues previously, they are less likely to cause you issues and cost you money in a future stay. It’s hard to put a price tag on the reassurance of reducing risk to your stock.
% of repeat trips to global markets
So we know why repeat bookings are advantageous, but how significant is this opportunity? The below chart shows the percentage of bookings in each global market where a guest is returning to that same market.
Conclusively, the degree of repeat guests that markets experience varies greatly depending on many factors including market type and geography. Hawaii for example offers an overseas but domestic and accessible tropical getaway for a captive American audience. London also enjoys a high return rate as an international business hub. Another standout is Las Vegas, which offers a unique tourist experience.
However, considering again Nice and Kissimmee, at 14% and 12% return trips respectively, it is clear that there are plenty of returning guests to attract back to your vacation rental.
Still, according to the above, on average, only 1% of a professional Kissimmee listing’s bookings is repeat, and just under 2% for one located in Nice. So, how should professional property managers begin to attract those returning to their market, for safer, more lucrative reservations?
How to win repeat guests in short-term rentals
The challenge of attracting a guest back for a repeat trip begins the moment they make their first booking with you. Fundamentally, it’s all about being memorable – in a positive way.
Make their confirmation, arrival and check in process as frictionless and friendly as possible, and why not add a welcome treat? These things all pay into a positive experience of staying with you, which you are hopefully working hard at already, in an effort to secure all important positive reviews.
Be sure to respond to any issues promptly, and after check out send them a thank you of some form. Subsequently, and especially if the stay went smoothly, you should be reminding the guest to review – why not throw in an offer to rebook for next season? This could be equivalent or even less than the amount you stand to save in booking fees. You can extend that offer again over the following months if you save your guests’ contact details and set up a campaign. Why not have a periodic outreach featuring your properties or the area in addition to your offer in order to entice them?
It’s also important to link them to an easy direct booking process to get them over the finish line. If your market is particularly ripe for repeat business and your brand strengthens, you could even think about a loyalty scheme. There are many tips and tricks, but the main thing is giving your guests such a positive experience that they will remember you if they, or their friends, visit in the future.