Vacation Rental Owners Blog

Why I Don’t Get Mad When My Rental Is Booked & Renters Inquire Anyway

Posted: 12 Jun 2013 09:00 AM PDT

You put a lot of time and effort into keeping your online reservation calendar up-to-date. And you should: It makes a difference for your vacation rental listings, even impacting your placement in search results. You also don't want people to waste their time inquiring about dates that aren’t available.

Why, then, do so many people insist on contacting you about days you’ve already blacked out?! As I said in my last post, I don’t think renters are entirely to blame. Today, I’d like to explain why I’m happy to see every one of those inquiries land in my Inbox.

While extra inquiries take extra time and energy — something none of us has in abundance — every inquiry you receive is proof of your hard-earned marketing investment. More importantly, each inquiry has a dollar value attached to it, whether you land a new booking today or not. Let me walk you through how.

Why every inquiry is worth $$$

The last marketing email I sent to my contact list (of past renters and inquirers) resulted in a 2.5% conversion rate — which means that one email motivated 2.5% of the people who received it to respond and make a reservation.

Let's say my average booking is $1,000 (mine is higher, but $1,000 makes the math easier). Let's also say that my conversion rate is 1%.

At that value per average booking, I can calculate that every person on that list — what's called a lead in the marketing world — has an expected value of $10. Every time I receive an inquiry for an unavailable date, I remind myself that each response is like someone handing me $10!

That helps me avoid frustration, and reminds me to treat every inquiry with respect and responsiveness. If I'm booked, I kindly tell them so. I might refer them to my calendar and ask if their dates are flexible; they may change their dates and book sooner than I'd hoped.

These potential guests are also the perfect people to include in my future marketing efforts via my website or Facebook Page, for example, or to run a Groupon-style deal to fill empty off-season months.

How to calculate what your inquiry is worth

How did I calculate the $10 pay-off?

First, consider your average booking value. In my example, I used $1,000.
Second, insert your conversion rate for your marketing campaigns; in my example, I used 1%. If you don’t know what your actual conversion rate is, use a number between 0.5% and 5%; results vary from one property to another, but the 2.5% rate I achieved with my email campaign is pretty good.
Finally, multiply these two numbers. That's the value of each lead!

Sample Calculation

Your average booking amount	$1,000
Conversion rate from your email campaign	1%
Your average lead value	$10!

Pro tip: In this example, I’ve used an email marketing campaign — something I strongly believe every owner should be doing! Even if you’re not, however, you should still track conversion rates and lead values for all your marketing channels (listing sites, free ads on Craigslist, etc.). This is the only way to know which channels give you the best value for your money!

You may be thinking: ”But if only one or two of these inquiries convert, the rest aren’t worth anything.” However, you never know who will make a reservation until they actually do! That’s why I calculate the average value. My job is to treat each inquiry as if it is the one that will become my next booking.

Why you should follow through

I'm not recommending that you stop keeping your calendar up to date — or take misleading actions — to generate more leads; that would be bad for the industry and could have even larger negative effects on your business (e.g. like hurting your rank on listing sites).

However, I do recommend taking these extra inquiries in stride and responding to every one as if they are going to be a guest, even when you're already booked. If the volume is too much for you to manage, consider adding an auto-responder for any inquiry that comes in for dates where you're already booked.

In my next post, I’ll recommend different ways for you to proactively respond to these additional inquiries.

How do you handle inquiries when your calendar is already booked? Tell us in the comments below!

Wednesday, June 12, 2013