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Metrics every holiday let owner needs to check before renewing

Reading Time: 5 minutes

To renew or not to renew your holiday let advert is a familiar scenario for all owners who advertise on holiday letting portals. And making a decision on whether it’s worth your while taking on another subscription isn’t an easy one.

Deciding whether to renew requires careful thought, a bit of research and a good dose of maths. Here are some pointers to help you take an objective look at whether you should renew your holiday rental advert.

First, the pros:

  • Holiday letting portals are used by millions of holidaymakers searching for a property so by advertising you automatically access this huge audience.
  • Holiday letting portals usually dedicate large human resources and sums of money to marketing to boost traffic to their site, thereby increasing your chances of being seen.
    HomeAway spent around $60 million on advertising in 2014 and plan to increase this to $100 million in 2015.
  • An advert requires little maintenance from you other than regular updating your booking calendar and ensuring your letting details are correct.
  • Some holiday letting portals use secure payment methods giving guests financial guarantees that you may not be able to provide.
  • Holiday letting portals usually provide automatic booking enquiry alerts via your mobile phone making it easy for you to respond in real time to potential clients.

Then the cons:

  • Adverts can be costly, particularly if you go for a premium option to bring your listing to the ‘top of the pile’.
  • There are no guarantees you will get a return from your advertising. And it’s difficult to tell from one year to the next – a good return one year doesn’t necessarily translate to a similar performance the next. This may be due to increased competition from other owners, agencies listing their properties on the site, a change of business model e.g. a switch to commission from subscription or a change of site ownership.
  • Payment is usually required upfront, an initial outlay that can put a strain on your finances if you haven’t had a particularly good year.
  • You have little control over the format of the advert and may be restricted in how much information you can add.
  • Other advertising sources may give better results.

You can’t manage what you don’t measure

Next, it’s time to crunch the numbers to find out if it makes economic sense to renew:

Step 1: List all the places where you have advertised your holiday home over the last year. These include your website, holiday rental portals, social media sites and off-line advertising – for example, printed flyers, adverts in magazines etc..

Step 2: Include ‘passive’ advertising such as recommendations or referrals in your list. A surprising number of bookings come via word of mouth, particularly if your holiday let is well-established and attracts good reviews. This advertising is obviously free of charge, but you should still keep it in the equation.

Step 3: Write down the exact cost of each form of marketing. When calculating the cost of your website, add fees for domain renewal, hosting fees, development and pay per click costs. If your holiday home advert is a free listing but the company subtracts a commission from each booking, don’t forget to count this as part of the fees you paid.

Step 4: See where your bookings came from and work out how much you earned from them. Add the number of bookings each source of advertising brought you, the cost per booking and the revenue from each source.

You can now see at an easy glance how much you spent on each advertising source, how many bookings you got from them and how much they earned you.

Source                 Cost      Bookings      Cost per booking        Income       Profit
Homeaway         847        11                   77                                      7062            6215

Other useful metrics

Calculate the cost of the advert as a % of income: e.g. 847/7062=12%. Which advertising performs the best? If the % is high, it may make more economic sense to test commission per booking if the site has the option.

Work out the percentage that each site has contributed to your total occupancy and income as a % (excluding your repeat and own-website bookings) e.g. Homeaway 77 nights booked out of a total of 150 via all paid ads, equals 51%.

You may also want to calculate the advert cost per enquiry and conversion rate per enquiry. I prefer to concentrate on actual booking conversion rates though as time wasters who enquire about dates already booked and bogus enquirers can skew your stats.

Step 5: Take a good look at all your advertising methods and ask yourself the following questions:

  • Did the bookings pay for the cost of the ad, and more?
  • Did these bookings lead to any referrals?
  • Did any of these bookings rebook with me directly? (factor in the customer lifetime value)
  • How did the site performing compared to last year?

Step 6: Assess your answers and highlight your best and worst advertising methods. If your holiday let advert features among the best for returns and referrals, it’s probably worth renewing your subscription and taking steps to improve your advert.

If the site does not make economic sense to renew (the cost of the advert as a % of income is above 25%), consider giving renewal a miss. However, if a site provides bookings that you were not otherwise going to get, low season for example, it may actually be good value for money.

Do sites that appear to perform well only get peak season bookings that you could probably rent 3x over? You advertising should deliver off peak bookings also.

Don’t be afraid to ditch under performers that take up your time and produce no bookings. Owners spend an average of nine hours per week marketing and self managing their holiday rental properties – your time is not free.

If you do decide to renew, hold out until the ad expires and ask for a discount or special offer to be included – it usually works.

If you aren’t getting enough bookings or simply don’t have the time to market your holiday home and deal with bookings – use a holiday cottage letting agent.

What metrics do you track to evaluate your holiday rental marketing performance? Please add any tips in the comments.



  • Rick Bond |

    So nice to see an article on Stats. I’d like to suggest that being able to record the number of clickthroughs your site has received from an advert is also important for two good reasons:

    1. I’ve learned over the years, never to completely trust the answer people give you when they say ‘I found you on Google” or “Your website”. The chances are they came from another site on which you advertise but either couldn’t remember its name (usually the Google answer) or ‘Your site’ – when they are telling the truth but failing to mention the website from where they got the link to you.

    Put your faith in Google analytics to see where traffic to your site is coming from or, better still, use a site that not only allows web links but includes them in its stats report.

    2, The benefit of driving people to your website is that:
    * It imits the income you and your guests have to pay when booking via sites that apply such fees.
    * You are far more likely to convert an enquiry from your site to a booking than one from an advert, saving you a lot of time and frustration. This is because an enquiry from your advert will probably have been sent to many more properties at the same time, whereas an enquiry from your site has only been sent to you – vastly reducing the odds of converting it to a booking.

    So, when using stats to test the effectiveness of your advert on a particular site, do take into account the number of clickthroughs you have had from an advert too – and look for sites that enable this function.

    • Philip |

      Great advice as always Rick. You can’t manage what you don’t measure.

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