The direct bookings battle in the hotel industry has been going on for many years now. The rise of online booking companies like Airbnb and Booking.com over the past two decades has meant that hosts are often paying bigger and bigger commissions for their bookings. This is unfortunate, as both guests and hosts benefit greatly from direct bookings. As the Live Oak Lake Owner found, the results can sometimes be even greater than predicted.
Isaac French, together with his wife, bought a 5-acre property they found on Zillow and developed it into a rental property with seven A-frame cabins. What makes it stand out from the rest is its modern Scandinavian vibe which is fairly unheard of in Texas. When he was just starting, he relied super heavily on Airbnb but something kind of scary happened. Two weeks after he launched the property, they got suspended for no reason at all. They were not operating for 4 days and the whole property was just offline. He was freaking out so he created his own booking platform where guests can book directly and started promoting it on Instagram. He knew then that direct bookings were going to be important from a business value perspective.
Currently, 70% of all his bookings are direct and about 25% are Airbnb and the other 5% are Vrbo. But initially, it was 100% Airbnb though because that's all he knows what to do before discovering direct booking and how in a short span of time increased his revenues.
There are several advantages, the main ones are, you can make about 10 to 15 more profit because you're not paying the host and commission fees annually, monthly, per booking, etc., and pass the five percent savings to the guest. You also don't have a data wall with the customer so you actually can have their email and their phone number. For the repeat growth, that's really important.
Isaac has also found a couple of other revenue sources within his direct platform. He now charges a pet fee, an early check-in, and also buy firewood pellets as add-on purchases. Early check-in was his favorite because it was truly like free money and it's a fee that guests are happy to pay. He also realized a couple of months into the hosting process that tons of people wanted early check-in and it was a lot of stress on them to coordinate when to do that and how to do that. So, he thought of monetizing and put it as an option when they book so they know up front this is what check-in is, that you can get two hours earlier if you'll just pay this, and tons of people are more than happy to do that. In total between all three of those fees, he collects an additional $50,000.
Automation offers many benefits, especially for vacation rental businesses. It's the perfect way to improve guest experience, secure more bookings, build an online reputation, and save time. For any hospitality business, it can be hard to manage increasing operational costs while trying to remain profitable and increase revenue.
Isaac has been involved in different endeavors over the years growing up, but this was by far the most fun thing he’s ever done. He’s not just designing and building it but now implementing the management and the software to make it run automated super well and the pricing and then the marketing. With automation, he’s able to communicate in a more clear and concise manner, allowing him to respond to specific queries from guests. In the long run, it helps build credibility as well as efficiency and leads to more bookings. He also uses automation software to send emails and SMS messages to ask for reviews, understand concerns during the stay, and request general feedback to improve his services.
Since he launched the cabins on his direct booking platform, he gets between $250 to $500 per night and even more for holidays. When the property is fully booked, he usually gets $3,000 to $5,000 per night, but sometimes even more than that. Overall, he’s on track to gross a million dollars this year from seven doors and net about $550.
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