No two years are the same in the holiday letting business. Some years you will find people plan their holidays over a year in advance and you fill your peak weeks before you have even had a chance to set next years’ rates. During others you might find yourself heading towards Spring with just a handful of peak weeks booked, worrying about where the bookings will come from. Sometimes a flurry of last minute bookings fill up those awkward gaps in the diary, whilst at other times they just don’t fill at all. It is easy to ride the wave in the good years and enjoy bumper bookings without too much effort. However, before you become too complacent, it is worth remembering that you will also need to be prepared to weather the storm during those months and years when it seems that no one wants to book a holiday.
This article looks at the current booking trends in the UK holiday rental market and what you need to do to ensure your holiday home remains attractive and competitive during tougher times.
Current booking trends in the UK holiday rental market
2016 and 2017 were good years for the UK holiday letting market. According to the 2018 ABTA Holiday Habits Report, the number of UK holidays peaked in 2017 with people taking an average of 2.1 holidays a year in the UK. Whilst this figure has dipped slightly, staycations are still popular in the UK. They tend to be cheaper, more flexible, and more family and pet friendly than travelling overseas. However, despite this, 2019 was a tough year for many holiday home owners.
Whilst there are still plenty of people looking for UK holidays, the UK rental market has never been so competitive. The choice of holiday houses on the market now is vast. As well as your traditional holiday cottages you will find large manor houses, renaissance B&Bs, quirky seaside shacks, luxury city pads, glamping pods and people renting out their spare rooms at extremely competitive prices to holiday makers on OTAs (Online Travel Agents) such as AirBnB.
The last few years have also become exceptionally ‘last minute’, with many bookings being made just weeks if not days before arrival. Guests are tending to book time off work, but waiting until last minute to decide whether to stay in the UK or go abroad for their holiday.
Short breaks are also becoming increasingly popular. More and more guests are wanting to arrive on any day of the week with only a couple of nights to enjoy some time away. Whilst short breaks can be very lucrative when you achieve back to back bookings, they certainly keep us owners on our toes. We need to work harder than ever to handle the additional enquiries, bookings and extra changeovers.
It is unlikely that the last minute nature of the holiday letting business and the popularity of short breaks in the UK is going to change in the near future. As holiday home owners we need to embrace these current market trends and capitalise on the booking opportunities available.
How to be successful in such a competitive rental market
The success of a holiday rental property will certainly be influenced by factors such as location, property desirability and facilities offered. However, success can also be attributed to hard work, strategic marketing, and the flexibility to adapt to the desires of the current rental market. Here are some tips to help you get bookings in today’s competitive market.
The more flexible you can be, the more likely you are to secure bookings. Consider taking short breaks all year round and offer flexible changeover days. If you are in a highly desirable holiday location you may decide to restrict the summer school holiday period to week long rentals, but consider short breaks outside of this period. You can find out more about how to set yourself up to accept short impromptu breaks here.
You also need to be able to accept last minute bookings. Today’s market is becoming increasingly last-minute – a trend that is set to continue. Make sure you clean your holiday home when guests leave, rather than before they arrive. That way you are always in a position to take a last-minute booking, even if it is literally an hour or two before arrival! The last minute markets tends to be more relevant for smaller properties as it is harder to get a large group of people organised in a short space of time.
In a market so competitive, whether you are offering luxury or affordable accommodation, value for money is paramount. There is plenty of demand at both ends of the market, but little or no demand for over-priced accommodation. Even though running costs are ever increasing, value for money is key in today’s market and rates need to be competitive to gain a good level of bookings. Find out what other holiday houses in the area are offering and charging, and ensure your holiday home is every bit as appealing. If not more so! You many also want to ask others (who will give you an honest, unbiased opinion!) how your property compares to your competitors in terms of how it is presented, desirability and price.
The advantage of letting your property independently is that you have the flexibility to increase or reduce your rates at any time according to demand. This ensures you stay competitive whilst having the flexibility to charge more for popular weeks.
Watch out for commission and booking fees overly inflating your rates
The larger OTAs charge holiday home owners a hefty commission, and some also charge guests a ‘service fee’. Whilst the concept of only paying for bookings gained may be appealing, this ‘commission only model’ means that you will either need to reduce your rates to keep them competitively pitched, or sell rental weeks at overly-inflated prices, therefore jeopardising customer satisfaction. For example, we looked at a one bedroom cottage (sleeping two) advertised on a large commission-based listing site. The owner for this particular cottage sold a peak week on Independent Cottages at £595. In order to cover some of the commission charges they advertised it on the larger commission-based listing site at £630. By the time a £72 ‘service fee’ was added by the listing site, the total cost for the week went up from £595 to £702.
“That’s £107 more for the very same week and (in our opinion) a much greater guest expectation to manage in terms of value for money and guest satisfaction.”
The advantage of advertising independently is the price you charge is the price that they pay.
Attract early bookings with a discount
Consider promoting an ‘early bird’ discount to encourage people to book in advance. Whilst it is also important to be able to handle bookings at short notice, there is a comfort element in knowing you already have a few weeks booked. Success also breeds success and when your calendar is showing a good level of bookings, your property often becomes more desirable which in itself can result in more enquiries. A few bookings in the diary might also give you the confidence to increase your prices slightly and claw back any initial money lost by offering early bird discounts!
Post last-minute deals
As more and more people are booking their holiday last minute make sure you clearly advertise any last minute offers you have. For owners using Independent Cottages, we have the facility to post last-minute deals up to eight weeks in advance at no extra charge. It’s a great way of getting additional exposure for your property and promoting discounted breaks when you have a gap in your calendar.
According to ABTA, four out of five people now book their holiday online. This trend is only likely to increase. It is therefore essential to make this process as easy as possible for potential guests and to ‘catch’ them whilst they are in the holiday booking frame of mind. If people can’t easily find the answers they are looking for they will move onto one of the many other holidays houses in the same area.
Make sure you display all prices on your adverts. If you have special discounts and offers running make sure you shout about them! When we surveyed holiday makers, we were surprised to find that almost 70% said they wouldn’t even bother enquiring if rates were not displayed. A very similar percentage also said the same about the importance of up-to-date availability. People are used to buying online and want to know whether something is available and what it costs, so don’t fall at one of the first hurdles. Make sure your advert is always kept up to date with prices, offers and availability.
Take credit card payments. Not only does this make the booking process quick and simple for guests, but it is also the most secure way to process a payment. Any purchase made between £100 and £30,000 may be protected by the holiday makers credit card provider under Section 75 of the Consumer Credit Act or via chargeback or the issuing credit card companies own fraud protection scheme. Given the recent documentation of fraud in the holiday rental industry, and the increase in last minute bookings where owners require the full payment upfront, many guests prefer the security of paying by credit card rather than making a bank transfer or paying via Paypal. You might also get bookings from people who want to get away at short notice but don’t want to pay until they next get paid. You can find more information on the most common online payment methods used by holiday home owners here.
At Independent Cottages, 53% of holiday makers send two or more enquiries. On the whole, the first person to respond is most likely to get the booking. It is therefore essential to get back to enquiries as soon as possible (holiday makers often chase after 4 hours so responding 12-15 hours later may well be too late!). Make sure you regularly check your spam folder as enquiries from people who aren’t in your address book have a nasty habit of ending up here.
Shout about your facilities
Take the time to review your advert and make sure any new facilities are included. It’s always nice to hold back the odd little surprise for when guests arrive, but don’t undersell your property. Make sure that potential bookers know what is included in the price, such as bed linen, WiFi, heating, a hot tub etc. Everyone wants value for money!
Photos are possibly the single most important influencing factor when someone is choosing a holiday cottage so make sure you have your very best ones on display. Ensure there is a good mix of photos with appeal for all seasons. You can find lots of good photo tips here.
Chuck out the chintz!
Gone are the days of ‘cast-off cottages’ with a humble chintzy welcome. Guests today tend to be looking for a ‘home from home’, with a few extra mod-cons and a little bit of luxury. A sizeable percentage of the current UK holiday rental market falls into the 20’s and 30’s age group. Whilst many of them appreciate ‘historic’ charm, this often starts and ends with the bricks and mortar! Whilst most people will love a pretty thatched cottage, or the honey coloured age old stone of a Cotswolds property, a ‘chintzy’ dated decor is rarely appealing.
With so many stylish rentals in the market place to choose from, make sure yours stands out, but for all the right reasons! Let the wonderful period features speak for themselves. Then compliment them with a fairly neutral, well-coordinated décor that has wide appeal. The wider the audience your holiday home appeals to, the more bookings you are likely to gain. If you’re not offering what guests want then there is bound to be a competitor on your doorstep who is. If you are unable to keep your cottage up to date you will need to be prepared to reduce your rates to offer value for money to increase desirability.
Widen your marketing
Many holiday cottage owners prefer to rent out their properties independently. It is considerably cheaper, gives us greater flexibility, and we are not tied to the rules and regulations of large companies. However, agencies charge fees for a very good reason. Successful marketing takes a lot of time and effort in order to gain a high level of occupancy all year round.
This is not the climate to be cutting back on marketing. We recommend that owners advertise on a number of reputable websites in order to gain a good level of exposure and bookings. Consider investing in additional advertising, and if you don’t already use social media as part of your marketing strategy now is the time to start engaging with platforms such as Twitter, Facebook, Instagram or Pinterest. Whilst this might be time consuming, engaging with social media platforms is becoming an increasingly important marketing tool for holiday home owners.
Independent Cottages charge around £125 a year to advertise. A couple of bookings over a 12-month period will more than cover the advertising fees compared to paying the commission and service fees charged by most OTAs. That said, we aim to get owners considerably more bookings and have many happy owners who use our website as their primary advertising source to fill up their calendar.
Appeal to different markets
If you are struggling for bookings, think about who your property might particularly appeal to, and what you can do to help attract them. For example, you could offer an ‘under-occupancy’ discount for couples and a few extra romantic touches to entice them. Hot tubs are becoming an increasingly popular addition to holiday homes aiming to create a little bit of luxury for their guests. If you have a lockable space to store bikes or kayaks you could market your property to cyclists and water sports enthusiasts. Families make up a large percentage of holiday makers in the UK. Ensure your holiday home stands out from the crowd by providing equipment such as cots, high chairs and stair gates, as well as a few extra toys and games for the kids and a couple of treats for the parents.
One of the attractions of holidaying in the UK is that your four legged friends can come too. If your property and its surroundings are suitable for pets you should consider accepting dogs. Whilst they do come with added risks and responsibilities, accepting dogs can considerably boost your bookings. If you do decide to take them, don’t just ‘allow them’, go out of your way to ‘welcome’ them with added extras such as dog towels, bowls, throws and maybe even a welcome Bonio or two. When pet owners find a holiday home that both they and their beloved four legged friends can relax in, they are highly likely to return.
Use local events, festivals and attractions to pull in the punters
Do your research and find out the dates for popular events such as festivals, county fairs, Christmas markets or sporting events in your area. You can use these as a hook for social media posts, or include them in your adverts. Build relationships and work together with event coordinators and local attractions to help promote each other.
Let previous guests help to sell your property
With more and more guests booking their holidays online, reviews are becoming increasingly important. Find out more about how to encourage guests to leave reviews here. People also love to read guest book comments. You can include photos of guest book comments on your Independent Cottages advert, as well as on social media platforms and your own website. It’s a good opportunity to show off any comments you are proud of. Make sure you protect personal data and remove all identifiable information such as names and addresses from the photos.
Survival of the fittest
2019 was a tough year for many in the holiday letting industry. Holiday makers have a vast choice of holiday homes to choose from and they are increasingly looking for last minute deals and short flexible breaks. If your holiday home is overpriced, only available for week long holidays and full of Granny’s cast offs it is likely that you will struggle to get bookings in the current market.
However, it is not all doom and gloom. Like every industry, the holiday rental market is ever changing. With this comes new owners, new ideas and new opportunities. Huge numbers of holiday makers are searching for holidays in the UK. Our job is to ensure they are booking your holiday home. If you can remain competitive and flexible there is no reason why you can’t stay one step ahead of the game.