Vacation Rental Managers and Owners: Bookings vs Marketing Costs - Know Your True Costs

Bookings vs Marketing Costs

Caveat Emptor

More than ever we should all be extra vigilant in what we are buying ...and why. Recently, while conducting an end of year audit for a client we came across an all too familiar scenario:

Previous to our engagement, their mid size vrm was 100% dependent on the big listing sites and small distribution channels for their bookings.  Through the analysis we learned:

  • Majority of their  leads were from the paid channels - no surprise here.
  • 47% of their bookings came through the paid channels.
  • 53% of their bookings came direct (website, phone,repeat etc) !
  • 100% of their bookings came from 2 sources - direct and a large listing site !

You can’t measure what you can’t see ….

The client was convinced that they needed to be on every listing site because they “bring leads”.  As we know, there is a huge difference between bookings and leads - one pays the bills while the other pays their bills.  The client was never able to truly measure the performance and efficacy of their marketing spend.  Imagine the surprise when you find out that the majority of your lead generation is not performing ...at all.    The client now has the ability to measure the performance of their paid lead campaigns vs non paid - newsletters, Facebook contest, area events and specials.  In short, the client can now measure the performance of ALL lead generation, not just what the listings sites or PMS vendors will share with them.  

What can we learn from this ?

It is important to own your data in order to make better business decisions.  You are no longer making decisions based on subscription models...at least not for too long.  The distribution channel is “hungry” and betting that you will feed them  ...continually in the form of commissions.

Learn what distribution makes sense for your business based on location, annual performance reviews and peer review.

Consider rethinking your distribution strategy based on:

  1. If you know that 95% of your business comes within 100 mile radius from your city, why would you sign up with a distribution that caters to the markets outside of your region ?  
  2. If you have signed up for a “bundle” and only one of those sites is performing….change the bundle, change the provider or invest that marketing directly into your customer base.
  3. If you are working with a PMS that is dictating your choices in distribution- find another PMS vendor.


2016 promises to be another big year of changes and continued fragmentation. Use this time to consider changes to your marketing mix that work for your business...not your vendors.

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