2.5 Industry Analysis

CHAPTER 2

Are the interiors of your property different or better than the rest? • Have you designed and decorated to create guest retention? • Are there special themed rooms, a pool area, a game room, a hot tub, a spa-like bathroom, etc.? • Is the design linked to the guest profi le in the area, family vacation, groups, golf, skiing, beach fun?

2.5 Industry Analysis

For your VRP to be consistently profi table, you’ll need to be strategic and competitive in your company management plan. Again, do your homework! Dig into the most current industry data and trends for your region or area. Know the industry from a macro perspective, then drill down to the micro. Study other similar businesses to yours, look at and evaluate their strategies. You do not always have to reinvent the wheel. Sometimes the model is out there and you only need to follow an experienced VRP investor’s example. Of course, you’ll want to tweak that example a bit to fi t your personal situation.

One of the ways to do this is by carrying out an industry analysis. This is basically looking at other businesses in the industry and evaluating them. Doing so will help you craft your own successful business strategy and make sure you’re the owner who comes out on top.

Here are some sample questions that will help get your industry analysis started:

What is the average daily rate (ADR) of VRP similar to mine in the same location? • Would you class it as aff ordable or good value? • Is it low-market, mid-market, or luxury/ultra-luxury? • Think about the fi gures you come up with in relative terms, weighing the value of what the business is off ering against the price they charge. This will help you start to price competitively.

WEALTH AS A VACATION

Who is their target audience and clientele? • Families? • Couples looking for a romantic, quiet break? • Students and school groups who need large but basic accommodations?

Are they luxury units or more basic rentals? • Are they professionally decorated, upmarket rentals in the most expensive parts of your area? • Or, are they simple, modest holiday home rentals that even students could aff ord? • Do the rentals tend to fall on one end of the price range, leaving a gap in the middle of the market that you could fi ll?

What websites or agencies do they use for bookings and advertisements? • Are all of your competitors advertising on Airbnb, TripAdvisor, etc.? • Do they collaborate with local tourism agencies? • Are they all missing out on a popular, fast-growing booking website that only you know about? • Are they DIY managed, or do they utilize a vacation rental management company?