Vacation rental booking window refers to the time between the day when a booking is made and the check-in day. It tells you how far in advance your guests typically book your property and it’s crucial to consider when adjusting pricing in order to maximise occupancy and revenue.
The data intelligence company Transparent has just released a report on vacation rental booking window, how it has changed over time and what are some of the factors that influence it. We decided to check this data closely and analyse how it can impact your revenue.
According to Transparent’s data, travellers are increasingly booking more last minute and less in advance. This graph shows that the median number of days a reservation was made before the check-in date has significantly decreased since 2015. Four years ago, guests would book their stays 79 days in advance. By 2018, the average was only 39 days.
The size of your vacation rental can also have an impact on your booking window. As you can see in the following graph showing data from 2015-2018, rentals with a higher number of bedrooms are booked more in advance. One-bedroom rentals are booked 41 days in advance on average, while rentals with 6 rooms are usually secured by guests as early as 83 days before the check-in date.
Thirdly, whether your rental is in an urban or a leisure destination also counts. Travellers tend to book leisure stays 3-4 times more in advance than city stays, as demonstrated by this graph comparing the two types of destinations in Spain and the United States.
Figuring out your booking window is not as difficult as it sounds. If you’ve been in business for a while, you’ll most likely have an idea of how far in advance travellers book your rental. You’ll also know that your booking window is not fixed: it can vary depending on your low and high seasons.
Use your historical data (exported from your vacation rental software) on how far in advance travellers book your rental to determine your booking window. Keep this data organised and accessible to you at all times. It will tell you when your peak demand – the period when most reservations are made – is, and you can use it to adjust your pricing in a professional way.
When it comes to revenue management, timing is key.
Once you’ve determined your booking window, you can start using smart strategies to adjust your rates.
If you understand your booking window, you can choose to bump up your rates before it opens. With this strategy, you’re giving yourself the chance of locking in a high-value early-bird booking – for example, a family travelling from far away, involving a flight, and booking a longer stay. Should this strategy fail and you don’t get a booking at the price you set, you can still lower your rates during peak demand.
Setting prices a bit higher before your booking window opens can work, but don’t go overboard. Ask yourself: are my rates within a realistic range? Do not set unrealistically high rates over 31 days prior to check-in, even if you have above average occupancy on the books. Instead, promote length of stay pricing – provide discounts for longer stays – and use refundable and non-refundable rates smartly.
As a vacation rental owner, you should always keep a close eye on your competition. But if there was ever a time to be extra vigilant, this is it.
Have a look at what your competition is doing during your peak time and adjust your rate accordingly, so you can get a booking at a competitive price. This way, you’ll avoid having to lower your rates to ensure occupancy with a last-minute booking when your peak demand dates have passed.
Remember, leisure travellers tend to shop at the best rate. If your prices are too high compared to your competition, there’s a good chance you’ll miss out on bookings.
You can monitor your competition manually or get insightful market data from data intelligence providers such as Transparent.
If you want to guarantee that your vacation rental will be occupied but your peak demand period had passed, reducing your prices is in order.
However, dropping your prices drastically on the final day is not recommended. It sends a bad message to prospective guests and can have a negative effect on your profit in the long run. Keep this in mind before you cut your prices in half in a moment of desperation!
Analysing the data that you have on your guests – such as when they book your rental – is crucial to running a successful vacation rental business. For example, knowing your booking window can help you get to know your guests and improve your services so you can attract others who book just like them.
Try to find patterns in the way that your guests book your rental and use that information to improve your services.
Do your guests tend to book last-minute? Be prepared to receive bookings on short notice by optimising your maintenance, cleaning and check-in processes.
Do they book longer stays in advance? Offer discounts based on length of stay.
The knowledge you have about your booking window can be used not just to better control your revenue, but to offer an even better guest experience.
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