Essential points to knowing and defining your target demographic to create a successful short term rental.
There are a million aspects to creating a small business, but probably the most critical to the success of any product, good or service is knowing to whom you are selling. It will not matter if you create the most beautiful space with the most incredible amenities if you don't know your audience. By identifying and understanding who your guests are, you can then create and market a space specifically targeted to this audience. How will you know how to stand out from the crowd if you do not understand your core demographic?
Here at The Social Home, our target demographic is you. We help investors turn their short term rentals into Tiny Boutique Hotels. As the sharing economy grows, we believe more and more travelers will opt for short term rentals to have not just a place to stay but an experience.
In today's blog post, we will explore the essential topics you will need to address - whether you are just exploring the idea of investing in a short term rental or already have a place up and running. Many of these are obvious, but sometimes it takes an outside eye to point out what is right in front of you. Using these pointers will help you hone in on precisely who you want to target. Don't sell yourself short by saying, "Anyone willing to pay." You may get a few takers but who wouldn’t want a higher occupancy rate? You are doing this to make money - are you not?
1. Location, Location, Location - Obviously:
The most fundamental component of determining your target demographic is merely to look at the location of your rental. How well do you know the neighborhood? What are the main attractions nearby? Is there a vibrant nightlife or is it a quieter neighborhood ideal for a retreat? There is no need to overcomplicate it but here are a couple of exercises that will give you an excellent high-level overview of your neighborhood.
· Google It: Bring up your location on Google Maps. Doing this will clearly show the
larger nearby attractions such as stadiums, large shopping complexes, and restaurants.
When guests are booking a location, convenience is a huge factor in selecting a
property. If you want to target visitors in town for spring training, it will be good to be
able to note how close the stadiums are.
· Yelp It: For a more in-depth look at what is near you, turn to Yelp. Google Maps only
show so much. You can get very specific using Yelp's search engine. If you are noting
the nightlife, what are the best bars close to your space? Will your guests be able to
start a pub crawl right out the front door?
· TripAdvisor It: Type "Best Attractions in Your Awesome City" in the search bar. The site
will give you both the larger attractions as well as, the lesser-known hidden gems. You
may find an opportunity to market to a niche clientele.
2. Size of Property:
The next item that will narrow your demographic field is the size of your property. If you have a studio with one full-size bed, you will not be targeting it to families. Similarly, if you have a four-bedroom luxury property on a waterfront - don't market it as a cozy couples retreat. Although it appears to be a straightforward task to take stock of your rental, do not forget to think about the hidden opportunities to add guests. Can your sofa pull out to sleep a couple? Is there an unused storage space that is big enough to be turned into a bedroom? Can you add a hideaway bed somewhere cleaver? Work smarter - not harder.
3. Know Your Competition:
You now know and understand the surroundings of your rental as well as how many heads in beds. Next, do you know who you are competition is? You may be aware of the major hotels near you but do you know how many other rentals that are just like yours that are around you? Yes, you can do a quick search of the site you list with along with a quick search of the major travel sites, but our favorite option for the more industrious investors is to turn to the pros at AllTheRooms.com.
"AllTheRooms aggregates and catalogs every room on the planet. What exactly does that mean? If there is a hammock in the Caribbean, a couch in New York City, a four-star hotel in Hong Kong, or a three-bedroom flat in London, you will find it on AllTheRooms. They are the world's largest accommodations search engine."
For a small fee, their Analytics team gives you a comprehensive report showing you exactly who your competition is. If you are in the early phases of researching where you would like your rental, their Market Analysis will clearly show neighborhoods that are already heavily saturated and those that are still growing. If you already have a location, the report can give you a better idea of how to differentiate yourself from those who surround you.
4. Average Daily Rate:
Pricing can be somewhat of a science. You don’t want to over-price your property and turn away guests, but you don’t want to underprice and leave money on the table either. In the beginning, it will be a game of trial and error. (Although, if you turn to the analytics team at AllTheRooms as noted above, their Market Analysis report will give you an excellent starting point.)
Now that you know who your competition is, whom are you trying to be? Are you an alternative to the lower budget-friendly hotels that cater to families? Alternatively, do you want to compete with the new boutique hotel that just opened? Where you set your price will help determine which end of the spectrum you are trying to fall within.
5. Amenities Offered:
Going hand in hand with your average daily rate is the type of luxuries that you include. Whomever your competition is, use their amenities as a starting point. Do what they are doing and then take it a step above. Do you offer small toiletries, a coffee machine with coffee pods, and high-speed WI-FI? (These are just the basics that every luxury rental must offer.) Next, try something a little unique. Are you next to hiking trails? Have trail mix and Kind bars. Next to the ocean? Have beach toys, chairs, and an umbrella. In the middle of the desert? Have small travel sunscreen bottles. All of which, look great as detail shots within your listing photos and can easily be branded.
6. Changing of Seasons:
The last point to consider is the changing of the seasons. Whom you target during the height of the summer may change drastically to whom you sell to in the off-season. Knowing the types of travelers year-round that visit will only better inform your marketing strategy and keep you fully booked throughout the year. Here are some tips to try:
· Ticketmaster.com: See what events are coming to your city and when. There may be
events that will never come up on your radar merely because they are not your style.
· Subscribe to "Your Awesome City's" local publication. Doing this will give you great
insight into what is happening in your city and when. Subscriptions are reasonably
priced and give you a wealth of insight on the local happenings.
Who is your ideal guest? Unlike major hotel chains, a short term rental can be very personal. When you tell someone about your rental, what is your elevator pitch? Do you say things like, "My home is located in Awesome City, it is close to Awesome Shopping Plaza, The Greatest Sports Venue and is a perfect space for either couples or a small family." If so, there are multiple demographics included within that phrase. Great Job! You are on the right track.