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4 Ways to Increase Your Vacation Rental’s Average Daily Rate

increase average daily rate

4 Ways to Increase Your Vacation Rental’s Average Daily Rate

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The Average Daily Rate is one of the top KPIs to measure the operating performance of your vacation rental. So, why is it important and how to increase it?

Whether you want to focus on revenue management, competitive benchmarking, or occupancy trends; using KPIs will lead to much more accurate results. One of major KPI metrics is average daily rate.

As a vacation rental owner, you’ll come across many key performance indicators that are vital to property management. These KPIs represent the success of a company and help business owners make informed and strategic decisions.

What is the Average Daily Rate and How to Increase it?

The Average Daily Rate is one of the top KPIs to measure the operating performance of your vacation rental. So, why is it important and what can you do with this information?

Knowing the ADR (Average Daily Rent) of your vacation home can help you come across major flaws in your business plan and maximize your revenue.

It allows you to compare your rates across longer periods of time, analyze key trends, and see how well your competitors are doing. It’s no secret that there are a lot of operational costs when it comes to managing a vacation rental.

If you strive to increase your bookings you need to keep up with the contemporary and up-to-day amenities, offerings, and visual experiences that many guests will look forward to.

Due to the booming advancement of travel trends, you must follow up with new and exciting ways that will increase your bookings. In order to do so, you need to consistently improve multiple aspects of your business.

Here are 4 ways to increase your average daily rate and drive your vacation rental to success:

1. Get Your Pricing Right

Price plays a big role in your average daily rate. If your prices are too high for your target, you won’t attract enough guests. If it’s too low, you’ll probably get more bookings but your profit and average daily rate won’t be ideal.

Finding the right price for your vacation rental can be a tricky process, if you don’t know what factors to consider.

Start by analyzing your expenses, your competitor’s prices, and occupancy rates throughout different seasons. Consider using dynamic pricing, an algorithm that helps to optimize your rates and increase profit.

2. Improve Guest Experience

In a study done by Chris Anderson, a professor at Cornell University, he concludes that hotels can increase their price by 11.2% (while maintaining the same occupancy), by doing one simple thing: raising their review score by just of 1 points!

Enhancing guest experience can be done in many ways such as improving communication. Offering useful information and amenities, preparing a welcome basket, or providing a unique and personalized vacation rental experience.

The happier your guests, the more likely they are to return in the future, and recommend you to their friends and family.

The result? More bookings and a higher average daily rate!

Also read on how to become a fantastic Airbnb host.

3. Start Upselling Services

Upselling is a sales technique that encourages guests to pay extra for services that can improve their overall experience.

good service to increase average daily rate

It might come as a surprise but many guests are more than willing to pay for the following:

  • Early check-ins or late check-outs
  • Airport pick-up or transportation during their stay
  • Luggage storage
  • A birthday or anniversary basket
  • Local tours
  • Grocery delivery
  • etc.

Brainstorm what services you could upsell for your specific business. Depending on where’s your location and what your target market is interested in.

4. Keep an Eye on Your Competitors

Keeping tabs on your competitors will always come in handy, but when it comes to average daily rates; it’s crucial to know what similar businesses are charging their guests.

Let’s say your prices are lower than your competitors but your overall ratings are much higher. This is a clear indication that it might be worth looking into your pricing strategy!


Keep a clear record of your actions, make sure that nothing slips out of your fingers and gets forgotten. It might take time and effort to implement the above tips and get desirable results.

There is a lot of things you need to do when you wish to increase your vacation rental booking; so start now and start diligently.

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