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Paid campaigns for short-term rental companies – tips that pay off

paid campaigns for str

The best way to think about paid campaigns is not as an expense but rather by return on investment (ROI). 

Of course, the goal is to get the majority of your website traffic organically, and for free. But you also want to maximize the amount of traffic that is reaching your site, and paid campaigns are a great way to do this. Paid campaigns are also a good tool for remarketing. Remarketing allows you to specifically target people who already visited your site organically with paid campaigns. The more touchpoints a person has with a brand, the closer they get to converting. 

The best channels for running paid campaigns in the short-term rental industry are Google and Facebook/Instagram.

In this article, we’ll cover the difference between running ads on Google Ads vs Facebook and Instagram, discuss a bit about budgeting for paid campaigns, and talk about paid campaigns over the holiday season.

Google Ads

Google Ads targets potential guests based on what keywords they are searching for. 

These potential guests are considered very high intent as they are already searching for similar solutions. That said, you may be targeting prospects that would anyway end up on your site organically (depending on how good your SEO is), and paying for their clicks, rather than letting them get to your site organically.

Facebook /Instagram

On these platforms you can target potential guests based on their online behavior such as their searches, and other pages or websites they’ve visited.

Unlike Google Ads, where your audience is most likely already actively looking for your solution or for accommodation like the one you offer – determined by what they’re searching for on Google – with Facebook and Instagram ads, you can actively generate interest and intent, as the ads are displayed to the audience as they are scrolling. For example, your audience may not be actively looking for their next vacation accommodation but seeing your ad may entice them to click on your site, and book their next travel.

Budgeting for paid campaigns

To understand if you can afford to run paid campaigns, you need to look at your profit margin. Based on the margin, you need to calculate how much of that you can afford and/or want to assign to paid campaigns. 

For example:

Average night cost (i.e. your revenue):  $200

Customer acquisition cost (CAC) (i.e. how much you have to spend to convert a customer): $100

Profit margin: 50%

Based on this calculation, you could decide to assign a share of your profit margin to paid campaigns to raise your volume of sales. This would decrease your profit margin however it should result in more bookings, and therefore higher overall total revenue and profit. Paid ads will also increase your brand exposure which is something hard to measure but worth considering. 

On the other hand, if your profit margin is smaller, paid campaigns may not make sense. The reason being that although you should get more bookings, your profit after costs would not grow, or may even decrease. 

Based on the above calculations, you should have an idea of the budget you have to spend on paid campaigns.

Holidays: the best time for running a paid campaign

A good time to run paid campaigns is ahead of holidays, namely, winter holidays and summer holidays in addition to any public holidays – local or those of your target audience. Keep in mind that despite increased demand, there will also be increased competition to win over bookings as your competitors will likely be upping their advertising strategies to secure these higher priced nights. But don’t worry – your strong brand and tactical website can help you prevail.

Additionally, with an increase in average cost per night during peak holiday seasons, you will also be able to increase your budget for paid campaigns, while keeping profit margins consistent. 

Pro-tip: remember to keep in mind not just the holidays in your country or region, but also the holidays where your guests may be coming from. Additionally, you can try to leverage local business events for your STRs – like conferences, events, and concerts happening in your area that may draw in a larger crowd.

To conclude

Running paid campaigns for STR businesses can expand your company’s reach and visibility, and help you reach potential guests you never would have otherwise reached. However, budgeting and monitoring the cost of your campaigns is key to making sure you can afford to run the campaigns and continue to be profitable at the same time.

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