The Keys to a Successful 2024!
Our once relatively stable and consistent industry has been rocked and rolled since COVID-19 hit, with lows of the shutdown and highs of revenge travel in 2021 and 2022. 2023 indicates that the ride may finally be coming to a stop as the industry stables to its new normal. For many people, this new normal may differ from what we want after the highs of 2021 and 2022. It's projected that 2023 occupancy will end 3% down, ADR will end 2% up, and overall RevPar will finish about 1% down.
2019, 2021, and 2022 saw demand for short-term rentals increase at a rate higher than the supply of short-term rentals. However, we have seen a switch in supply and demand for 2023. Demand for short-term rentals has increased by 5.5%, while supply has increased by 9%.
While the long-term success of our industry is inevitable, the next few years will be a test for even the most successful host. With so many changes to the landscape, how do I maximize my success in 2024?
Here are my 5 tips for having the most successful 2024:
Stay lean, and avoid all the fancy bells and whistles. With the industry's growth, there are new fancy, shiny tools or software to use regularly. Take stock of your tech stack and what directly results in bringing in revenue.
For all your managers, trim the fat. Review each property's annual performance and remove any properties from your profile that are not cash flow positive! We cannot control supply and demand, but we can control most of our expenses. Don't grow your portfolio just for the sake of it; ensure they are top-quality properties that cash flow.
Don't focus on the past. The industry landscape is changing rapidly, and it's essential to adapt to it. Just because a strategy worked in the last few years doesn't mean it will work this year. Be flexible and creative. It may be time to relax that length of stay requirements during specific periods.
Create as many booking opportunities as possible. The more opportunities you have to get a booking, the more likely you are to get the revenue. List as many reparable OTAs as you can handle while at the same time pushing to become less dependent on OTAs. If you don't have a direct booking website, you need one. Actively market this website to past guests.
Focus less on ADR and more on occupancy. Know your average booking window for the past few years, and aim to push that booking window out further. Fill a portion of your calendar more in advance than you have historically, as you can depend less and less on last-minute reservations to fill our calendar. And who wants to fill their calendar at the last minute with rock-bottom prices? Sacrifice a little ADR far out well past your standard booking window. Better to have a competitive price 150 days out when rates are $500 vs. having competitive rates 10 days out when rates are $100.
In summary, the most proactive host and managers will win in 2024. The simpler times may be coming to an end, and those who are the most provocative will win in 2024!