What is a Holiday Lettings Business?



The Insider @ Houst
Last updated on
November 2, 2022

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What is a Holiday Lettings Business?

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Have you thought about setting up a holiday let but are still deciding whether to start? Or you're probably wondering, "how profitable is the holiday lettings business?" Here’s everything you need to know.

The hospitality industry is one of the biggest global industries, boasting a market size of 3,953 billion US dollars in 2021 and 4,502.83 billion US dollars in 2022. This figure is expected to rise to about 6,000 billion US dollars in 2026.

Due to COVID, these 2021 and 2022 figures were less than the industry's market size before the Covid pandemic. As the world resets to normal, there are indications that the market size could get bigger.

For example, in the UK, the economic output of the hospitality sector was £59.3 billion in 2019. Although it noted a 42% and 21% decline in 2020 and 2021, Oxford Economics predicts that the industry will be the fastest-growing part of the UK economy in the next five years. Moreover, bookings are currently up to 35% compared to pre-pandemic levels, according to Sykes Staycation Index.

If you want to tap into this robust industry, starting a holiday lettings business is one of the easiest ways to go about it. Here, we will guide you through what a holiday let business entails and how to start one.

Table of Contents

What is a Holiday Lettings Business?

A holiday lettings business involves renting short-let accommodations to travellers and tourists. There is an emphasis on the term "short-let" because these accommodations are equipped to cater to the visitors' needs for only a short period. The short time ranges from a few days to a few weeks.

As a holiday lettings business owner, the maintenance, daily operation, availability of amenities, risk management, and security of the property and its occupants are your responsibilities.

On a happier note, you don't have to bear the full weight of managing the risks of letting your property. For more information on how to protect your investment and manage the risks associated with short-term lets, read our blog on holiday let insurance and cover.

Also, if you want to avoid the hassle of keeping track of guests, cleaning, and making sure they have everything they need, take advantage of Houst's guest management calendar and housekeeping team.

Holiday let business models don't vary too much, so if you're wondering how to run a holiday let, it can be pretty straight forward with the right support.

Starting a Holiday Let Business

With the definition of out of the way, let us look into how to start the holiday let business. We have mentioned that the holiday lettings business is an easy way to get a sizable share of the robust hospitality industry. However, like every profitable venture, it's not without its challenges.

Starting a Holiday Let Business

The holiday lettings business is multifaceted. This means that you have to consider a lot of things in the process of setting up a holiday let. We have broken down the process as easy as possible in this guide. Below are the steps involved in starting a holiday let business;

Getting a Holiday Home

The holiday home is one of the essential aspects of starting a holiday home business. There are some businesses which use a tactic called “rental arbitrage”, but we won’t cover that in this article.

If you have a second home, you can use it for a holiday home. Otherwise, you will need to rent or mortgage another property. Before renting or mortgaging a new property, you need to consider certain factors to determine its suitability and potential yield as a holiday home. The factors include;


The location is the leading consideration when choosing or buying a property for a holiday let. This is because your property's location will affect your ability to attract guests and how much you can charge for stays. Thus, finding one with tourist activity is of paramount importance.

Having said this, you should also remember that your guests are human and would appreciate some quietness in their accommodation. Therefore, the ideal location for a holiday home should be close to tourist sites but not too close to the city's noise and hustle and bustle.

Getting a Holiday Home

If you want to run a short-term accommodation like Airbnb, the property should be close enough to amenities such as shops and restaurants so that you can offer convenience for your guests.

Some holiday let businesses do well running remote locations, but this is a niche, so it’s best to look for something which ticks the most requested boxes.

With this information and your ideal guests in mind, you can narrow down the areas where you would consider getting a property for your holiday let business.

Ideal Customers

To run a successful holiday let business, your holiday home needs to appeal to your target customers. Think about what kind of people you want to attract to your property – families, couples or groups of friends. Think about what they might want from their visit and what they may need from you as the owner.

For example, If you'd like to cater for families or large groups of guests looking for adventure, an excellent choice would be a spacious house in a seaside town. These locations would make your stay popular due to its proximity to sandy beaches, seaside restaurants and fishing spots.

If your ideal guests are high-end clients who enjoy luxury travel and are happy to pay handsomely for it, you'll want to find a holiday home in a premier location. That might mean renting a property near a well-known tourist attraction or resort town that elite people like to visit on holidays.

Suppose your target audience is more price sensitive. In that case, you can rent a property in an area that isn't quite as expensive but still has good public transport links and amenities nearby (coffee shops or restaurants).

Type of Property

It is also essential to consider the type of property you want when running a holiday let business — the more rooms in the property, the higher your chances of earning more money.

Thus, you could choose a multifamily property that allows you to house more than one tourist at a time or a single-unit property where you can only accommodate one tourist at a time.

For more insight on mortgages for a house let business, read through our blog which covers holiday let mortgages.

Preparing the Property for Business

Once you have acquired the property, the next line of action is putting the right things in place to make it an ideal holiday home.

You need to understand that the holiday lettings business is competitive as many people provide the same accommodation services that you provide. Therefore, you should strive to implement strategies that can make your guests prefer your property over your competitors.

To start with, you need exquisite interior decor for the holiday home. You need not break the bank, but it should be unique and can stand the test of time. The furniture pieces that go into the property should also be of good quality. It also does not hurt to have extra features and amenities in the property to benefit the tourists patronising the holiday let business.

Amenities such as parking spaces, Wi-Fi, hot bathtubs, gardens and usable lawns, and the likes could be why a tourist would enjoy their stay on your property and recommend it to friends and family.

Preparing the Property for Business

You should also look into making arrangements for pets. Hoo's research reveals that the lack of pet-friendly accommodation is one of the reasons that hinder guests from having the "pawfect" staycation.  

83% of pet owners in the UK feel guilty about leaving their dogs behind, and 56% do not mind travelling with them. Hence, making provisions for pets would make your place more appealing to visitors.

Regulations, Laws and Permits

Despite being a holiday home, your property is not exempted from some property rules and regulations that guide the purchase and ownership of properties in the UK. If you decide to turn your home into a holiday let, you would need to apply for a "change of use" permit.

You may also need to obtain a hotel licence to run your business. In any case, you should check in with your local council to avoid breaching any rules. These will ensure that your holiday lettings business runs smoothly without any inference from the government.


In this blog, we have simplified the process of starting a holiday rental business by explaining what the business entails and how to go about starting it.

Keep in mind that Houst is a professional hosting management company. We help our hosts optimise their listings so they'd earn the highest rental income on their properties without putting in the extra effort. For more information, contact us today.

Remember that people going on holiday in the UK will want:

  • Dog-friendly stays
  • A contactable property manager
  • Potentially a hot tub
  • Furnished holiday lettings
  • Maybe a holiday letting agency to give them peace of mind

FAQs About Holiday Lettings Business

Is a Holiday Let Business a Good Idea?

Yes! Holiday letting business is a good idea because several factors make it profitable. Firstly, the number of people travelling during the holidays, especially in this post-Covid period, is increasing. Hence, you can start a house let business and earn from accommodating tourists and visitors.

The second reason is that plenty of platforms out there that allow you to easily list and market a property you own or rent for short-term rentals. Moreso, you can start a short-term rental with no money.

The most important thing is to know how to manage your guests and the holiday rental property properly.

How do I Start a Holiday Let Business?

There are three processes involved in starting a holiday let business. They are:

1. Getting a home: You can use your second home if you have one, but in the absence of that, you need to acquire or rent a property. When getting a house let property, you should consider;

  • Location
  • Ideal customers
  • Type of property

2. Preparing the property: It's important that you finish and set up your house in a way that would appeal to your target customers. This will go a long way in determining whether you'd have returning guests or bad reviews after their visit.  

3. Obtaining the necessary permits: Speak to an expert in your local area to find out what the necessary permits are that you must get before setting up a holiday let. Rules vary significantly in different areas, so don’t get caught out!

Other businesses that you might start with a property include a self storage business, which you can streamline with a self storage software.

What are the Legal Requirements for Holiday Lets?

For your property to be acknowledged as a holiday let, it must be well-furnished, equipped, and available for commercial letting for 210 days a year.

The exact legal requirements vary, but you should always have holiday let insurance, ensure the property is safe and follows proper health and safety regulations, plus ensure you have a permit for the desired area.

The Insider @ Houst

The Insider @ Houst

The Insider team at Houst is dedicated to providing up-to-date and relevant information on short-term rentals. If you have hosting inquiries, please write to us at expert@houst.com. For guest inquiries, reach out at guest@houst.com. We are here to help you navigate the world of short lets and look forward to assisting you with your needs.

The Insider @ Houst

The Insider @ Houst

The Insider team at Houst is dedicated to providing up-to-date and relevant information on short-term rentals. If you have hosting inquiries, please write to us at expert@houst.com. For guest inquiries, reach out at guest@houst.com. We are here to help you navigate the world of short lets and look forward to assisting you with your needs.

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