Hi, I’m Chinta a business data scientist at Bukit Vista. I leverage data analytics to identify and implement revenue generation opportunities across our 100+ vacation rental business in Bali. By analyzing large datasets and uncovering insights, I have seen how data-driven
booking strategies can optimize pricing, occupancy rates, and guest satisfaction.

In the dynamic world of vacation rentals and hospitality, hosts often grapple with a fundamental decision: should they focus on short-term bookings, which offer higher nightly rates but frequent turnovers, or opt for the stability of long-term bookings with a potentially lower per-night income? This dilemma is a crucial one, and understanding the pros and cons of each approach is essential for success in the industry.

Short-Term Bookings:

Pros:

1. Higher Earnings Per Night:Short-term guests typically pay more per night, which can lead to higher overall income, especially in peak seasons. As shown on the graph below, you can have a higher daily rate per night for shorter stay compare to longer nights.

2. Flexibility: Short-term rentals offer hosts the flexibility to adjust pricing and availability quickly, allowing them to maximize revenue during high-demand periods.

Learn more about dynamic pricing

3. Meet Diverse Guests: Hosting short-term guests provides an opportunity to meet people from various backgrounds and cultures, enhancing the host’s social experience.

4. Boosting Listing Performance: Short-term bookings accumulate a higher number of bookings compared to long-term bookings. This accumulation of bookings makes the listing highly active (due to frequent transactions). Furthermore, it increases the likelihood of receiving positive reviews, which are crucial for the listing’s credibility in the eyes of potential guests.

Cons:

1. Higher Turnover: Frequent turnovers mean more cleaning, maintenance, and coordination efforts, which can be time-consuming.

2. Income Variability: Income can be inconsistent, with fluctuations based on the season and demand.

3. More Work: Managing short-term rentals can be more labor-intensive, requiring prompt responses to inquiries, check-ins, and check-outs.

Long-Term Bookings:

Pros:

1. Stable Income: Long-term guests offer hosts a steady, predictable income stream, making it easier to budget and cover expenses.

2. Less Management: Fewer turnovers mean less cleaning and communication, allowing for a more hands-off approach.

3. Lower Wear and Tear: Long-term guests typically treat the property with more care, resulting in less wear and tear.

Cons:

1. Lower Nightly Rates: Long-term guests usually pay less per night, potentially resulting in lower overall earnings.

2. Less Flexibility: Longer leases mean less flexibility in adjusting prices or using the property for personal use.

3. Extended Vacancies: If you encounter a problematic long-term guest, it can lead to extended vacancies and income loss.

4. Diminishing Listing Performance: Long-term bookings create extended booking blocks that render the listing inactive in Airbnb’s algorithm, resulting in a gradual decline in the listing’s ranking. Additionally, the limited number of bookings that occur throughout the year results in fewer reviews being collected.

Finding the Right Balance:

In conclusion, when asked whether long-term or short-term is better, the answer is that short-term booking is preferred because it offers more benefits to listing performance and bookings. However, even though short-term booking is recommended, a long-term booking strategy is not ruled out and can be implemented if there is a significant risk associated with daily rentals.

This is something that Bukit Vista experienced during the pandemic. The strategy employed was a long-term approach due to low turnover and lockdown measures in place. Here is sample of property that transforming from “both long-term and short term” strategy to “only short-term” strategy during the pandemic.

Hope you have a better understanding of which booking strategy to employ now. If you want to learn more about the optimal rental property strategy, we provide a business plan for property owners who wants hassle-free management from Bukit Vista.

Unlocking the Best Booking Strategy: Short-Term vs. Long-Term Booking

Short-Term Bookings:

Pros:

Cons:

Long-Term Bookings:

Pros:

Cons:

Finding the Right Balance:

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