To compete in the short-term rental business, you must understand who you’re playing with. Conducting market research on your short-term rental competition not only keeps you in the ring but helps you understand your own business better. Here’s how to get to know your competition—and use that knowledge to better your own vacation rental management company.
Define Your Vacation Rental Business Goals
It’s helpful to have a firm understanding of your goals when doing market research on a competitor. What do you want to accomplish or understand better about your business, market, and audience? Where are you looking to improve? Knowing these things can help establish helpful research parameters before you start.
When looking into competitors, think local. In theory, every vacation rental business competes with heavyweights like Vacasa. But to do your business the most good, it’s easiest to compare apples to apples. Here are a few questions to ask yourself as you start your research:
- Who else is managing vacation rentals in your market? Focus your research on other short-term rental companies within a hundred miles or so of your location. This can look very different depending on where you’re located, of course: A vacation rental manager in Montana may have very few competitors nearby compared to a property manager along the coast of Florida.
- What size is their portfolio? It’s helpful to look at vacation rental competitors with a similar number of rentals as you. If you manage 10 properties and another company manages 100, the methods of management and resourcing might be a little different, creating a gap in understanding.
- What kind of homes are they managing? Vacation rental management is a unique business because, unlike a hotel, most vacation rental managers are in charge of individual, unique properties rather than carbon-copy suites. If your competitor specializes in highly niche properties like tiny homes and your portfolio is full of condos, then you’re not competing for the same audience.
Build Comp Sets
There are a couple of key pieces of data you’ll want to fully understand how your competitor operates: pricing, occupancy, and their response to market sensitivities. One of the easiest ways to analyze this data is to create a competitive set ( a comp set, for short).
Competitive sets take vacation rentals of similar size and location and compare bookings, differences in pricing, and historical demand.
For this exercise, you’ll want to use vacation rentals as close to the same as possible. They should have the same bedroom/bathroom count, offer similar amenities, and have a similar location. Several software solutions make building comp sets easy, many of which you can integrate straight into your PMS.
Comp sets can give you interesting information, even about aspects of your business that you may not think much about. Do they appear to be using a dynamic pricing strategy? Are they booked solid even during shoulder season when the market is slowest? Is your competition showing up on multiple booking sites? Are their images better than yours? This data can help you make important decisions about your business strategies.
Read Their Reviews
Reading through reviews of your competitor’s business can be just as enlightening as crunching numbers and scraping the internet for data. Word of mouth is a powerful tool, after all.
In addition to the actual reviews, observe how your competitor responds to them. Does it seem like they act quickly to a complaint and respond with compassion and positivity? Are there complaints of long hold times or a lack of response to inquiries?
While guest reviews are an obvious go-to here, remember that guests only represent one part of the business. Consider looking into employee reviews and owner reviews for a fuller picture. This might take a little bit more digging, but you may find comments and forums on social media or websites like Glassdoor illuminating, even inspiring you to update processes that may cause angst in your own staff.
Researching your competition can help inform your business practices and help you implement changes, whether in how you price your properties, market your rentals, or even the tools you use for reservations. Armed with this knowledge, you can provide your guests with the best experience they can have (and give your competitor a run for their money).