Scaling Success: 7 Strategies Enterprise STR Businesses Use That Growing STRs Can Adopt
The short-term rental (STR) and vacation rental industry has seen tremendous growth over recent years. More and more people are forming companies and getting involved. In the beginning, you might start out managing your own properties or those belonging to friends and neighbors – until you experience rapid growth.
As in other industries, this growth comes with growing pains that must be managed for long-term success in your STR business. No matter what size your STR business might be right now, you can look to enterprise-level rental businesses that manage hundreds or even thousands of properties for tips on management, efficiency, and profitability.
Here are seven strategies to keep in mind while you scale up your business.
1. Aim for Direct Bookings with a Custom Website
One of the best opportunities to grow your business is to expand beyond sites like Airbnb for your bookings.
While hosting on Airbnb can be a foot in the door for rental managers first starting out, you should ultimately aim to capture 60 to 70 percent of your business through direct bookings. For your listings with OTAs and short-term rental sites, focus your attention on those where you can be the merchant of record (MOR). This enables you to reach more people, cater to a more niche audience, and gain more control over your bookings and finances.
A custom website tends to be the preferred option for larger STR businesses. It allows you to fully customize your branding and creates a soft place for your guests to land. You can easily share any details you want about a property including video tours to give them the full experience. Template websites are less customizable and may not stand out in a sea of competition.
If you need help with website development, be sure to explore Ascent partners.
With direct bookings available on your website, offering various online payment methods is going to be crucial. Most guests will expect to see at least both credit and debit card payments accepted. This is something you will want to consider before setting up your website (and Ascent can help).
2. Take Control of Your Finances
If you are serious about growing your short-term rental business, becoming your own merchant of record (MOR) is a great step. Rental managers can enjoy greater financial flexibility when acting as their own MOR. It allows them to set the terms for accounting and control the cash flow in their STR business. Plus, rates are customizable and you get to be in charge of all items related to your money, brand, and reputation.
As far as payment processors are concerned, enterprise STRs do not use general, one-size-fits-all options like Stripe. Instead, you will want to look for an independent payment processor that is built specifically to cater to the needs of short-term and vacation rentals. Ascent Payment Solutions offers just this and makes it easy for guests to book with you.
Another crucial part of your scaling business’s financial health is setting up trust accounting. This entails using a separate account for all client payments to prevent money from mingling with your everyday operating expenses. In other words, it is similar to an escrow account. The best practice is to hold client payments until after their stay to reduce the risk to your business.
Some states require trust accounting, but it can be beneficial regardless of location. Trust accounting enables STR businesses to have more trust and transparency as well as financial accuracy. Furthermore, it also provides compliance and legal protection.
Along with trust accounting, PCI compliance is important for the data security of your guests. If you accept major credit cards, you must certify your compliance with these PCI standards. Your actions here can stop card theft and identity fraud in its tracks.
3. Use Professional Rental Management Software
Professional software solutions are available to meet the needs of every STR business, from small startups to companies requiring enterprise-level solutions. The key here is to find a solution for your booking and scheduling software that can grow with you whenever possible. However, keep in mind that growth might mean eventually moving to a new software for the next phase of your business.
For examples of professional rental management software solutions, our Ascent partners can help.
Of course, there are other solutions and integrations to look for beyond scheduling software. Some of the features many STR businesses love include electronic locks, guest communications, data analysis, and even travel insurance. The marketplace for rental managers features a wide array of tools and services that can increase bookings, reduce expenditures, and make any rental manager’s job a little bit easier.
4. Lean on Professional Services and Other Third-Party Vendors
Smaller STRs might be handling all of the day-to-day tasks related to business on their own while more established STRs might outsource some or all of these tasks. Commonly outsourced tasks can include accounting, cleaning, and even property maintenance.
While you may have a stricter budget as a small STR, outsourcing might make more sense. For example, professionals often have more skill and experience. This enables them to get the job done faster and with fewer mistakes.
Delegating some of these small or specialized tasks can free up the owner’s time for big-picture growth strategy and market research. When you are too busy with mundane tasks, it leads to greater levels of burnout and minimizes the time and energy available to find new opportunities to incorporate into your long-term business growth plan.
5. Standardize Operations
When it comes to setting up your business, consistency in services and amenities across different stays is essential. Standardized operations make it easy for you to keep track of everything and ensure that every guest has the same experience with your bookings.
What can you do to create more standardized operations?
First, you can schedule routine and proactive maintenance at all properties. This prevents you from having as many breakdowns and inconveniences for your guests during their stay.
You’ll also want to set up official policies for guests like cancellation policies, security deposits, and even guest contracts. Owner contracts are also important. Instead of scrambling to negotiate or resolve issues on a case-by-case basis, you can refer to the standards you’ve already established.
All of this enables you to keep detailed records, which makes it easier to manage and stay on top of all that needs to be done. With a framework in place, this new more efficient workflow allows you to get more done in less time. Not to mention, many of these steps can help reduce or prevent chargebacks.
6. Implement Data Analytics
Established short-term rental businesses look at data to understand market trends and guest preferences. These insights enable them to better identify lucrative new markets, when and where to expand, and hidden gem properties. The right data can even reveal opportunities to improve their operational efficiency and boost the business’s bottom line.
Making these data-driven decisions can help small STR businesses make strategic, calculated moves that scale up operations while minimizing growing pains.
At this stage, implementing STR booking software is a great first step. It allows you to collect more data about your customers which can be leveraged in your marketing to get your properties in front of more ideal clients.
7. Get Involved
Last but not least, you should also prioritize getting involved if you want to grow. One of the best ways to start networking is to join local, regional, and even national organizations that support the rental industry. This gives you best practices to follow, other STR businesses that you can look to as examples to emulate, and network contacts to ask for input and advice.
You can also attend conferences that allow you to network with other rental managers or vendors to ensure that you stay up-to-date on all of the current trends. This is more than just a vacation. Conferences and networking opportunities are a great chance for you to get to know people who are more established in the industry and can shed light and wisdom on what your next steps should be to unlock continued growth.
Your Destination for Payment Solutions
As you navigate the complexities of growing your small business, the right partner can make all the difference. Ascent Payment Solutions can help you grow your business with payment processing solutions for credit, debit, and cryptocurrency payments. We provide the technology required for a robust payment processing and reporting function so that you always get the money guests owe you for services rendered, and our experienced staff are always just a phone call away.
Take the next step in your business journey and elevate your financial transactions to new heights. Reach out to us today to learn more about how we can help your STR business grow!
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