Want a successful vacation rental business?
You’re going to need to secure a high ranking for your property on at least one major listing site.
A high rank means your property will appear on the first page of the results when potential guests search for properties in your area on listing sites like VRBO or Airbnb.
A prominent position means your rental will be viewed more, booked more, and earn more income.
And here’s some good news for those of you who are just launching your vacation rental business: there are proven strategies for securing a high spot in the rankings right out of the gate.
The New Listing Grace Period
Listing sites give new properties a grace period to prove their worth in the market.
This is because the search algorithm that determines each property’s ranking is predominantly guided by how frequently a property is booked compared to how frequently it is viewed.
Obviously, a brand-new property has no history of bookings – so it would be impossible to determine how well it’s performing at the very beginning of its time on the listing site.
To counteract this problem, listing sites give new listings a grace period to prove their worth. New listings are given a place among better-established properties for a short period of time to see how they perform when compared to the best properties.
If a new listing performs well, it keeps its place at the top of the rankings. If it does poorly, it gets dropped down the list.
The grace period varies by listing site and by area, but it’s safe to assume your first 4-8 weeks on a listing site are going to be essential for determining your property’s placement.
After your property has been viewed a certain number of times, the listing site calculates how many bookings you’ve made over that period and determines your conversion rate to date.
Which means it’s essential for your just-listed property to have a high rate of conversion.
First of all, what do we mean when we say a property “converts”?
Conversion is simply the number of times a property was booked divided by the number of times it was viewed. For example, a property viewed 1,000 times and booked 5 times has a conversion rate of 0.5%.
Conversion can also be calculated based on many other factors, such as how many times a traveler inquired about your property’s availability divided by the number of actual bookings – but views over bookings is likely to be one of the most important determiners of your listing site ranking.
You can see the number of times people view your property on the listing itself (the major listing sites all include view trackers on owners’ personal dashboards).
A good conversion ratio depends on a lot of factors, including your area and whether you’re currently in high season, but in general you’re hoping to see one booking about every 400 page views.
It might take half your grace period before you get that many views and discover you’re not converting as well as you’d like.
Rather than waste your new-listing advantage, let’s make sure it’s going to convert before it goes live.
How to Create a Listing That Converts
There are some known factors that make it much more likely that your property will convince one of its next hundred viewers to break out their credit card.
For example, a property listing with plenty of high-quality photos is more likely to convert. A listing with a high response rate is more likely to convert. A listing with online booking is more likely to convert.
A property with an attractive price? Is exceedingly likely to convert.
We’ll come back to pricing in a moment, because it’s one of the most important things you can do to ensure your vacation rental stays at the top of the rankings for years to come.
First, let’s make sure your listing is presenting the kind of property guests love to book.
We’ve outlined some of the major factors that make your property more bookable in this post, but here’s what you should have before you create your listing to ensure it starts off on the right foot:
- Do you have 24 professionally-taken photos of your property?
- Are each of the rooms of the property displayed clearly in the photos?
- Are you prepared to answer the email and phone inquiries for the property right away?
- Have you written a clear, compelling description of your property?
- Do you have a headline for your listing that includes the location and most compelling amenities (i.e., hot tub, AC, WiFi)?
A surprising number of owners power through with listing creation before they’re ready to present a professional-looking listing. Their property might only have a handful of photos, a few lines of description, and a poor response rate for the entirety of their grace period.
Their brand-new listing may appear higher in the search results for a brief time, but no matter how many people view the property, it’s unlikely to get many bookings, which means it will have a poor conversion rate. After its grace period, it will be moved down the rankings.
Don’t let that happen to you.
Present a great-looking listing, and you’re poised to make plenty of bookings in your first few weeks on a major listing site.
Assuming, of course, your rates are where they need to be.
Why You Should Always Start With Lower Rates
Owners tend to want to start out with high rates when they first put up their listing.
It makes sense: you want to start making a profit as soon as possible, and putting in the highest rate you think you could get for your property seems like the most efficient way to go about it.
The problem is that guests don’t know if your property is worth booking yet.
You have nice photos. Your description sounds great. You have all the amenities they want. But you don’t have any reviews, so they don’t know for sure if it’s as good as it sounds.
Maybe it would be safer to book with your competitor, who charges the same rate for a similar property, and already has lots of reviews that show it’s worth the price.
Change your rates, and you’ll change their mental equation.
Before, they were debating a property with reviews against one without reviews.
Now they’re comparing an expensive property with great reviews to a bargain-priced property with no reviews.
Starting with lower rates levels the playing field. Some travelers will choose to pay more for a sure thing. But plenty will choose to take a chance on an unproven property because of its excellent nightly rate.
And those first few bookings will guarantee an excellent initial conversion rate.
Don’t Miss Your Window
Your first few weeks, as we’ve said, are critical. You have a brief window of time to prove your property’s value to listing sites like HomeAway or TripAdvisor – and once it’s gone, it’s gone.
Which means you want to make your first 3-5 bookings as quickly as possible.
Make bookings in that window, and you’re set: your listing will continue to appear at the top of the rankings, putting it in front of hundreds of thousands of viewers.
Fail to make bookings in that critical window, and you’ll find yourself relegated to the bottom of the search results – where it’s very hard to make bookings at all.
This is why we always recommend starting a new listing with lower-than-average rates.
Those rates guarantee your first few bookings and tell the listing site that your property is valuable enough to stay on the first page of results.
That front page ranking is worth tens of thousands of dollars to your business over time, which means your discounted rates will pay for themselves a hundred times over during the next year.
When to Raise Your Rates
Your rates won’t stay low for long. That’s due in no small part to the huge bonus that comes with discounted bookings: 5-star guest reviews are practically guaranteed.
After all, the value they received was far more than the money they paid to book. They’re going to be blown away by the amazing property they booked for such a great price, and their review is very likely to be a rave.
Once your first few discounted-price bookings have left you glowing five-star reviews, guess what happens to your property?
You’re now one of the tried-and-tested. You have great reviews, a great listing, and a conversion rate that guarantees you a prime spot in the rankings.
Your property now has absolutely everything going for it.
Which means it’s time to raise your rates to the level you initially wanted.
Invest in Your Lifelong Success
I want to close with a tale of two properties.
The properties are identical. They are both brand-new listings in the same area, and similar, more established properties on Airbnb and VRBO are priced at $400/night.
The first owner wants to charge $400 a night, despite our explanation of how important his grace period is to his business overall.
The second owner is willing to charge a discounted rate – $250 – until she gets a few initial bookings and reviews.
Here’s what happens.
The more expensive property gets one booking in its first two months. It has no reviews, and guests prefer to book with its competitors. It books one weekend when competing properties are already booked up, and the owner pockets $1,200 for that three-night stay.
The discounted property gets 5 bookings in its first two months. It also has no reviews, but at that price, who could say no? It books three weekends and two week-long stays, and its owner happily takes home a total of $5,750.
$1,200 vs. $5,750 – it’s easy to see who the winner is here.
But the story doesn’t end when the grace period ends.
The first owner got a single four-star review on their weekend booking. As a brand-new owner, he made a few little mistakes that made the guest feel the property only deserved 4 stars. After all, the guest paid a good price for that property, and they figure everything should be perfect.
With only one conversion, the property is relegated to page 10 of the results. The owner is now having an even harder time making bookings, especially with an “average” 4-star review.
His only option? Acknowledge he made a mistake in his pricing and drop his rates – hoping he can squeak out a few bookings even from his low position in the rankings.
Meanwhile, the second owner now has a couple of 5-star reviews thanks to her enthusiastic first renters – who can’t believe what an amazing property they got for the price and are more than willing to overlook any small mistakes made by their first-time owner.
With five conversions, her property appears on page one of the search results, and its multiple 5-star reviews mean that she can now raise her rates to $400 a night.
The property is proving so popular that she figures she should be able to raise her rates even higher by the end of the year.
The moral of the story?
Charge less for the first few weeks, and guarantee the success of your property for a lifetime.
The winning formula for a high listing site ranking and a successful start to your vacation rental business: time and effort put into creating a great listing from the start + low prices for the first 4-8 weeks = success.
When that formula returns three five-star reviews, raise your rates: your success is locked in for good.
How did we come up with the surefire formula to guarantee a new listing’s success? We honed our strategy on over 4,000 properties across North America until we found an approach that got results every time. Improved rental income is just the start of how we make vacation rental easier for owners, though – click here to learn more.