When you own homes for vacation rentals, the first thing that needs to be thought of is for how long would you want to entertain a set of guests. There are mainly two options which are famous- extended and short-term booking. What the best option is for you will depend on the various advantages and disadvantages that each of these booking options has.
To decide which one is the best option for you, you will have to look at the pros and cons of each of these booking types. Before looking at the advantages and disadvantages, first, get the basic difference between the two.
Extended booking is basically where your vacation rentals are given out to the guests for long periods of time. For several days or months and you incur a rent on it. The setup is like that of where you act as a landlord and your guests as tenants. Usually, the customer that you will have would be people who visit for an internship or a project basis assignment or for a long holiday. The reservation is mainly contractual in nature under this kind of booking.
Short-term booking is the more widely popular one. This is the one where people reserve affordable vacation rentals for a few days. The booking is mainly done by travellers who are on a small break. The booking is placed either by directly contacting the property or through an OTA. The customer is required to pay for the nights stayed and for any foodservice availed from the in-house restaurant if any.
Now, that the basic understanding of the two is clear, let’s look at the requirements of the two kinds of reservation. Basis this parallel drawn, you will be able to identify which one suits the most for your property and hospitality business.
• Hedged revenue
Rent is revenue that will be locked for some time. Markets have a tendency of rising as well as falling. Even if rents are a secured gain that you will have every month, you will lose out on the opportunity to milk any uprising in the market. If the market is supposed to rise again and the rents can go up again, then the extended booking is not the right option for you. In the same breath, it is a safe and assured income that you will get despite the nature of the market. The rental market is extremely less likely to fall in rent caps but definitely has the chance of rising.
• Guest screening
You will not be having to deal with your guests only for a few days but for a long period of time. Based on an agreement your relationship with your guest will be established. Once the agreement is levied on the reservation, you cannot evict the guests until the agreement expires. It is upon you to screen whom you allow living in your property as they will be responsible for its upkeep. You wouldn’t want to hand it over to someone who seems incapable of taking care of your site.
• Guest freedom
When someone is renting a place from you, they will want to feel at home in your property. You will have to allow the guest the liberty to enjoy your site as theirs. Basis which, they would want to make some changes and additions as per their convenience. You will have to be able to allow it. The more you interfere the worse the relationship will become between you and them.
Hiring an agency to do the logistics is better. You can offer the guests various packages that they can avail from to maintain the day to day cleaning and hygiene. Housekeeping is relaxed but not compromised in the extended booking. You don’t have to ensure cleaning after every guest leaves or rearranging as the same people would be living.
- Short-term bookings
All good vacation rentals like thevacation rentals Port Aransas ensure that there is no shortage in supplies. You will need to have enough essential supplies and stock them and upgrade fresh ones each day. This means that there is bulk buying involved as well. You will have to build a good supply chain for the same.
• Property maintenance
Maintaining the property is completely your responsibility. Well maintained vacation rentals have greater chances of occupancy rates. People want the best value attached to the prices they offer and maintenance is a crucial key to that.
Heavy dependency on operational logistics there in the short-term booking. From check-in, transit, pick-ups, housekeeping and so on, it requires a massive logistic force for it to function properly.
Having a property which you can give out for vacation rentals is a great sense of achievement and investment. Gaining good returns on this investment is the next most obvious option. You will be taking the aid of various OTAs to-do listings and also set up your own website for bookings to take place. Even before that, you will have to devise what kind of booking plan you wish to have.