The Sydney short term rental market is booming! The demand for non-traditional holiday accommodation is increasing significantly along with the size of the revenues being realised by the savvy Sydney Homeowner and Investor alike.
The Airbnb age has made making money from your home by sharing it with the world more open to experiencing local life in real homes, not only accessible but also seemingly effortless to achieve. The rental returns being obtained during the peak spring and summer months are certainly highly attractive and yield far better returns than those achieved in the less buoyant long-term rental equivalent. However, whilst the heady heights of Summer are delivering in spades for homeowners and investors with relative ease, very little is being discussed in relation to what happens when the days get shorter, the guests get fewer and a chill wind blows in to take the heat out of Sydney’s STR market.
With the transition from Easter to winter, many STR properties face a sudden slump in demand and a ‘gap’ in revenue, not anticipated by property owners, becoming a worrying reality they have not prepared for. The reduction in the pool of guests means choice increases, price becomes more competitive and standing out from the crowd critical to differentiate your property from the rest. For a newcomer to the STR market, this can be unexpected and a huge disappointment unless you have done your homework about the industry’s ebbs and flows beforehand.
The fact is that the dwindling occupancy and yields often leaves the uninitiated second-guessing the sagacity of staying active in the STR market.
The good news is that there are many strategies you can adopt to pro-actively plan and prepare for the change of seasons. The strategies listed below should be used to assist you in overcoming the winter blues and ensuring optimal revenue for your property:
1. Get smart with pricing
Price competitively but price smart! Look into offering value deals that offer guests more for their money whilst still keeping your revenue and occupancy rates healthy. Including discount rates for longer stays drives a different type of value by minimising the costs of multiple guest changeover from both a time and money perspective.
Whilst offering low rates for low demand periods is a great way to drive occupancy, it is equally as important to identify points during the winter months where demand surges e.g. the school holidays or the upcoming Sydney Vivid festival. By identifying season high points in advance, you will be able to ‘price up’ where demand allows so your overall revenue mix improves significantly versus a flat pricing strategy.
Finally, adding value in to the price equation is always worth considering. Whilst it is all too easy to compare price on a like for like basis, the little added value items that you can include that will have a high perceived value to your guest but relatively inexpensive to you can give you the x factor. For example, adding a FREE Welcome basket with a bottle of red wine and chocolates, or hot chocolate with marshmallows for those cold winter evenings, along with breakfast items can make all the difference when guests decide where to stay.
2. Revamp your marketing
Spend some time considering how your property is unique and different from the other homes in your area. Each home has its own design and personality, yet rarely do people spend the time to share a little of what’s great about their home to encourage guests to pick them over another ‘less interesting’ listing. Promoting the key differences and personality of your home helps your future guests find more reasons to stay at your home as opposed to others. In the winter months, highlighting a cosy open fireplace or heated flooring can be just the enticement a guest needs to make that booking with your home.
Encourage previous Winter guests to ‘talk’ about their stay in your home and what they loved about it with reviews on your property profile and encourage them to share on social media platforms.
Present your listing differently, adjusting for the season and tailoring for the winter market. Consider a new listing description for your home that utilises more warmth in its description and highlights why your STR property is the perfect place to hang out during the chilly days. Re-invigorate your pictures by changing the order or simply adding in some local shots of Sydney taken in the Autumn/Winter season to be contemporary with the timeframe your guest is looking to book.
3. Know your guest
Offer the promise of a better local experience if they stay at your home. Make every potential guest feel like you know exactly what they are looking for and that your home is the perfect base from which they can enjoy the sights and sounds of Sydney. Whether you are targeting the Art and Culture lovers with references to the Vivid Festival, Christmas in July events or Fiddler on the Roof, or attempting to score the Sports fanatics looking for the best pad to kick off 2016’s State of Origin campaign, make sure your listing talks their language and jumps to the top of their search.
Whilst the winter season may bring with it a demand for a little more effort to realise the best returns for your property, the simple process of taking the time to consider the above points and prepare a proper strategy will certainly enable you to take the chill off of your winter finances. By being prepared, the season can be successfully navigated and set you up for a successful transition in to those hotter and unmistakable easier, lucrative summer months!
If you find that you may lack the time to appropriately allocate effort towards your property in the winter months consider a property management service that is trained in identifying the different needs and changes of the market year round.
If you are located in Sydney and require information or advice regarding hosting your home on the short term rental market, please contact our team at firstname.lastname@example.org
Nicky Bowie - Director of Marketing @ MadeComfy
MadeComfy provides an end-to-end property management service, which means property owners don’t need to do a thing when they hand over their keys. MadeComfy makes the process of earning greater returns from short-term renting effortless, achieving up to 40% more than long-term rentals and self-managed Airbnb listings. Get in touch with us today to see how we can help!