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š Hereās how to boost revenue in 2025
And the latest UK performance from Key Data
Phil Jackson
February 22, 2025
š Welcome to this weeks newsletter. Your key takeaways this week:
ā” EPC Rule Changes Incoming ā Short-term lets in England & Wales may soon need EPC rating C to operate. 71% currently fall shortāremedial costs could hit Ā£6,800+.
š” Welsh Visitor Levy Backlash ā The Wales Tourism Alliance disputes government claims, warning of job losses and economic harm.
šļø Tripadvisor Bets on Experiences ā STR hosts can boost revenue by offering unique guest experiences or partnering with local businesses.
š 2025 Market Insights ā Demand is flat; late bookings bring lower revenue. Encourage early reservations and manage pricing smartly.
š Booking Strategies Matter ā Direct bookings = higher revenue. Understand which channels attract the best guests.
š Free Guest Review Template ā Help guests rate your property fairly with our downloadable guide.
See you next Saturday at 5pm?
Phil
Founder, My Holiday Guide
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IN THE NEWS
Proposed EPC Rule Changes
The government is currently going through a consultation period on its proposed changes to the EPC regulations. In summary:
Proposed changes to the Energy Performance Certificate (EPC) system could significantly impact short-term rental properties in England and Wales.
The government is proposing that short-term rental properties will need a valid EPC with a minimum of a C rating to continue letting the property. Currently, these properties are exempt.
A recent survey suggests that 71% of holiday lets currently fail to reach this threshold.
If your property fails to reach a C, remedial work will be needed, potentially costing an average of Ā£6,100-Ā£6,800, with a cost cap of Ā£15,000.
There will be a greater weighting for āgreenā heating technologies (like heat pumps) and reduced weighting for gas or oil. If your property is rated D or below, it is increasingly unlikely that you will achieve the required grade if you continue to heat with fossil fuel.
The Ministry of Housing, Communities and Local Government is collaborating with the Department for Culture, Media and Sport (DCMS) to align the definition of short-term rental property within the regulations.
Act now by completing the EPC impact survey compiled by PASC. The closing date is the 25th of February.
Welsh Visitor Levy Hearing Response
The Wales Tourism Alliance (WTA) has expressed strong disagreement with statements made by Mark Drakeford regarding the proposed Welsh Visitor Levy. The WTA contends that Drakeford misrepresents the tourism industry's employment figures and downplays the potential job losses resulting from the levy. They also challenge the accuracy of the data used to model the levy's impact and criticise the inclusion of children in the tax, arguing it unfairly burdens families. Furthermore, the WTA asserts that Drakeford underestimates the cumulative effect of recent legislation on the tourism sector, especially regarding self-catering accommodations. Ultimately, the WTA believes the levy will negatively impact the Welsh economy by costing jobs and money, even in the government's best-case projections.
Tripadvisor Doubling Down On Experiences
According to Tripadvisor Group's strategy, Experiences are key. Drawing on the Tripadvisorās focus, what can STR hosts takeaway?
Capitalising on the growing trend: Consider offering unique experiences to enhance guest experience and grow revenue.
Viator as a model: Viator (Tripadvisorās dedicated experiences platform) has seen significant growth. You could explore what type of activities Viator offers to gain ideas for your property.
Strategic alliances: You could consider partnerships with local businesses or experience providers to create attractive packages for your guests.
LISTING PERFORMANCE & GROWTH
Tips and strategies to enhance the visibility and attractiveness of your holiday let.
Key Data 2025 Market Analysis
PASC held a webinar with Sally Henry and James Weatherby from Key Data this week which provided some great insights into how the UK STR sector performed in 2024 compared to 2023, but also how 2025 is shaping up compared to this time last year (these are called the pacing metrics).
A recording of the webinar will be placed on the PASC website however it may take a few days to appear so feel free to check back there later to view the whole webinar.
If youād like a summary in one sentence, 2025 is looking pretty flat and hosts need to carefully manage their rates further ahead to avoid a drop off in income due to lower priced later bookings.
Here are some of the highlights and takeaways from the webinar:
Encouraging Earlier Bookings Is Essential
In 2024 40% of bookings were made within 14 days of stay. These bookings only make up 25% of revenue.
Highlighted area shows difference between pacing (predicted) and actual ADR, showing how later bookings at lower prices are reducing revenue. Slide source: Key Data
To encourage earlier bookings and avoid lower-priced later bookings, Key Data suggest a few key strategies:
Early Booking Incentives | Earlier reservations tend to command higher rates and longer stays.
Proactive Pricing Management | Taking action early can help avoid drastic price reductions. Prices often get squeezed closer to the departure date.
Targeting Direct Bookers | Direct bookers often book further in advance and stay longer.
Channel Optimisation | Understanding that different channels bring in different types of bookers is important (see later commentary).
Data-Driven Communication | Utilising data to inform pricing and booking strategies is key.
Reacting to Booking Trends | If bookings aren't coming in as expected, it's important to adjust strategies promptly.
Higher Occupancy Doesnāt Equal Best Revenue
Slide source: Key Data
The relationship between reservations and revenue was discussed. A key point is that the timing of bookings significantly impacts the revenue generated.
Key observations from Key Data:
Shorter Length of Stay Impact | If the length of stay is contracting, the revenue will likely shrink too.
Late Bookings and Lower Revenue | In 2024, 40% of all bookings in the UK were made within two weeks of arrival, but these late bookings accounted for only 25% of the total revenue. This indicates that last-minute bookings, while frequent, contribute less to overall revenue.
Early Bookings and Higher Revenue | Bookings made six months in advance accounted for 10% of reservations but contributed to 20% of the revenue. This shows that early bookers tend to spend more.
Channel Impact | Different booking channels bring in different types of bookers, affecting revenue. For example, direct bookings tend to have a higher average booking value.
Booking Window Trends | Booking windows are shortening, leading to a more reactive market. Understanding and adapting to these trends is crucial for optimising pricing strategies.
Revenue Management | RevPAR (Revenue Per Available Rental (or Room)), which combines occupancy and rates, is a critical metric for evaluating the success of a pricing strategy and helping you balance occupancy and property rates.
One tip highlighted was to consider offering early check-in or late checkouts to supplement income when you have a gap night between bookings, rather than filling the gap night with a low cost, high hassle single-night booking.
Use Booking Channels As A Strategy
Slide source: Key Data
Key Data highlighted how different booking sources impact several key metrics. For instance:
Type of Booker | Different channels attract different types of customers, which affects average booking value and length of stay.
Direct Bookings Win | Direct bookers have the highest Average Stay Length and highest Booking Window
Average Daily Rate (ADR) | Out of the major booking sources, VRBO has the highest Average Daily Rate
Booking Window | Airbnb and Booking.com tend to have very late booking windows, correlating with a high percentage of bookings made within 14 days of arrival.
Channel Optimisation | It is important to understand the type of booker each channel brings in to optimise strategies accordingly. Using multiple channels is beneficial for bringing in customers, but it is important to consider how each channel impacts the types of bookings received.
Note : Key Data did highlight that if you use Super Control, you can link Key Data to your account FOR FREE.
Assessing Supply And Demand Is Key
Key Data stressed that assessing supply and demand was crucial for optimising pricing and occupancy strategies, enabling you to make data-driven decisions that balance occupancy rates with revenue to maximise overall performance.
To effectively assess supply and demand, the Key Data suggested focusing on these key areas:
Assessing Supply:
Local Monitoring | Regularly check online platforms for nearby available properties, including new listings.
Competitive Analysis | Evaluate your property's appeal against competitors.
Assessing Demand:
Market Position | Determine if you're performing in line with, ahead, or behind the market trends.
Occupancy Analysis | Monitor guest-paid occupancy rates to gauge paying guests.
Pacing Data | Compare current bookings against the previous year to understand booking trends.
External Factors | Account for weather, events, and economic conditions that can affect traveler choices.
Integrating Supply and Demand:
Data-Driven Decisions | Use real data to tailor strategies for specific properties and areas.
Occupancy-Rate Balance | Recognise the inverse relationship between occupancy and rates.
RevPAR as a Metric | Utilise RevPAR to measure overall strategy success by balancing occupancy and rates.
Behavioural Metrics | Monitor length of stay and booking windows to adjust pricing and marketing.
Whilst companies such as Key Data will always provide the most comprehensive set of information, if you want to view some FREE comparative data for your area, check out our newsletter from November where we highlighted a couple of FREE resources you can tap into.
FEATURED RESOURCE
Highlighting useful tools and resources for your holiday let.
Guest Review Rating Guidance Template
Would you like a template that you can include in your welcome book that subtly provides guests with some guidance on what different star ratings mean? Head to our templates to download this FREE PDF template.
PROPERTIES OF THE NEWSLETTER
We all love looking at and getting inspiration from other properties so hereās our top pick for this edition.
NO FOMO
Missed last weeks newsletter? Hereās one thing you might like.
How To Grow And Maintain Your Airbnb Listing Quality
In last weeks newsletter we delved into strategies and techniques you can use to grow and maintain the quality of your listing.
