Seasonality in Short-Term Rental Market

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Seasonality in Short-Term Rental Market

David Adams
Real Estate Entrepreneur · San Francisco, CA · Member since 2016 · 19 posts · 5 votes

In many areas, demand tends to decrease dramatically in the winter causing rental rates to go down. How do you maximize your rental revenue in the face of seasonality?

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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
9y

We make our money in the summer so we can cut rates for winter months.

I change our pictures to show a roaring fire in the fireplace.

We are on a lake so people still like to come here in the winter to get away.

I had a couple from Canada stay for a week this summer and they came back and rented all of December.

I also have fall Football games for Clemson University where we get top dollar.

You could consider adding a hot tub (at least for the winter months). Maybe you could lease one through a spa company where they would maintain it also?

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  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    9y

    A guy I know that does this in a tourist-y area gives long-term discounts over the off-season months, although we have skiing in winter, colors in fall, temperate summers, and colleges and other regular attractions so there's a strong mix of demand. He gets $500/weekend on season, and cuts that for longer-term rentals. 

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  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    9y

    We make our money in the summer so we can cut rates for winter months.

    I change our pictures to show a roaring fire in the fireplace.

    We are on a lake so people still like to come here in the winter to get away.

    I had a couple from Canada stay for a week this summer and they came back and rented all of December.

    I also have fall Football games for Clemson University where we get top dollar.

    You could consider adding a hot tub (at least for the winter months). Maybe you could lease one through a spa company where they would maintain it also?

    3Reply
  • Michael Greenberg
    Investor · Denver, CO · Member since 2016 · 533 posts · 433 votes
    9y

    Depending upon the channels you are using this project can vary.  If you're using Homeaway, start a spreadsheet and keep tabs on @ 10 or competitive properties and their pricing during those times.  It's a bit of a manual process but it works.  If you're using Airbnb take a look at airdna.co (not .com) and search for your location.  You'll see the top 100 properties in your area that are on Airbnb.  You can then decide if you want to purchase their data, pretty reasonable cost, for a years worth.

    Mike

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  • Bill Higgins
    Investor · Austin, TX · Member since 2013 · 23 posts · 14 votes
    9y

    We're on the beach so seasonality isn't quite the challenge, but we certainly see a difference in demand.  I've talked to some other Property Managers in the south with excess of 1000 properties and they've found reducing your cancellation policies really moved the needle on bookings (maybe giving a 50% refund within 30 days instead of no refund).  My thought is guests tend to make more last-minute decisions (within 2 weeks) for a long-weekend getaway during the off-season and the thought of losing the entire booking is concerning.  These larger PM's have been able to prove-out the economics across a large range of properties and have said it certainly drives more bookings.

    I wouldn't suggest taking on longer term renters. It varies by state, but many states consider a 30+ day rental to cross the line from STR to LTR and renters rights come into play. There have been circumstances where the guest won't leave at the end of the stay and they now have renters rights.

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  • Kenneth Reimer
    Rental Property Investor · Sacramento, CA · Member since 2016 · 267 posts · 214 votes
    9y

    @David Adams I believe it depends on your market, first and foremost. However, I've heard of investors doing a few things. First, marketing towards the type of renter that your unit will be attracting is key. For example, you typically won't be working with potential tenants who have children during the beginning of the school year, so marketing towards working individuals will be effective. Also, I've found that pulling the trigger on capital expenditures in specific units will add value. Replacing a carpet or doing a full paint during the winter months as opposed to the summer will yield higher results. You'll need to do it eventually, so doing it when you need that extra push of perceived value is an effective way of getting the lease signed. Lastly, I've found that the sales techniques of managers and owner-operators is sub par. Simply asking the prospective tenant what is most important to them, and then tailoring the presentation of what your property has to offer directly to their needs/wants is INCREDIBLY effective.

    Hope this helps,

    Kenny Reimer

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  • Quanda Allen
    Investor · Washington, DC · Member since 2016 · 13 posts · 12 votes
    9y
    Great question. Driving traffic during non peak times might require more work but you could enlist the help of your local chamber of commerce or tourism bureau to compile a list of off season events and attractions. You could then leverage this list and market to individuals who might attend. To increase bookings, you might consider bundling your rental with amenities like event tickets or special attraction access. Be your guests' concierge!
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