Unlocking Profit in Short-Term Rentals: Mastering the Art of Targeting

Get more Airbnb bookings, unlock profit at your short-term rental through more effective marketing applying traditional marketing and honing in

When it comes to the success of short-term rental properties, understanding and applying traditional marketing principles—specifically the hierarchy of target audience, market, submarket, and niche—is not just beneficial; it's essential. For property owners and managers, grasping these concepts can transform a basic listing into a sought-after retreat, significantly enhancing both occupancy rates and profitability. Let’s explore how these marketing layers can effectively be applied to the short-term rental industry.

Understanding Your Target Audience

The first step in any effective marketing strategy is to define your target audience. For a short-term rental, this is typically determined by occupancy and the general purpose for the stay, such as a mountain getaway for a group, a beach getaway for a couple, or a family stay in the city. Knowing this allows you to tailor everything from your property’s amenities to your advertising language to meet their specific expectations and needs.

Identifying Your Market

Once you know who you’re catering to, the next step is to define your market. This is typically a geographical focus—like areas popular for mountain getaways, or perhaps a location that’s conveniently within a three-hour drive from major urban centers. Because over 70% of travel lodging choices are predicated on location and budget constraints, it's reasonable to suggest that our market will be defined by our location and budget tier. To learn more about budget tiers (which is not the same as price!), see HERE. Location will be determined by the area drivers; for some, it may be Orlando, for others, it may be a mountain getaway in Utah. In my home state of Michigan, “up north” covers a lot of miles—and people often shop across all those miles.

Narrowing in on Your Submarket

The submarket refines the market; these are your direct competitors. Typically, your ideal guest will filter down on the booking platforms for specific amenities such as a pool, game room, king bed, etc. For example, your property might be situated in an area that not only offers stunning mountain views but is also pet-friendly and within a 20-minute drive of town amenities. This level of detail in understanding your market and submarket helps ensure your listing resonates with those who are most likely to book your property—and ensures your marketing strategy and price reflect this understanding.

I typically teach the submarket in terms of price drivers—it might be proximity to a specific location (Disney, National Park, Ski Lift), pool, view, game room, beach access. It can also be policies like allowing pets or your cancellation policy. It's not so specific that there are not other properties offering something similar, and yet relevant enough to have a meaningful impact on booking decisions.

Carving Out Your Niche

The niche you cater to can significantly differentiate your property. For instance, if your target audience includes families then narrowing in on families with teenagers and offering amenities and activities that cater to both adults and teens—like Wi-Fi, board games, access to trails, or proximity to adventure parks—can make your property particularly appealing.

This niche strategy ensures that when families are filtering their searches, your property hooks them in because it meets all their criteria: something for the teens, relaxation for the adults, and facilities that make everyone feel at home.

As a consultant specializing in understanding and achieving income potential in short-term rentals, niching down is perhaps the most misunderstood and underutilized strategy.

You can have multiple niches, and catering to a specific niche does not preclude others from booking your place just because they don’t, for example, have teenagers if you target families with kids in a certain age range. Niching is really a way of positioning your offer in a way as to convey its uniqueness.

Our goal here is to lure in our ideal guest by highlighting that we understand they are looking for a specific experience—and that we offer precisely that. It's adding a descriptor to all the elements of your submarket—romantic getaway for two, cook together in our amazing kitchen. Oceanfront view, don’t worry about having to pack all the stuff for baby—we’ve got you covered.

The Role of Booking Platforms in Market Understanding

Booking platforms lead with location and occupancy in how potential bookers search and narrow in from there. However, success in short-term rentals requires us to dig deeper, using these platforms as a key tool in conducting research to align our listings with the market. Further, by understanding how our ideal guest shops for a rental, we are better able to hone in on our submarket in order to effectively position and present our short-term rental so as to lure in our ideal guest in the search results.

Conversion Rates

Do you know what your conversion rate is? As the owner of a short-term rental property or small portfolio of them, the ability to get our offer in front of enough prospective buyers to achieve our income goals—at the level of desired income, would require us to do a lot of advertising. Or we just utilize the existing platforms to market our property, like Airbnb, VRBO, Booking.com, etc.

In doing so, not only do we easily get viewed by many warm leads we didn’t have to work for but we can assess how effectively our listing is performing. How booked our calendar is isnt always the best indicator - perhaps one of the most frequently asked questions I get in my business is "could I be making more." and our conversion rate is a great metric to help answer that.

Our conversion rate is a very helpful tool that gives us feedback on how our positioning—i.e., our lead photos, pricing, and headline—are standing out by assessing our listing to views click rate. We can also assess if our listing is resonating by assessing our click rate to bookings ratio. This feedback is a helpful way to assess our understanding of our marketplace and ideal guest and can help us diagnose any issues with our listing and achieve our maximum income potential.

Marketing Insights: Research and Presentation

Prospective guests often spend hours researching their options, akin to a consumer’s approach to buying a premium product. I've heard its 4-7 hours for vacationers. They compare what they can get within their budget across different platforms and listings. For the rental owner/manger, this means it’s critical to present your property in a way that clearly communicates its value proposition. High-quality photos, detailed descriptions of amenities, and highlighting unique property features all play a role in positioning your property within its defined market and submarket.

Conclusion: Crafting a Market-Oriented Strategy

Just as a skilled shopkeeper knows to arrange products in a way that appeals to their customer base, so too must a short-term rental owner understand and leverage the traditional marketing principles of targeting, market segmentation, and niche marketing. By doing so, we can ensure that our property not only meets the needs of our ideal guest but stands out in a competitive marketplace as the best possible choice for their needs. For property owners and managers looking to delve deeper into these concepts and enhance their property’s profitability, consider downloading our "Profit Checklist." This tool is designed to help you align your marketing strategies with market demands, ensuring that your short-term rental not only meets but exceeds guest expectations. With the right marketing approach, your rental property can transform from just another listing to a preferred mountain escape, promising both increased bookings and enhanced guest satisfaction.

Grab the Listing Optimizer Course - a quick crash course for niching down to maximize your STR income. Grab it today HERE -- and just for reading this you are getting it for $20 off its usual $47. An amazing deal at $27 for a practical, step-by-step video and PDF workbook course of 2.5 hours (in 5-10 minute chunks) to walk you through defining your audience, market, submarket, and niche -- with bonus content for using Chatgpt, tools to help analyze your market, and best practices for listing copy and photos. Don't miss out - grab the course today (make sure to use this LINK for the discount) and get more bookings!

Find Me on FACEBOOK or Instagram or LinkedIn as @theceohost

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Hey Boss! I'm Kate, owner/founder of The CEO Host. If you are interested in taking a leap into short-term rentals - or have some questions about your existing business, my goal - passion, and career, is to help YOU succeed. I've coached hundreds of folks getting started or looking to optimize, analyzed more deals (and duds) than I could count, completed thousands of hours of education and training, attended conferences... So don't be shy. A good CEO knows to bring in expert help - and that's what I'm here for! Lets HOP ON A CALL and chat!

Have you tried using specific hooks in your listings? Share your experiences and successes in the comments below or join our Facebook group for more tips and discussions!

Categories: : marketing