Why Unique Selling Points Matter In A Down Economy

August 02 2022By: Sean D. Altice

When the economy is up, it’s to maximize the revenue for your vacation rental. But What happens when it’s not? It’s time to create a Unique Selling Point for your vacation rental.

 

As vacation rental hosts, we all look like geniuses when the economy is booming. There is an influx of traveler demand, the money is flowing freely, and you’re able to book the reservations you want when you want them. However, we all know how the tale of ‘tough times’ plays out when the economy is down. Inevitably, people are forced to tighten their purse strings,  consumer spending decreases, and we’re left with an oversupply of properties. While we all wish a bull market would command the economy, we know the reality is that markets will churn and markets will change.

Since the pandemic, the vacation rental market has been running red-hot, to say the least. Interested parties from individual homeowners to billion-dollar investment groups have been looking to capitalize on the market in an attempt to get in on the income-producing game. As a result, thousands of vacation rentals have been entering the real estate market ultimately leading to a dramatic increase in the overall supply of vacation rentals throughout the country.

Let’s look at Sarasota County for example. In Q4 of 2020, there were 4,847 individual vacation rentals listed on the Airbnb and VRBO platforms. By Q2 of 2022, there were 6,992 rentals, an increase of 2,135 rental properties or a 30.68% increase. This doesn’t include additional rental properties that are listed exclusively through HOAs and management companies that do not list on these platforms. That is a substantial increase.

During the guest-driven travel economy of 2021, an increase in accommodation supply of this magnitude could easily be handled by what seemed like endless traveler demand. However, the realities of the global economy have started to catch up. The end of Q1 2022 saw the cresting of vacation rental revenue growth. Through Q2 of 2022, we have seen a 12% decrease in overall occupancy and a 6% decrease in average room rental revenue. It appears the market has reached its maximum market saturation rate and the overall demand is not keeping up with the total supply of vacation rentals in the Sarasota County Market. With recent increases in inflation and a decrease in consumer spending, the tourism market is starting to see the squeeze.

This drop in market occupancy is contributed to several market factors including.

 

  1.     The return of the hotel industry and some travelers returning to hotel stays.
  2.     Changes in traveler habits including more overseas trips, and vacations targeted as family reunions and/or family trips requiring larger properties.
  3.     More demand for premium markets over their secondary and tertiary counterparts.
  4.     The return of urban destination travel.
  5.     The return of office work leads to fewer remote workers.
  6.     Economic fears and increasing gas prices.
  7.     Oversupply of vacation rentals in the market.

 

Does this mean that investing in the vacation rental market is a bad idea? I don’t think so. However, it does mean that there is going to be a fundamental shift in the way that properties are marketed and operated. Those properties that are able to adjust to the market changes will become lasting legacy properties in the short term market while many other properties will lose out and potentially fold. As a result, now is the time to establish yourself as a market differentiator. You need to make yourself stand-out from the crowd. The flower with the brightest colors attracts the bees. Why should guests choose your property, what is it offering, and is it fitting the needs of your target audience? Your property needs a Unique Selling Point.

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Find Your Unique Selling Point

Your property needs to be more than just 4 walls and a bed. Your Zillow listing description of “2 bed, 2 baths and private living space” isn’t going to cut it. Forget the sparsely furnished rooms with minimal art work, and scratchy sheets. It’s time to spruce up with some color, and get creative. Your property needs, features, amenities, aesthetics, design, and style that make your property pop.

In order to accomplish that stand-out look, we recommend examining the property using the 5 Stages Of Detail.  The 5 Stages Of Detail is an idea we borrowed from Disney (4 Levels of Details) in regards to how they design their theme parks. We combined this idea with aspects from the interior design trades to create a template guide on how to examine a property for its furnishings, function, condition, and quality. We teach this concept to our employees to help define the objectives that we are trying to achieve with our properties and the guest experience that can be expected.

The 5 Stages of Details start from the broadest scope of the property and narrow down to finer and finer details. Each point along the stages of detail reflect onto each other as we work down to finer details. As we work our way down to finer details we also reflect our work back to previous points to ensure we are still working within our larger objectives. The further into the details you go, the more you are able to define the unique characteristics and defining features of your property leading to an overall finished project that is much more appealing to your potential guests.

1. The Location – What is the 10,000 ft view? 

  • Where is the property?
  • What are its immediate surroundings?
  • What do the surroundings offer to the guest?

2. The Structure – What type of property is it? 

  • What is the property’s Architectural Style?
  • What is its floor plan?
  • What special structural elements can you highlight or feature?

3. The Function – Who does this property serve and for what purpose? 

  • Can you apply your property to a particular theme (cabin in the woods, beach house, etc)?
  • Apply a tagline or motto for your property (grab the attention of the traveler).
  • Come up with an ideal traveler – describe exactly who your home would be a perfect choice for vacation or travel desires.
  • Define any other functions of the property that can be highlighted to travelers (pool grotto, BBQ and entertainment space, chef kitchen and butler pantry, extra space for kid play, etc).

4. The FormWhat is the overall aesthetic aspect of the home? (artsy bohemian, modern chic, etc)

  • What are the furnishings? What are the fixtures?
  • How do the furnishings and fixtures contribute to the aesthetic, form, and function of a three-dimensional space: length, width and height, scale and size, position and relation.
  • What are the amenities of the property?
  • How can you highlight amenities that contribute to the aesthetic of the home?

5. The Texture – It’s the Finesse of the property. 

  • What small features and amenities increase the function of the property?
  • What unique pieces highlight or create a mood for the guest experience?
  • How do these textures engage the 5 senses and acquire the guests’ desires?

Additional Methods for Creating a Unique Vacation Home

Connect to the Local Community

Guests are looking for an experience that connects them to the destination to which they are traveling. Therefore, your property needs to be a part of the community and overall the destination experience. Bring the surrounding neighborhood, city, town, or landscape into the home where you are able.

How does your unique selling point connect to the local community? It needs to be more than just the location. Is it in the structure, form, or down to the textural details? If you’re in a beach community you may, for example, have a modern home in structure. While it may not look like a standard ‘beach house’ you can still add elements of the cool ocean breeze in the interior aesthetics of the home and textural details that bring the beach indoors thematically. Think art, fabrics, and interesting design elements that pull from the color and texture palette of the beach. Cool blues, textures symbolizing sea grasses or shells, and sandy earth tones to compliment the beachscape.

When in doubt, think about what the locals do. Travelers like to immerse themselves in the local culture, after all that’s why they’ve chosen the destination.  They want to feel like they have the inside scoop on the special places that only the locals know. Connect your guests to these experiences with maps, menus, or additional materials when you are able.

Be Environmental

Environmental considerations are at the forefront for many people in their daily lives,  and this includes creating travel plans. There is a growing market of travelers who specifically choose properties that are eco and environmentally conscious. These guests will specifically choose to stay at properties that share in their eco-conscious lifestyle. If you are practicing methods for sustainability, preservation, or eco-conscious living, highlight these features in your listing!

Make It Instagramable

Create some irresistible areas of the property that can be shared across social media. It’s human nature, we can’t help showing off our amazing vacation to our friends and family. Create an account of your home and share pictures, reels, and stories of the unique property you’ve created. Bring travelers into your home virtually to show them what you, as the owner, love about it. Then when they book, give travelers an area of the property to take that one-of-a-kind photo/video, and, make sure to tell them to tag your home account!

In the end, creating a Unique Selling Point isn’t about selling at all. Its about providing a guest experience. Guests are looking for the right place to spend their hard earned dollar on an accommodation that will match theirs needs. When you have tailored the guest experience to match those needs, you’ve built yourself an Unique Selling Point and the reservations will come naturally because you’ve specialized yourself to a target demographic.

About The Author
Sean D. Altice

I am the Co-Owner and COO of Altez Vacations. I believe that vacations are a way to cleanse the mind, body, and soul. As a result, I find great passion in connecting travelers and guests to the local communities and cultures that make each destination unique. Through our shared experiences, we are able to break down barriers and share within our commonalities.

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