How to Manage a Holiday Let: A Complete Guide

If you are going to put your property on the holiday let market and you are wondering how to manage a tourist apartment, do not worry: you do not need a master’s degree in revenue management or to be a legal expert.

All you need is:

• A method that stops you spending all your time dealing with guests
• The ability to set prices so the property is booked throughout the year
• A basic understanding of legislation and tax so you do not run into problems with the authorities
• To treat your guests like a true host who genuinely cares about them
• And to know how to stand out on the main holiday let platforms (Airbnb, Booking, Vrbo and so on)

To make that easier, we have created this 100% practical guide with the advice and management approach that has worked for us after managing more than 600 holiday rental properties.

Here it is…

Understand the Market and Your Competition Before Setting Your Holiday Let Price

Imagine you were selling a second-hand bike: you would not look at what people are charging at the other end of the country, would you?

You would first look for people selling bikes like yours in your local area.

The same applies to your property: start by analysing five holiday let listings in your area. Ideally, choose properties with the same number of bedrooms and the same type of accommodation, whether that is a villa, a rural house or a flat in an urban area.

To do this, it is as simple as going on Airbnb and looking at each property’s prices:

• How rates vary between weekdays and weekends
• How prices rise over bank holidays
• And what happens in low season

For now, just note down this information and calculate an average so you have a reference point.

For example:

• EUR 50/night on weekdays
• EUR 60/night at weekends
• EUR 80/night over bank holidays
• EUR 45/night in low season

EUR 50 + EUR 60 + EUR 80 + EUR 45 = EUR 235

Then divide it by 4 (because there are 4 rates) and you get the average: EUR 235 / 4 = EUR 58.75.

Repeat the exercise with at least 5 holiday lets and you will have a benchmark for prices and properties similar to yours in your area.

But be careful. This is not about copying your neighbour. You also need to audit your own property so you know what its strengths and weaknesses are, how far you can push the price and, above all, which type of guest is most profitable for you to attract.

For example:

• Is your property in a quieter, more peaceful area, or is there nightlife nearby?
• Do you have a terrace for barbecues?
• Does it have sea views?
• Is the decor high-quality or distinctive?
• Does it have a lift?
• Does it have parking?

Ask yourself every question you think is relevant and spend some time answering them.

Why should you do this exercise? Because it will help you avoid 3 very expensive mistakes:

1. Not knowing which guest you want to attract (not every guest is right for you)
2. Going cheap ‘just in case’ (it happens more often than you might think)
3. Setting a high price without the right narrative and then getting no bookings

But do not worry, because we are going to look at point number 1 next…

Always Attract the Most Profitable GueImagine you were selling a second-hand bike: you would not look at what people are charging at the other end of the country, would you?

You would first look for people selling bikes like yours in your local area.

The same applies to your property: start by analysing five holiday let listings in your area. Ideally, choose properties with the same number of bedrooms and the same type of accommodation, whether that is a villa, a rural house or a flat in an urban area.

To do this, it is as simple as going on Airbnb and looking at each property’s prices:

• How rates vary between weekdays and weekends
• How prices rise over bank holidays
• And what happens in low season

For now, just note down this information and calculate an average so you have a reference point.

For example:

• EUR 50/night on weekdays
• EUR 60/night at weekends
• EUR 80/night over bank holidays
• EUR 45/night in low season

EUR 50 + EUR 60 + EUR 80 + EUR 45 = EUR 235

Then divide it by 4 (because there are 4 rates) and you get the average: EUR 235 / 4 = EUR 58.75.

Repeat the exercise with at least 5 holiday lets and you will have a benchmark for prices and properties similar to yours in your area.

But be careful. This is not about copying your neighbour. You also need to audit your own property so you know what its strengths and weaknesses are, how far you can push the price and, above all, which type of guest is most profitable for you to attract.

For example:

• Is your property in a quieter, more peaceful area, or is there nightlife nearby?
• Do you have a terrace for barbecues?
• Does it have sea views?
• Is the decor high-quality or distinctive?
• Does it have a lift?
• Does it have parking?

Ask yourself every question you think is relevant and spend some time answering them.

Why should you do this exercise? Because it will help you avoid 3 very expensive mistakes:

1. Not knowing which guest you want to attract (not every guest is right for you)
2. Going cheap ‘just in case’ (it happens more often than you might think)
3. Setting a high price without the right narrative and then getting no bookings

But do not worry, because we are going to look at point number 1 next…That is what you need to find out.

Always Attract the Most Profitable Guest

If someone asks you what kind of guest you want to attract, your answer cannot be: ‘anyone’.

Because trying to appeal to everyone is impossible.

So choose one or two main audiences at most:

• Families
• Couples
• Remote workers
• Digital nomads

Then adapt everything around that choice: photos, copy, equipment and rules.

For example:

If you want to attract remote workers: add a large desk, a good office chair and mention your Wi-Fi speed.

If you are targeting families: buy a cot and a high chair, and explain that there is plenty of wardrobe space.

You see the idea. Consistency and specialisation will set you apart, attract the right profile and help you earn good reviews.

But you also need to understand how profitable that guest is so you do not lose money. To do that, make a simple calculation that includes:

• Expected monthly income
• Direct costs (cleaning, laundry, small replacements, utilities)
• Platform commissions (around 15%)

Example:

If you want to earn EUR 1,000/month before tax, you need to generate EUR 1,400 gross.

Here is the breakdown:

• EUR 1,400 x 0.85 (Airbnb commission) = EUR 1,190
• EUR 1,190 – EUR 150 in expenses = EUR 1,040.
• EUR 1,040 divided by 30 nights = EUR 34/night.

Now ask yourself:

• Is your guest willing to pay that amount?
• Are those prices being paid in your area?
• Do you have a lot of competition?

That is what you need to find out.

What You Need to Know About Legislation and Tax

Licences and Permits You Need

To offer your property as holiday accommodation, the autonomous regions in Spain will require you to register it through a responsible declaration and, in some cases, obtain a licence depending on the municipality where it is located.

To do this, you will need:

• A certificate of habitability
• Complaints forms
• Civil liability insurance
• Registration in the traveller register (to notify the police and Guardia Civil within a maximum of 24 hours).

Once you have completed these steps and, if everything goes well, you will be assigned a registration number and can start operating.

But…

Before starting any procedure, ask your community of owners whether properties in the building are allowed to be let as holiday accommodation, as some buildings have limits or surcharges for tourist properties.

Local Regulations and Tax

In addition to the above, each city can add its own rules:

• Areas where holiday lets are allowed and areas where they are not
• Limits on the number of holiday lets per building
• Specific taxes or charges…

Spain has more than 8,000 municipalities, so check the specific rules that apply.

As for the taxes you will pay, everything depends on the model you choose:

1. If you do not offer ‘hotel-style’ services, you will declare the income in your personal income tax as rental income and will normally not have to pay VAT or IGIC.
2. If you provide services like a hotel would, it may be considered a business activity and you would have to pay VAT (10%) or IGIC (7%).

Finally, if there is a tourist tax, it must be settled as established by the autonomous region or local council.

Prepare the Property So Your Photos Stand Out

Furnish and Decorate Coherently Without Making Huge Investments

As we mentioned earlier, depending on the type of property, where it is located and the type of guest you want to attract, you will need different decoration and furnishing choices.

In any case, the idea is for them to meet guests’ real needs and stand out in the photos, which should always be professional and high-quality.

As a general rule, we recommend:

• Giving each room a local touch: this could be a large print of the neighbourhood or a piece of craftwork that connects the property with its surroundings.
• Investing in rest areas: use a good mattress and provide enough wardrobe space so guests feel at home.
• Using washable materials in high-use areas: sofa covers, resistant paint and so on.

And if you would like more specific information, we invite you to read the guide to furnishing a property for letting that we published recently.

Equip the Property with the Essentials and Impress with the Details

This is not just about decorating or making the space aesthetically appealing (that is taken as read). You also need a series of basic amenities.

Your list should include:

• Fibre Wi-Fi
• Climate control appropriate for your climate throughout the year
• A functional kitchen with enough kitchenware (ideally double the property’s capacity)
• Two sets of linen per bed and guest
• Safety equipment: fire extinguisher, smoke detector (and CO detector if there is gas) and first aid kit.

We also recommend leaving a clear manual to hand with information about access, rules, what to do in emergencies and how to dispose of rubbish.

And if you really want to make a difference, think about what you would like to find if you were the guest:

• An extension lead on the desk?
• Several bedside sockets for charging a phone?
• A cot or high chair if you were travelling with children?
• A local neighbourhood guide?

These are the things that later generate very positive reviews and, as you can see, they do not have to be particularly expensive.

How to Manage Communication During Bookings

Booking management is another critical point, because you need to build trust with guests and make them feel that you empathise with them and want their stay to be perfect.

Think about it: many people (probably you included) work hard all year to enjoy a week on holiday, and all they want is to have a pleasant experience they can remember later.

For this reason, you need to make sure expectations are managed properly. To do this, we recommend taking a few measures:

1. Define a cancellation policy by season: it can be more flexible in quieter months and firmer in high season, but the important thing is that it is written down so there is no confusion.
2. Prepare a message sequence as a template:
   1. A friendly confirmation when they book
   2. Instructions 48-72 hours beforehand
   3. A reminder on arrival day with a plan B if the code fails
   4. A ‘is everything OK?’ message halfway through the stay in case they need anything
   5. And, at the end, a thank-you message asking for a review.

The texts do not need to be perfect. They just need to sound natural, arrive on time and, above all, be written within the platform where you advertise.

Finally, in a second phase, if you want to professionalise management, we suggest starting to use a PMS and a Channel Manager (a tool that connects your listings across several platforms and synchronises calendars and prices) if you are advertising the same property on several platforms.

Why? Because you cannot afford to receive two bookings for the same date, and that is difficult to manage without the right software. So, if you do not yet have those tools, at least block dates manually in a calendar such as iCal or Google Calendar to avoid problems.

And if you want to go one step further, at Home2Book we offer owners a mobile app with PMS and Channel Manager features to avoid those booking overlaps…

You cannot imagine the peace of mind this gives them.

Choose the Right Platforms and Stand Out on Them

When owners ask us about this, we always say the same thing: you do not need to be ‘everywhere’. You need to be where your guests are looking.

In broad terms, this is what you need to know:

• Airbnb is an excellent gateway into the world of holiday lets because it has a huge volume of visits and anyone searching for this type of accommodation ends up there.
• Booking.com is the other major reference in the sector: it generates a lot of trust and also makes you visible to guests who are searching for hotels. In addition, most travellers already have an account on the platform.
• Vrbo, for its part, is a more specialised portal and works especially well with families and English-speaking markets.

Once you choose the platforms where you want to be present, the next thing to work on is your listings.

What should you know about that?

You need to control 3 elements to stand out: cover image, title and description.

• For the cover image: use the best possible photos, with natural light and showing the property exactly as guests will find it.
• For the title: mention three things that genuinely matter (sunny terrace, next to the old town, 600 Mb Wi-Fi).
• For the description: be 100% honest and explain what the property has and does not have (3rd floor with no lift, street with nightlife). Do not hide the negatives, because this will save you a lot of trouble and your reviews will be better.

How to Communicate Effectively with Guests

Guest communication is a game of expectations, so do not promise something you cannot deliver and simply follow these good practices:

• Be fast (ideally under an hour during reasonable hours), clear and human.
• Explain everything as if you were telling a friend:
  • How to access the property
  • Where to park
  • How rubbish disposal works
  • What building rules apply…
• And please manage everything within the platform, because if there is a dispute, that traceability will protect you.

Communication does not need to be complicated. A few correct, direct lines are enough.

For example:

• Before arrival: ‘Check-in from 15:00. Here is the guide with access and Wi-Fi details. If you need anything, message me here.’
• If there is an issue: ‘Sorry for the inconvenience. A technician will be there in under 2 hours and I will update you in this chat.’
• After the stay: ‘Thank you for coming. If you enjoyed the experience, your review could help other travellers.’

How to Earn 5 Stars for Cleaning and Maintenance

Most reviews are won or lost on two fronts: cleaning and maintenance. So if there is one area where you should make the greatest effort, it is this one.

On the one hand, we recommend working with a detailed checklist that covers every high-touch point guests may use: door handles, switches, remote controls, bath, toilet and so on.

On the other hand, we suggest doing a quick quality check with one photo per room before each check-in.

Finally, set aside a monthly slot for preventive checks: air-conditioning filters, limescale on taps and boilers, bathroom and kitchen seals, light bulbs and remote-control batteries, smoke detectors…

Also, if you want to be a top host, always keep an emergency box to hand (light bulbs, batteries, plunger, fuses, spare set of sheets/towels).

It may not be very glamorous, but you will see your reputation rise.

Service Coordination and Managing the Unexpected

Unexpected issues will arise; that is obvious. Over the years, it is impossible for there not to be problems, but the important thing is to be prepared (to avoid them where possible) and diligent in solving them when they appear.

In our experience, these are the typical situations you need to consider:

• Keys not working: this is every owner’s classic headache, but it can be solved with a smart lock or a well-placed lockbox. You should also always have a plan B, such as a support person or an emergency mobile number guests can call if they arrive late at night.
• Noise or neighbour complaints: the important thing here is to define how to act. For example, the first warning is cordial, on follow-up we raise the tone and talk about consequences, and if the problem persists we escalate as far as necessary, including to the police.

For extra security, we also recommend keeping a list of trusted suppliers on your phone (locksmith, plumber, electrician, urgent cleaning) and agreeing a reasonable response time with them in case you need them.

How to Offer Guests a Memorable Experience

The first idea we want to share is that you do not need huge investments to create what marketers call the ‘wow effect’.

In fact, do you know what we have seen really makes a difference?

• A simple welcome pack: water or a bottle of wine, a small local detail and a guide with your genuine favourite places
• A comfortable bed, enough darkness and quiet at night (where possible).
• Flexibility with early check-in or late check-out when the calendar allows
• And responding to every review: thanking guests for good ones and, in the less positive reviews, explaining what you did and what you will improve. Because future guests read that public conversation and, quite literally, it decides bookings.

Do this and you will see your guests thank you for it and your platform reviews improve.

How to Optimise Income Through Dynamic Pricing

In one of the earlier sections, we explained how to calculate the average price in your area and, if you remember, we saw that prices can rise or fall depending on demand.

That is exactly what is known as dynamic pricing, and it is something you should start applying as soon as possible.

What do we recommend in this case?

• Set a minimum number of nights:
  • This could be 2 or 3 at weekends
  • And perhaps 1 or 2 during quieter months so you can capture short breaks
• Avoid gaps between bookings by adjusting arrivals and departures
• Raise prices when there are events and bank holidays, or when your calendar is almost full
• Lower prices, without being aggressive, if you have last-minute gaps

If this seems like it would require quite a lot of your time, there are revenue management tools that help automate the whole process, although they are fairly technical and we recommend delegating it to a specialist.

What is clear is that ‘one price for the whole year’ never works, because that way you will not keep the property consistently booked and, worse still, your profitability will be lower.

And that is not what you want, is it?

Do You Need Help Managing Your Holiday Let?

We know all these details can feel overwhelming at first and that you probably want to earn passive income from your property rather than spend most of your time:

• Dealing with guests
• Handing over keys
• Washing sheets and towels
• Fixing damage
• Adjusting prices so the property is always booked…

That is why we want to offer you our help and experience. At Home2Book, we specialise in holiday let management and manage more than 600 properties under this model.

We have professionals specialising in customer service, revenue management and marketing to help keep your property booked.

We also take care of cleaning, key handover and even repairs so you do not have to worry about anything.

So if you are wondering who you can trust to manage holiday lets to the highest standard, contact us through this form and we will be happy to help with anything you need.