[Matt Landau]

Today's MMM celebrates the inaugural episode of Season 3 of the Unlocked podcast. This episode titled The Biggest Lesson of My Career features Steve Milo, one of the biggest (and some might say most controversial) property managers in the US. I would encourage you to listen to this interview: it includes some harsh realities but also some deep lessons in survival no matter how passionate you are. Here's my big takeaway...

IDEA: Passion, for a vacation rental professional, is important -- it acts as your great hospitality differentiator and gets you through some of the harder times. But profit is even more primordial. If you run your vacation rental business at a profit, you will always be less susceptible to industry changes and market shifts. Oppositely, if your margins are thin or you are not operating at a profit, you become vulnerable to the forces of the emerging market and your passion (no matter how deep or unwavering) are in risk of being made obsolete.

ACTION: Envision yourself managing this business for someone else (ie. you are now the asset manager for someone you really admire and want to impress) and practice financial discipline.

• Create reporting to calculate your profit (if you have multiple properties, create individual reports for each property as well as the business as a whole)
  
• Compare your profit year upon year (if your yearly profit is increasing, great. If your yearly profit is decreasing, begin to look at the problem areas -- it's not too late)
• If you are struggling to find ways to increase profit, post your question in the thread below
• If you have ideas on ways to increase profit, please share them as well...

 

[Catherine]

I feel as if I am the only one who is still struggling to get my house up and running as a profitable business. I try to read and absorb as much information as possible on this site because the level of knowledge far exceeds any other site related to STR , in my opinion. In reading these posts it becomes very clear how much I do not know about this industry and how to run a profitable business.
My profit calculation: I added up monthly recurring expenses including insurance,mortgage, software apps, etc. to calculate my bottom line expenses per month then looked at net earnings from my listing site Airbnb. I took a booking amount (say $98) and multiplied it by 30 days in the month. If the amount is more than my monthly expenses then I could figure out the lowest price that I could offer to still be profitable. Is this method much too juvenile? I pay a Host 17% of gross room booking amount, and she also gets the cleaning fee. She uses my credit card to buy supplies, etc. for the house. I'd like to give her a set amount to spend per month, but am not sure how to do that? I am not good at this...oop:

 

[Flo]

We have been on this forum 2 years & have been profitable after our 1st year, through the help of this forum and the more experienced folks here who share best practices. We are not very technically oriented or as advanced as most forum members so we have really benefited from this group. We don't have anything earth shattering to share, but will share the steps we have taken to operate profitably.

Due to our new kids we unexpectedly added in 2018, we took a break from doing everything except that which impacted guest experience. We have a ways to go, and have to discount the rather static numbers of 2018 due to our family, but are making measurable progress in 2019

We have done the following basics to increase profitability:
-Have completed LSI Part 1 & 2, and are 50% through Part 3 and 25% through Part 4.
-Built a WIX website and use OwnerRez.
-Put Book Direct posters in our properties with business cards for folks staying from listing sites.
-Found local area referrals & local listing sites to increase traffic to our website.
-Used advice from forum members on everything from logo design, insurance, website build, decor, property names, low cost floor plans, to replying to a nutty review.
-Working on Nancy step by step campaigns like social media, last minute bookings, guest nurture etc.
-Just started a Google adword campaign.

By following the LSI steps and best practices we have:
-Already met last summer days booked & summer is just beginning. Most guests live close so our area has many last minute bookings.
-40% of direct bookings so far for summer through our website. Last summer we had only 15% direct bookings! Most of our direct bookings have a longer stay than listing sites.
-Went from about 100 to 400 visitors a month to our website.

 

[Catherine]

Flo You have really done well! The LSI steps are the road map to success from everything that I've read on this forum. I need to print out a copy and paste it to my forehead..osmosis....

 

[Nancy]

This is fantastic work!
I love how you are laser focused Flo and really concentrating on building a profitable and bullet proof VR business. Way to go!
I celebrate with you as I sip a glass of wine and a huge smile on my face!

 

[Matt Landau]

We have been on this forum 2 years & have been profitable after our 1st year, through the help of this forum and the more experienced folks here who share best practices. We are not very technically oriented or as advanced as most forum members so we have really benefited from this group. We don't have anything earth shattering to share, but will share the steps we have taken to operate profitably.

Due to our new kids we unexpectedly added in 2018, we took a break from doing everything except that which impacted guest experience. We have a ways to go, and have to discount the rather static numbers of 2018 due to our family, but are making measurable progress in 2019

We have done the following basics to increase profitability:
-Have completed LSI Part 1 & 2, and are 50% through Part 3 and 25% through Part 4.
-Built a WIX website and use OwnerRez.
-Put Book Direct posters in our properties with business cards for folks staying from listing sites.
-Found local area referrals & local listing sites to increase traffic to our website.
-Used advice from forum members on everything from logo design, insurance, website build, decor, property names, low cost floor plans, to replying to a nutty review.
-Working on Nancy step by step campaigns like social media, last minute bookings, guest nurture etc.
-Just started a Google adword campaign.

By following the LSI steps and best practices we have:
-Already met last summer days booked & summer is just beginning. Most guests live close so our area has many last minute bookings.
-40% of direct bookings so far for summer through our website. Last summer we had only 15% direct bookings! Most of our direct bookings have a longer stay than listing sites.
-Went from about 100 to 400 visitors a month to our website.

Flow this is so fantastic to hear! One of the biggest things that struck me about your note was 40% of direct bookings through website (compared to 15% direct bookings total last summer). Could you clarify, is the 40% total direct bookings (all of which came through your website) or is that 40% a percentage of total direct bookings? My next question was going to be what has your Total Direct Bookings (to third-party listing site bookings) ratio been last year compared to this one. If that number is going up, we’re cooking with gas!

 

[Flo]

@Matt thanks! It is 40% total direct bookings all of which came through our website so far for the summer, and 60% listing site bookings. Compared with only 15% direct bookings all of last summer, and 85% through listing sites. 3.5 times more direct days booked this summer than direct days booked last year at this time.

Nancy thank you so much! It's definitely a work in progress with a ways to go, but it is nice to see quantifiable results!

Catherine we are just chipping away at the LSI steps in the self grader and taking advantage of all the knowledge here. It is a process and definitely takes some time. We mapped out plans and due dates for chunks of LSI items, and started with the easiest items to make it a bit less overwhelming and are just moving down the list till we reach the end.