How to Build a Business Plan for a Holiday Rental Property

As with any investment, building a successful holiday rental business requires plenty of research and forward planning. 

Your success and ability to turn a profit depend heavily on how you manage and market your rental business, and for that, a thorough business plan is needed. We’ll explore the benefits of a holiday rental business versus residential properties, and what your business plan should include to ensure success.

Define Your Business Goals

The first step of any business plan should be defining the ultimate goal of the venture—what does success look like to you and what is it you’re working towards? You might be content with a booking a month, or you might want the property to be full 90% of the year. You might have long-term plans to expand your portfolio to various locations or multiple properties on one destination. Getting clear on these goals before you embark on your investment is crucial to ensure your business goals are achievable.

Research the Holiday Rental Industry

If you want to be successful in the holiday rental industry, you need to be competitive so understanding current trends and demands from customers is key. The first factor to consider is the location you’re looking to buy in.

You might want to keep your holiday rental in the UK so it’s easier to manage and monitor. Or, perhaps you have dreams of owning a luxury property in Spain, a popular tourist spot and a location where demand for holiday lets is high, or maybe you want to choose a charming rustic cottage in a quiet French village. 

You also need to know what to charge your guests so it’s important to look at what similar rentals in the area cost, and whether they’re good value or at the top end of the budget for holidaymakers. This will help you charge competitively, while also weighing up what you offer that others can’t, to generate a healthier profit.

Identify a Target Market

Another factor to research is the target audience for your rental. Are you targeting couples looking for a romantic getaway or do you want to invest in a family-friendly holiday villa that will suit adults and kids alike? Will your property be upmarket and luxurious or offer guests basic accommodation for stopovers?

Your guests are how your property will make you money, so you need to understand who they are and why you’re targeting them. It can be helpful to create different buyer personas based on the guests you’re hoping to attract. This profile covers their age, income, how long they may stay, and so on—make it as detailed as possible, as it will help you when marketing your business and growing it in the future.

Market Your Property

Understanding your buyer persona will help you when it comes to developing a marketing strategy, as you’ll know who you’re trying to target and the best platforms to reach them. Consider both online and offline marketing, along with any discounts or promotions you might run to garner interest and publicity for your holiday let.

There are several well-known holiday rental websites that you can list your property on to boost bookings and increase traffic. You may also want to set up your own personal website so you can target website visitors and highlight local and well-known attractions if you have a holiday cottage by a famous beach or near an Area of Outstanding Natural Beauty (AONB).

Likewise, if there are any unique design features of your property, these are worth promoting too. For example, maybe you’ve got a hot tub outside of your cabin property where guests can relax under the stars, or a modern kitchen in your city apartment that exudes glamour and luxury living. These are features that guests will be willing to pay extra for on holiday, so they’re worth mentioning to encourage bookings.

Develop a Plan of Operations

Your operations plan is simply how you’re going to run your business day to day. This includes whether you plan to hire staff, the standards you want to set for your let, and how you’ll stay on top of administrative tasks. One of the biggest aspects of your operations is cleaning, because your guests will expect a high standard of cleanliness, so you need to know how you’ll provide this. Will you hire a cleaning agency or handle the cleaning and maintenance yourself?

On a similar note, managing a holiday let can be time-consuming, especially if you’re investing as a side business. You may want to make use of property management software to streamline some of the tasks associated with maintaining your property, or enlist the services of a property management company to handle it for you. While it is an additional expense, it can also remove a lot of the stress of managing a rental property so it may be worthwhile for your circumstances.

In Summary

As we’ve seen, there’s a lot that goes into a successful holiday rental business. To summarise the key points we’ve covered, investors need to:

• -Clearly define your business goals and what success looks like to you.
• -Research potential locations, property styles, and your target customers.
• -Decide what amenities to offer guests and how to price your rental. For example, will your property be self-catering or will you offer bed and breakfast?
• -Make a plan for how you’ll manage the property and the administrative tasks that come with a holiday let, from accounting and bookings to cleaning after each guest leaves
• -Finally, create a marketing strategy to increase your bookings and identify the best platforms to list your rental on.

For further assistance with your project, schedule a complimentary discovery call; we’ll be happy to help you.