With another year coming to a close, now is the perfect time for vacation rental managers and owners to do a thorough year-end evaluation of your business to see how you performed this year and to make a plan to do even better next year!
If you haven’t already conducted a property management SWOT analysis of your vacation rentals, we suggest starting there.
What is a SWOT Analysis?
Identifying your vacation rental business’s strengths, weaknesses, opportunities, and threats (SWOT) help you properly evaluate your business’s standing against competitors. A SWOT analysis is a key component of a good marketing plan. Even if you already know how to do a SWOT analysis, when was the last time you sat down and conducted one for your property management firm? Things change over time and this is especially true for the accommodations business. We recommend conducting a property management SWOT analysis as part of your yearly evaluation. It doesn’t take very long to do, but a SWOT analysis can give you some great insights into your short-term rental business that you may miss otherwise.
How to conduct a property management SWOT analysis
Strengths. Your SWOT analysis starts with identifying the strengths of your vacation rental business. For your property management SWOT analysis, strengths will be the things you have direct control over that set you apart from competitors. These are internal things, and might include technology, infrastructure, finances and human resources. Your list of strengths might look like this:
- 80% of my properties are outperforming my occupancy rate benchmark
- Automated check-in and check-out process
- Efficient housekeeping team
- Generating more than “x” leads per month
- Strong distribution on multiple listing channels
It’s good to know what you’re doing well, so you can invest in those areas to keep them strong.
Weaknesses. Now that you’ve identified your property management strengths, weaknesses come next. Like your strengths, the weaknesses in your SWOT analysis will also be internal things you have direct control over, but these are the areas that are not working so well for you. Maybe you have one unit that is vacant at a higher percentage than the others, or you are struggling with overcoming a recurring logistical issue that is hurting performance. Perhaps your website needs an overhaul, or there’s something that continually comes up in guest reviews that you haven’t gotten around to correcting. Your list of weaknesses might look something like this:
- Underperforming occupancy rate for specific units
- Underperforming in one listing channel
- Not yet established in the local rental market
- Lack of social media presence
- Weak number of direct bookings
- Little automation of tasks
- Disorganized reporting
- SEO not meeting your benchmarks
It’s perfectly normal to try and turn a blind eye to the parts of your vacation rental business that aren’t doing well, but you can’t fix what you don’t see! As part of your year-end evaluation, be sure to make a plan to correct these weaknesses as soon as you can.
Opportunities. Now that you have a list of your property management strengths and weaknesses, identifying opportunities is next. This is where you start to look at external factors that could have an impact on your vacation rental business. For instance, is there a local event in your city that could attract more guests? Are there partnership opportunities with new tourist operations? Think about the things that are happening in your city and how you could be benefiting from them. Your list of opportunities might look like this:
- Capitalize on local convention center’s attractions
- Remain open during offseason for nonpeak travelers
- Take advantage of traffic to the local university
- List on new channels to expand your reach
Remember that the opportunities you identify will likely change from year to year as your city and your business develop and change. That’s why it’s so important to conduct a SWOT analysis on a yearly basis.
Threats. The final piece of your property management SWOT analysis is identifying any threats that your business might face. These threats will be things out of your control, but you still need to be aware of them and their effect on performance. Your list of threats may look like this:
- Local or federal legislation hurts travel
- Downturn in the economy
- Construction deters guests
- New resort opening in the area
- Natural disaster hinders tourism
Often, all you can do about the threats identified in your SWOT analysis is to stay optimistic while forecasting for the worst!
Now that you have your list of strengths, weaknesses, opportunities, and threats, you are much better equipped to create a plan of attack that will increase your business’s performance in the year ahead.