Repeat guests

Unlocking Profit Potential: The Power of Direct Bookings, Higher Occupancy Rates, and Repeat Guests

Jim Sterling
Customer Success
September 4, 2023
2 min

Are you a vacation rental host looking to boost your property's profitability and long-term success? If so, it's time to harness the immense potential of more direct bookings, higher occupancy rates, and an ever-growing base of repeat guests. In this blog post, we'll dive into the reasons why these elements are essential for your vacation rental business and even provide some simple calculations to demonstrate the significant financial benefits over time.

Direct Bookings: The Revenue Game-Changer

Many hosts rely heavily on third-party booking platforms to fill their rental calendars. While these platforms offer visibility, they often come with hefty commissions, which can erode your profit margins. Consider this simple calculation:

Let's say your average nightly rate is $150, and you pay a 15% commission to the booking platform. For every direct booking you secure, you save $22.50 (15% of $150) in commissions. Multiply this by the number of direct bookings you achieve over a year, and you'll see significant savings that can go straight into your pocket.

Higher Occupancy Rates: Consistent Income Flow

Higher occupancy rates mean more nights booked and more income generated. When your property is occupied more often, you're maximizing its earning potential. Consider this example:

If your property has 30 available nights in a month, and you achieve a 70% occupancy rate, that's 21 nights booked. If your average nightly rate is $150, you're earning $3,150 in that month. But if you boost your occupancy rate to 90%, you're earning $4,050—a 29% increase in monthly revenue.

Repeat Guests: The Goldmine of Your Business

Repeat guests are like gold for vacation rental hosts. They require less marketing effort and are more likely to book again, resulting in consistent revenue. Let's see how the numbers add up:

Imagine you have 10 repeat guests per year, each staying for five nights, at your average nightly rate of $150. That's $7,500 in revenue from repeat guests alone. Over five years, that amounts to $37,500—money you wouldn't want to miss out on.

The Bottom Line: A Brighter Financial Future

Now, let's bring it all together. Suppose you implement strategies to increase your direct bookings, elevate your occupancy rate, and cultivate repeat guests. Over time, the financial benefits compound. Here's a simplified calculation:

  • Direct Booking Savings: $22.50 per direct booking x 50 direct bookings per year = $1,125 saved annually.
  • Increased Monthly Revenue: 29% monthly revenue increase x 12 months = $11,340 extra annual income.
  • Repeat Guest Revenue: $7,500 per year x 5 years = $37,500 in cumulative revenue.

Add these numbers up, and you'll see the significant difference these strategies can make in your vacation rental business. In this simplified scenario, your total extra income over five years could be over $50,000!

In conclusion, it's clear that more direct bookings, higher occupancy rates, and repeat guests are the keys to unlocking your vacation rental's profit potential. By taking steps to maximize these areas, you're not only increasing your immediate revenue but also securing a more stable and prosperous future for your vacation rental business. So, start implementing these strategies today and watch your profits soar in the years to come!

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Get More Repeat Bookings helps short term rental hosts build up a database of future guest e-mails and phones, as well as engage them with simple, effective marketing campaigns