The best apartment rental websites
Which channels to use to efficiently boost profits on renting apartments ?
A successful sales strategy involves the use of a variety of diverse and mutually complementary channels. Using of only one or two distribution channels in an extremely competitive industry, such as tourism and hospitality, first of all hinders the full exploitation of the facility’s potential, and in addition it makes the stakeholders heavily dependent on specific bookings and conditions they set. We may try to compare the above statements to our own financial policy: if we plan to invest a certain amount of money and want to disperse the investment risk, we would acquire several different blocks of shares of different companies rather than play va banque by acquiring shares of one company for all the money we have. By founding our sales solely on our own booking system and one or two leading OTA (Online Travel Agency) websites, on the one hand we can hope to reach a huge number of prospects in a relatively easy way, and on the other hand – any changes in the positioning of the facility’s offer or the amount of commission made by this website may have a significant impact on revenues.
First: the leading OTAs
While the direct sale of apartments generates the highest profits, it is generally responsible for a lower percentage of total revenues. Therefore, when developing an optimized distribution strategy, at least a few agent websites (OTA) should be taken into account, after a very careful selection. It is worth taking into account the leading websites in this category, i.e. Booking.com and Expedia – both in Poland and worldwide they generate a significant share of bookings. Giving them up would significantly limit distribution; however, an optimized distribution strategy should primarily be based on a definitely broader spectrum of channels available. Data provided by the YieldPlanet Channel Manager clearly indicates that the optimal number of channels for the apartments is between 4 and 6; however, assuming that these are the hotels that shape the market and are the trend testers, this number is likely to increase. It is very likely that in the years to come, better results will enable the apartments to increase the number of agents.
Second: the profiled OTAs
With leading OTAs, our offer can reach the farthest corners of the world – to customers who would have been hardly accessible to us without appropriate tools and massive promotion investments. Still, it is worthwhile to complete our distribution strategy with a few smaller OTA websites, which will enable us to reach customers potentially interested in our offer. If your apartment is located in a place frequently visited by Russians and/or potentially of interest to Russians, it is worthwhile incorporating into the distribution strategy the local OTA websites that enjoy great popularity in Eastern Europe – for example Ostrovok – or in Central Europe – Szallas.hu / Nocleg.pl. An interesting option is also the Chinese Ctrip website, thanks to which the Czechs and Hungarians have already been winning guests from the Far East.
By analyzing the potential of a specific property and its immediate environment, it is relatively easy to pinpoint potential agents who will guarantee us the ability to reach the target group of customers and at the same time will offer competitive terms of cooperation (e.g. lower commissions). Targeting the guests’ nationality is not the only available option to search for new OTAs to cooperate with. If you have a apartment located in a tourist resort that offers excellent conditions for winter sports, look for OTAs that aggregate such facilities. Are you the owner of a luxury property? Highlight it on websites dedicated to wealthy customers who are looking for premium locations – such as Prestigia, LifeStyleHotels or Mr & Mrs Smith. It is worth looking for OTAs that specialize in targeting customers representing a specific profile. While these are niche websites, they usually provide a high conversion rate and a low cancellation rate, which is also of great importance.
Our apartment distribution strategy surely cannot fail to include Airbnb, a first choice for many when looking for accommodation for a private or business trip. Airbnb emerged from the sharing-based trend. In sharing economy, instead of buying a good or service, we simply rent it or share it with others. According to this rule, a landlord can rent a flat to another person while it is vacant. And what if we set up a platform where we could search for all the apartments and flats that are rendered available in this manner? This is how Airbnb entered the short-term rental market. According to YieldPlanet data, Airbnb generates more bookings than alternative OTAs or proprietary booking systems, which is why it is worthwhile taking advantage of the website’s potential.
Fourth: Booking Engine
In order to avoid unnecessary risks and consequently potential losses, in planning the distribution strategy it is advisable to include many mutually complementary channels in it. However, the starting point should be the Booking Engine, i.e. a proprietary booking system that would enable us to make bookings directly on the property’s website. As shown by data reflecting the share of bookings registered in the YieldPlanet Channel Manager for 2018, the potential for growth of direct bookings in Poland still remains high when compared to Western European countries.
Why is it worth striving to compete for a direct customer? First of all, due to the chance of avoiding the commissions that have to be paid to the OTA account in the indirect channel model. The growing position of the leading players entails the risk of further increase of the cost of winning guests, so it is worth securing the higher share of bookings made via our proprietary booking system. While the task is not a simple one, the efforts made in this regard should translate into tangible benefits in a relatively short period of time.
Fifth: cooperation with businesses
Apartments are becoming increasingly more popular with business customers, so if you manage a facility located in a large city, especially near business districts, it is advisable to include this group in your distribution strategy In order to reach business customers you should mark your presence in the HRS (Hotel Reservation Service). Another effective method of winning guests is to cooperate with wholesalers, i.e. agents acting as intermediaries in the apartment distribution process, such as Hotelbeds.
While developing a distribution strategy, you can not only effectively diversify the sources of revenue but also minimize the risks. An effective strategy, however, should be first and foremost a flexible strategy, adapted to constantly changing market conditions and customers’ habits. It is therefore necessary to monitor the market on an ongoing basis, automate the sales process using available technological solutions (including PMS, Channel Manager and RMS), and constantly analyze data and make business decisions on their basis.
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How to build an on-line apartment distribution strategy