Vacation rental management: What small hoteliers need to know

What is vacation rental management?

Vacation rental management is the process of marketing, operating and maintaining short-term rental properties, including holiday homes and a range of small, independent accommodations like hotels, hostels and B&Bs. Effective vacation rental management involves handling online listings, guest communications, bookings, housekeeping, property maintenance and your online reputation. Vacation home rental management can be offered by third party providers or handled in-house.

Most independent hoteliers handle management themselves. On top of the basic tasks mentioned above, hotels are also tasked with streamlining check-ins, optimising occupancy rates and delivering a fantastic guest experience.

The strength of your management can be the difference between running a profitable property, and struggling to attract guests. In this guide, we’ll take a closer look at what great vacation rental property management looks like, particularly from the perspective of independent accommodation providers.

Why is vacation rental management relevant to small hotels?

A strategic approach to vacation rental management helps small hotels to maximise revenue, improve efficiency and compete with larger operators. It’s increasingly relevant as guest expectations shift and booking behaviours evolve, reflecting the rise of vacation rental platforms like Airbnb and Vrbo.

Today’s travellers expect flexibility, personalisation and a seamless guest experience, which short-term rentals are great at delivering. For a small, independent hotel, adopting vacation rental management practices can help you to better market your rooms to modern guests, and manage the experience in a way that keeps those guests coming back.

When you pair these management strategies with the right tools, you can ensure you’re listed across multiple platforms, you can automate a large portion of your internal operations, and you can respond faster to the needs of your guests. On top of all that, you can take advantage of the growing demand for unique stays to help your independent hotel business grow.

Key takeaways:

• Vacation rental management strategies boost bookings and guest satisfaction.
• This style of management helps small hotels stay competitive in an evolving market.
• The right tools streamline your operations and help your hotel grow.

What are the common vacation rental management fees?

Vacation rental management fees typically range from 10-50% of booking revenue, depending on service level. Basic services cost 10-20%, standard management runs 20-30%, while comprehensive full-service management charges 30-50%. Alternative pricing includes flat monthly fees or à la carte services for specific tasks like listing optimization or check-in support. For small hotels, in-house management using software like Little Hotelier costs significantly less while maintaining control over operations and guest experience.

If you’re looking for help with vacation rental management, service providers tend to charge a percentage of the booking fees you earn. These fees will naturally vary based on local availability, the services provided and the specifics of your needs and situation.

On top of percentage fees, there are also à la carte or flat-fee models that charge a set monthly rate for specific services like listing optimisation or check-in support.

Understanding these fee structures helps small hoteliers assess the return on investment and choose a management model that aligns with their goals. But for most small, independent hoteliers, management is a task that is best kept in-house, as it not only saves you money, but also grants you more control over your operations.

Rather than paying for a dedicated service provider, you can get just as much help, at a far lower price, from a smart management tool like Little Hotelier.

Key takeaways:

• Vacation rental management fees typically cost 10%-50% of earnings.
• Flat-fee and à la carte options offer flexible alternatives to percentage models.
• For hoteliers, in-house management with smart tools can cost less and give you more control.

How can I implement vacation home rental management for my small property? 

The popularity and influence of vacation rentals is growing:

• Since Q1 2022, vacation rental supply has grown more than 15% per quarter vs under 5% for hotels.
• In North America, vacation rental hosts generated over 207 million nights in 2023.
• Millennials dominate vacation rental demand, spending an estimated $180B annually.

These statistics reveal a clear market shift. Vacation rentals are capturing significant market share and guest spending that hotels traditionally dominated. Small, independent hotels can tap into this $180B millennial market by adopting vacation rental management strategies.

The good news? With a few smart tools and processes in place, even the smallest B&B, guesthouse, or boutique hotel can compete in the short-term rental market. Here’s how:

1. Choose the right booking channels

List your property on the platforms your ideal guests use. Along with popular OTAs like Booking.com and Expedia, you could investigate adding listings to vacation rental sites like Airbnb and Vrbo, although keep in mind that these platforms are very strict and selective on which properties they list, as their businesses are built on unique and personalised stays. If you are accepted, focus on the unique aspects of your hotel and your guest experience.

2. Streamline daily operations

Use property management software to manage all the channels you list on, automate guest communications, streamline check-ins and manage housekeeping schedules. Tools like Little Hotelier allow you to manage bookings, payments and guest comms from one central dashboard, saving time and reducing errors.

3. Focus on guest experience and reviews

A smooth, enjoyable stay leads to better reviews and more bookings. Offer clear check-in instructions, thoughtful amenities and plenty of advice on enjoying the local area. Post-checkout, ask for feedback and reviews to enhance your online reputation and improve your guest experience into the future.

Implementation priorities:

• Apply to list on vacation rental platforms that are used by your target guests.
• Choose a property management tool that can simplify bookings, communication and operations.
• Manage your online reputation by encouraging and replying to reviews.

I have nothing but positive comments about Little Hotelier. It has helped us to increase our direct bookings by 50% and increase our profit by 40%.

Janifer Harland,

Property Manager

Homewood Cottages

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What are the top-rated vacation rental management systems?

Top-rated vacation rental management systems include Little Hotelier, OpenKey and ChekIn. The best platforms help you to streamline bookings, automate your internal operations and manage multiple distribution channels from a centralised dashboard.

For small properties, choosing the right vacation rental management system means finding a balance between functionality, ease of use and affordability. The best systems use automation and integration to save you serious time and money, while allowing you to secure more bookings and earn more revenue than ever before.

Little Hotelier, for example, is purpose-built for small, independent hoteliers, and offers a complete suite of tools that power front desk operations, direct bookings, channel management, guest communication, and payments. 

Want to learn more about your options? Check out our complete rundown of the top tools here.

Key takeaways:

• Top vacation rental management solutions include Little Hotelier, OpenKey and ChekIn.
• The best systems balance functionality, ease of use and affordability.
• Automation and integration save time while boosting bookings and revenue.

FAQs on vacation rental management

How much does vacation rental property management cost?

Vacation rental property management costs vary based on a few different factors. Full-service management companies typically charge 25%-50% of booking revenue, while more basic offerings can take 10%-25%, or even charge a flat monthly fee. Some businesses also offer à la carte services like listing creation, cleaning and guest comms for an extra fee.

Which vacation rental management software is the best?

For small, independent properties, Little Hotelier is a top-rated option, as it’s a complete solution with direct booking, channel management, automated messaging and payment tools. The best option for your situation will strike a balance between affordability, usability, features and integration capabilities.

What are the benefits of short-term vacation rental management?

Short-term vacation rental management benefits small hotels through cost reduction via automation, time savings on administrative tasks, enhanced guest satisfaction from streamlined operations, increased bookings through multi-channel distribution, and revenue optimization using dynamic pricing strategies. Professional management eliminates double bookings, speeds up guest communication, coordinates housekeeping efficiently, and provides performance analytics. Hotels implementing strategic vacation rental management typically achieve higher occupancy rates, better reviews, and increased revenue per available room compared to traditional management approaches.