How to Plan a Holiday Let Business Model

When creating a holiday let business model, you will find that strategies differ from property to property, but there are a few consistent key points to consider when letting out your property.

How to Maximise your Income

As a property owner of a holiday let, your two goals are to boost your holiday let income as much as possible while providing the best experience possible for your guests. In your holiday let business model, you will need to consider both of these factors in order to maximise your income.

How do I calculate holiday let income?

You can discover if your holiday let is a good investment using the following equation:

You can also estimate your average income earnings with Sykes' income calculator. Use our Holiday Let Income Calculator to calculate how much holiday let yield you can earn.

What is the average profit on a holiday let?

According to Sykes' Holiday Letting Outlook Report, the average rental income of a holiday let owner is £24,500.

Generating Profit

To generate a healthy profit for your holiday let, you will need to provide resources that will ensure that your guests have everything that they need to enjoy their stay at your home.

On top of this, you will need to ensure that utilities provided such as water, gas and electricity are reliable and can be fixed easily in case of any misfortunes.

To generate a healthy profit, provide only what your holiday let can afford and don’t go overboard on your spend. Work out a budget for your resources and utilities to ensure that you do not overspend.

Important tip: Cutting your costs early may harm you in the long run. Having more expensive, yet more durable utilities could save you from forking out more money in the future.

With all this being said, you need to remember your guest satisfaction. Are they getting what they paid for?

Customer Satisfaction and Why it is Important in your Holiday Let Business Model

Without customers, your holiday let venture will fall at the first hurdle. That’s why it is vital to ensure that customer satisfaction is a cornerstone in your holiday let business model.

Dealing with customer queries before or after their stay helps to ensure that your guests have the best experience possible. Some holiday let owners like to utilise the help of a holiday letting agency to aid with handling customer queries.

Unique selling points in your property will guarantee you brownie points with your guests. Such selling points include a hot tub, a swimming pool, pizza oven or outdoor bar.

All of these will ensure that your guests have the best stay possible.

If your guests are truly satisfied with their stay, there is a high chance that they could rebook, generating a recurring income possibly over a number of years. They may even be tempted to leave you and your property a good review, helping you improve your overall holiday let guest reviews.

Pricing

It’s one thing having one of the best properties on the market, it’s another thing making it competitive in terms of pricing, making it affordable for your guests.

Take a look around at properties that compare quite similarly to yours in terms of location, features and utilities, to find the general costs of how much your competitors are charging.

Did you know? Holiday let management companies, like Sykes, invest a large amount of money to ensure that the prices displayed on their sites reflect the current holiday market. Promoting your property through such an agency will allow you to offer accurate and competitive prices.

Find out more information on how to price your holiday let.

Living Standards

The area that your property sits in will have a massive impact on how much you can expect to receive when letting out your property. If your home resides next to a local pub or bar, you can expect that not as many guests will want to stay at your home.

What does your property look like in comparison to your competitors? Is it old fashioned and outdated? If so, updating the style of your home will help your property stay competitive in a modern market.

Add-ons

Are the other properties in your area offering something that you don’t? If a property with a similar size to yours gets more bookings at a higher rate, ask yourself what more can you be doing for your guests?

Holiday Let Management

As a holiday property owner, you will need to be able to part with your property, especially in the peak seasons.

If your property is unavailable in key parts of the year, you could be losing out on a great deal of revenue and ‘buzz’ around your property as the go-to place for a seasonal holiday.

As with most businesses, restoration work on your property is costly in more ways than one. This is because whilst your property is being restored, refurbished or redecorated, you will not be able to take any bookings, losing out on valuable revenue.

Make sure that big restoration work is done during your quiet months to mitigate any loss in profit for the year.

If you're considering utilising a third party to help manage your property, consider the pros and cons of a holiday home management company.

Operations

The costs of running a holiday let is a huge area to consider when running your letting business as this will be the area that makes or breaks your success in the holiday let industry.

Cleaning

The minimum standard that your guests will expect from your property is cleanliness. Hire an effective cleaning team or agency that will meet yours and your guests expectations. Providing clean linen, utilities and resources is a vital part in providing a positive experience for your guests.

Finances

If managing your finances becomes too much for you, you can hire an external financial adviser or assistant who can ensure that your finances head in the right direction.

Management

Managing a holiday property on your own can be hard and it can become more difficult if you have to manage your holiday home remotely.

Sykes Cottages can help you manage your property including factors such as holiday let changeover costs, taking the stress away from you.