TL;DR: A property management SWOT analysis maps your strengths, weaknesses, opportunities, and threats so you can decide where to invest, what to fix, and how to grow your short-term rental business. Do it quarterly to stay ahead of market shifts and competition.
In the ever-evolving landscape of the hospitality industry, short-term rental property management has emerged as a lucrative and dynamic venture. Contributing to this dynamic nature is the wide range of factors that can impact success, including competition, economic shifts, travel trends, and local short-term rental regulations.
As a short-term property manager, it’s important to take stock of the factors that are impacting your business so you can stay on track toward profitability and growth. The best way to do this is by regularly conducting a property management SWOT analysis. Through this assessment, you can gain valuable insights to make informed decisions and develop effective strategies moving forward.
Whether you’re a seasoned short-term rental property manager or considering entering the industry, understanding the SWOT factors will empower you to navigate the challenges and capitalize on opportunities ahead. Use your SWOT analysis to refine your short-term rental business plan and overall property management strategy.
What is a SWOT analysis for rental properties?
A SWOT analysis for rental properties is a strategic review of your internal strengths and weaknesses, and external opportunities and threats, so you can prioritize actions that grow revenue and reduce risk in your property management business.
By conducting a SWOT analysis, property managers can gain a comprehensive understanding of their company’s current position and the external factors that can impact their business. This analysis allows property managers to identify areas of competitive advantage, areas that require improvement, potential avenues for growth, and potential risks or challenges that may arise. With this valuable information, property managers can develop strategies to capitalize on strengths, mitigate weaknesses, seize opportunities, and proactively address threats, ultimately enhancing their short-term rental management operations.
How to conduct a property management SWOT analysis
Conducting a SWOT analysis involves a systematic approach to assess a short-term property manager’s strengths and weaknesses, opportunities and threats to determine the current status of the company and come up with a plan for moving forward. This isn’t a one-time assessment — you should perform a SWOT on a regular basis to monitor progress, create strategies, and measure results.
The process in four steps:
- Define your goal — what aspect of your business are you evaluating?
- Collect data — pull occupancy rates, reviews, revenue reports, and competitive intel
- List strengths and weaknesses — internal factors you control
- Map opportunities and threats — external factors you must respond to, then decide on actions
Start off with a clearly defined outline of the purpose of the SWOT analysis. Identify what aspects of the property management company you want to evaluate, such as its overall performance, market positioning, or a specific area of focus, and take it from there.
Strengths
Your SWOT analysis starts with identifying the strengths of your short-term rental business. Assessing strengths involves identifying and evaluating the internal attributes and advantages of your short-term rental management company. Your strengths will be the things you have direct control over that set you apart from competitors such as technology, infrastructure, finances, or human resources. By objectively evaluating these internal strengths, property managers can use them to gain a competitive edge, attract more property owners and guests, and build a solid foundation for success in the short-term rental industry. Here are some ways to assess your company’s strengths:
- Look at your data: Highlight areas of growth, exposure, and profitability. This can include occupancy, average nightly rates, or number of direct bookings.
- Evaluate core competencies: Identify the unique selling points, capabilities, and areas of expertise that set your company apart from competitors. This could include a strong reputation, extensive industry experience, effective marketing strategies, or a skilled workforce.
- Assess operational efficiency: Analyze internal processes, systems, and technologies that contribute to the company’s efficiency, productivity, and cost-effectiveness.
- Review customer satisfaction: Examine customer feedback, testimonials, and reviews to identify areas where the company excels in delivering quality service and exceeding customer expectations.
Your list of strengths might look something like this:
- 80% of properties are outperforming my occupancy rate benchmark
- Automated check-in and check-out process
- Efficient housekeeping team and quick turnover
- Generating more than “x” leads per month
- Strong distribution on multiple listing channels
Example in action: A 60-unit urban property management company might list “90%+ occupancy in shoulder seasons” and “automated check-in with smart locks” as key strengths that justify premium owner fees and differentiate them from competitors still handling manual key exchanges.
Weaknesses
When examining the weaknesses in a SWOT analysis for a property management company, it is crucial to take a critical and introspective approach. Like your strengths, the weaknesses you look at should be internal factors that you have direct control over. Here is a systematic approach to assessing potential weaknesses in your current business operations:
- Evaluate internal processes: Assess the operational procedures, workflows, and systems within the company. Identify any inefficiencies, bottlenecks, or areas where improvements can be made. This could include issues with communication, coordination between departments or management systems, or outdated technologies.
- Analyze service gaps: Take a close look at the services provided by the company and compare them to customer expectations and industry standards. Identify areas where the company may fall short or have room for improvement. This could include limited service offerings, inconsistent customer support, or challenges in maintaining quality standards.
- Seek employee feedback: Engage with employees at different levels of the organization to gain insights into potential weaknesses. Encourage open and honest communication to uncover any operational challenges, skill gaps, or areas where employees feel the company could improve.
- Conduct customer surveys: Gather feedback from current and past customers to understand their experiences and identify areas for improvement. This can be done through surveys, feedback forms, or online reviews. Look for common themes or recurring issues that customers have faced with the company’s services.
- Analyze industry benchmarks: Compare the company’s performance and practices with industry benchmarks and best practices. This will help identify areas where the company may be lagging behind or not meeting the standards set by competitors or the industry as a whole.
Your list of weaknesses might look something like this:
- Underperforming occupancy rate for specific units
- Underperforming on 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
Example in action: A manager notices that one OTA channel consistently underperforms and direct bookings remain flat. The SWOT surfaces the gap, so they invest in a refreshed direct booking website and adjust pricing strategy on the underperforming channel to close the revenue gap.
Remember, the purpose of examining weaknesses is to identify areas for improvement and growth. Once areas that need improvement are identified, prioritize them based on their impact on the overall business. Focus on weaknesses that have the greatest potential to hinder growth, affect customer satisfaction, or impact operational efficiency, then develop actionable strategies to address them. This may involve investing in employee training and development programs, adopting new technologies or software solutions, streamlining internal processes, or revising service offerings to better align with customer expectations.
Opportunities
Assessing opportunities in your company’s SWOT analysis involves identifying external factors that can be used to enhance the company’s growth and success.
Here are some steps to effectively assess opportunities:
- Identify local and regional opportunities: Look at the annual calendar to identify regional or local events, festivals, or conventions that you could capitalize on. This could include temporary residential opportunities such as summer courses at local universities or nursing schools, reaching out to organizers of conventions, or marketing to local cultural groups surrounding exhibitions or fairs.
- Research market trends: Stay updated on the latest trends and developments in the short-term rental, hospitality, and property management industries. This includes shifts in traveler preferences, emerging target markets, or new technologies that can enhance the guest experience.
- Identify untapped markets: Explore potential geographic areas or market segments where the company can expand its property portfolio or offer specialized services. This could involve targeting business travelers, catering to niche markets, or focusing on underserved regions.
- Analyze industry partnerships: Look for opportunities to establish strategic partnerships with complementary businesses in the hospitality or travel industry. Collaborations with local tour operators, event organizers, or service providers can enhance the value proposition and attract a wider range of guests.
- Stay current on technology: Assess the impact of technological advancements in the property management industry. Identify opportunities to adopt tools, platforms, or software solutions that can streamline operations, enhance marketing efforts, or improve the guest experience. Reassess regularly as new technologies emerge.
- Monitor regulatory changes: Stay informed about regulatory developments that may create opportunities for your company. This could include changes in local regulations, tax incentives, or government initiatives that promote tourism or property investments.
- Analyze customer feedback: Gather insights from customer feedback and reviews to identify areas where the company can enhance its services or introduce new offerings. Pay attention to guest requests, suggestions, or emerging trends in guest expectations to uncover opportunities for improvement.
- Evaluate competitors: Monitor the strategies and offerings of direct and indirect competitors in the market. Identify any gaps or areas where the company can differentiate itself by offering unique services, delivering exceptional customer experiences, or adopting innovative practices.
Your list of opportunities might look like this:
- Tap into local events, university programs, and conventions as repeat mid-term booking sources
- Remain open during offseason for nonpeak travelers
- List on new channels to expand your reach
Quick wins vs. long-term bets:
| Quick wins | Long-term bets |
| List on a new OTA | Expand into a new neighborhood |
| Target local convention center dates | Build mid-term stay packages |
| Optimize pricing on underperforming channels | Develop corporate housing partnerships |
By effectively assessing opportunities, a property management company can proactively align its strategies and offerings with market needs, expand its customer base, and capitalize on emerging trends.
Threats
When examining your property management company’s threats in your SWOT analysis, you are seeking to identify external factors that could potentially impact its success and sustainability. Here are some potential threats in the short-term rental industry and how to assess them:
- Competition: Evaluate the competitive environment in which the company operates. Identify direct and indirect competitors, their market share, strengths, and strategies. Assess their potential to attract property owners and guests away from your company.
- Regulations: Stay updated on local, regional, and national regulations that govern short-term rentals and property management. Changes in licensing requirements, zoning restrictions, tax policies, or short-term rental regulations can pose challenges and impact the company’s operations.
- Economic factors: Assess the potential impact of economic fluctuations, such as recessions, inflation, or changes in interest rates. Economic downturns can lead to reduced travel demand, lower occupancy rates, and financial constraints for both property owners and guests.
- Technological disruptions: Consider how emerging technologies or disruptive platforms in the sharing economy may impact the hospitality industry. New entrants or advancements in technology can alter customer preferences, shift market dynamics, or change booking patterns.
- Reputation and security risks: Reputation is crucial in the hospitality industry. Negative reviews, security issues, or safety concerns can significantly damage the company’s image and lead to a decline in bookings. Stay vigilant about potential risks and invest in security measures and guest safety protocols.
- Environmental and natural disasters: Assess the vulnerability of properties to natural disasters or environmental risks specific to their locations. Consider the potential impact of events such as hurricanes, wildfires, or flooding on property values, insurance costs, or the overall desirability of the area.
- Changing customer preferences: Keep an eye on evolving customer preferences and emerging travel trends. Shifts in consumer behavior, such as the growing demand for sustainable accommodations or the rise of alternative lodging options, can pose threats to traditional short-term rental property management models.
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
What to do with your threats list: For each threat, decide whether to avoid (exit a risky market), insure (add coverage for specific risks), diversify (spread across more markets or guest segments), or monitor (set quarterly check-ins to reassess). Not every threat requires immediate action — some just need a watchful eye and a contingency plan.
By identifying and evaluating potential threats, a property management company can develop strategies to mitigate risks, adapt to changing market conditions, and maintain its competitive edge. Proactive measures can include staying informed about industry developments, diversifying offerings, fostering strong relationships with property owners and local authorities, and implementing contingency plans to address potential threats.
Turn insights into action
Once your SWOT is clear, the next step is to turn insights into action with better distribution, automation, and analytics. A quarterly SWOT keeps you responsive to market shifts — but the real payoff comes when you act on what you find.
FAQs
Quarterly reviews work well for most property managers. This cadence lets you catch seasonal shifts, respond to new regulations, and adjust strategy before small issues become big problems. At minimum, conduct a full SWOT annually and revisit it whenever you’re entering a new market or facing a major business decision.
Include anyone with direct insight into operations, guest experience, and market conditions. For smaller companies, that might be the owner and one or two key team members. For larger operations, pull in department heads from operations, marketing, and finance. Fresh perspectives often surface blind spots.
Weaknesses are internal — things you control, like outdated software, gaps in your team, or inconsistent guest communication. Threats are external — market forces, regulatory changes, new competitors, or economic downturns. You fix weaknesses; you prepare for threats.
Absolutely. A clear picture of your strengths gives you talking points for owner pitches. If your SWOT shows 90%+ occupancy and strong reviews, that’s your proof of performance. It also helps you identify what you need to improve before scaling your portfolio.
Guesty’s dynamic strategy team is a group of devoted professionals committed to staying on top of industry insights and trends – and leveraging these to help impact our product roadmap. With a relentless pursuit of excellence and a continual search for innovative approaches to enhance our products and services, we keep Guesty focused on staying ahead of the curve.
