If you’re a host like us, then you have probably asked this question at some point. To theme or not to theme? While many hosts rave about themed properties, claiming they’re the golden ticket to rave reviews, higher bookings, and greater revenue, skeptics argue that the costs and complexities overshadow the benefits.
So which is it? And how do you know for your unique situation?
In this article we’ll give you the eight crucial questions you must answer before deciding to whether to theme your properties or not, and will break down how pioneers in this space (specifically of extreme-theming), Loma Homes, dove into the realm of theming starting in 2019, and their results from doing so.
Dive into our journey, findings, and hard-earned insights (even juicy revenue data) as we unravel the truth behind themed vacation rentals, and help you understand the risks and rewards.
Table of Contents
- Who’s Loma Homes and Why Should You Care?
- Revenue Results From Extreme-Theming
- The Eight Essential Questions
- How to go about theming (if you’ve answered the essential questions)
Who’s Loma Homes and Why Should You Care?
Loma Homes was started by Jeff Brown, Kyle Barton, and Bryndee Barton. They’re a mix of data smarts, creative ideas, and home fixing know-how.
Jeff used to work in data analytics for eCommerce companies but wanted a different way to earn. He learned about real estate and discovered Airbnb return possibilities. Kyle and Bryndee? They were a dynamic duo flipping homes across the country. When these three teamed up, things took off.
They began with a heavily-themed rental in Joshua Tree, California. Through some extensive theming, they made it more than just a place to stay; they made it feel like Joshua Tree itself. It was a hit. Then, using Jeff’s data analysis skills and research, they saw a massive opportunity in Orlando, a city famous for family getaways and theme parks. They pulled the trigger, purchased a large home, and created “12 Parsecs”, an extreme-themed rental that feels like a space adventure, with fog machines, galactic living areas, bedrooms that transport guests onto new planets, and amenities to satisfy (see the 12 Parsecs listing HERE).
Twelve Parsecs quickly went viral (to the tune of 12 million views on Facebook alone) on social media channels and publications around the country, and quickly showed high returns (north of 3X what the comparable properties were getting). The founders quickly realized how lucrative extreme-theming could be, then replicated the process and created Wizards Way (80 million + views), Raptor Retreat (3 million + views), and Once Upon a Castle (2 million + views) in the following couple years.
But it wasn’t always smooth. In Orlando, they made a fairy tale home, but so did many others, causing revenue to fall short. They found out it’s key to be different, especially when lots of people have the same idea. This, as well as other relative failures, helped the founders create a criteria to decide on when to theme, and how, leading to their Nine Essential Questions.
With more than 16 special-themed homes now, the founders of Loma Homes have learned their fair share. They’ve had success and many mistakes. They know what works for vacation rentals, and they’re excited to share that knowledge so hosts don’t make many of the same mistakes they did, and can profit off their wins.
Initial Revenue Results
Our themed properties at Loma Homes have not only attracted attention but have also significantly outperformed revenue expectations. In their first years, Twelve Parsecs brought in an impressive 2.7 times the competitive average in revenues. Meanwhile, Wizards Way soared even higher, earning a staggering 3.9 times more than its competitors. Raptor Retreat wasn’t far behind, generating revenues at 2.2 times the competitive benchmark. Although Once Upon a Castle faced stiffer competition, it still managed to exceed the competitive average by 1.3 times, underlining our themes consistent ability to outperform in varied market conditions and a cautionary tale about ensuring all 8 questions are answered below.
The Eight Crucial Questions
- What is the competition like in your area? Is it high? You probably need to be themed to stand out and grab bookings from the other players in your market. Low? Might not make the difference to revenue you are looking for.
- Have you done your due diligence on your theme’s / niche’s TAM (total addressable market)? Extreme theming is an investment and a theme that’s too niche might have limited appeal. Without thorough market research about the demand a certain theme might fill, there’s a risk of spending more than what might be recouped in increased bookings or rental rates. Ensure the theme aligns with the target audience’s interests. What seems trendy or popular for a short time might not have lasting appeal, potentially reducing your property’s long-term booking rates.
- How does your theme fit with the location and culture of your property? A theme that is relevant and respectful to the local context can enhance the guest’s experience and appreciation of the place. For example, a tropical theme might work well for a beach house, but not for a cabin in the woods. A theme that is insensitive or inappropriate to the local culture might offend or alienate potential guests.You probably shouldn’t invest 200k in a Disney extreme-themed rental in the backwoods of Ohio.
- Will you be spending more than the potential equity upside of the home? That’s super risky and if your investment does not give you the expected return, you could loose money.
- Are you prioritizing the basics? While an intricate theme can be captivating, guests still prioritize comfort. A bed that looks like a spaceship is intriguing, but if it isn’t comfortable, the guest’s experience is compromised. Always prioritize the basics of comfort, safety, and functionality.
- Will your theme be “professional”? Can you afford to make the theming appear professional and impressive? If not, your “theme” will likely look cheesy, and trust us, your listing will bomb (in the bad sort of way).
- Do you understand and have a plan for the extra maintenance work and costs?: Themed properties often come with unique fixtures, furnishings, amenities, artwork, and tech, which might require specialized maintenance. Ensure you’re prepared for the additional upkeep costs and efforts.
- How will you market your theme to potential guests? A theme can be a great way to attract attention and differentiate your property from others, but you need to communicate it effectively. You should use clear and catchy titles, descriptions, and photos that showcase your theme on your listing platforms. You should also consider creating a website, social media accounts, or blog posts that highlight your theme and provide more information and stories about it.
So You’ve Decided to Theme… What’s next?
4 Step Theming Roadmap
1. Identify Target Revenue and Budget (20% rule)
You know you need to theme your property to get good returns, but if you don’t know how ACTUALLY much you need to make (exact revenue goals and forecasts), you might as well quit while you’re ahead and before throwing your hard-earned money into the proverbial renovation and upgrade fire pit.
Here’s how: Take the potential revenue of the property divided by the cost of the home plus any renovations (potential revenue / cost of home + cost of renovations). If your resulting number is 15% or higher and you aren’t using a management company for your listing, then you know it’s a good investment. If you will be utilizing a management company for your listing, then the number will need to be 20% or higher to get good returns.
2. Identify Needed Amenities and Renovations
Once you have identified your profitable property and renovation budget, you now need to identify which amenities will give you the highest ROI, and make your listing’s maximally competitive. We use tools like AirDNA and PriceLabs to uncover the most important amenities (given by data) to add to the budget.
3. Find Theming Contractors
Next you need to do extensive research about the available contractors and artists in your area. Renovation contractors are usually hot or cold, meaning, either they work typically on schedule, within budget parameters, and are easy to work with, or, they are very lax on budgets, go way over deadlines (like months and months over) and, couldn’t care less about the success of the jobs.
If you can, first reach out to friends or family who have contractor relationships for referrals. If you do not have any leads, then proceed to do your Google due diligence. If you imagine murals and themed beds then you can search things like “foam artists in Colorado”, “Muralists near me”, or “specialty artists”. You could even search things like “haunted home builders” or “Disney artists” for more niche projects.
Then, call, call, call, and talk to as many as possible. Be picky. Be careful.
4. Project Management
This is when the rubber hits the road. You’ve forecasted, planned, and picked your contractors. Now the nitty gritty begins. Time to negotiate your contractor agreements and scopes of work (one of the most important parts of this whole process).
Then you must to finalize every single piece of artwork kitchenware, amenities, bedding, cleaning materials, etc. This can be anywhere from the hundreds of items, to thousands depending on the extent of the theming and the size of the homes.
Lastly, you need to manage all projects to completion, and ensure your budgets are maintained within reasonable parameters.
Or… Have Loma Homes do The Theming for You
Loma Homes is more than just a brand; it’s a theming revolution that has redefined vacation rentals. With a trail of successful, revenue-spinning themed homes, our expertise is highly sought-after by hosts around the world.
For a while, our hands were full crafting our own standout properties. But in response to overwhelming demand and in collaboration with the highly successful STR company, Revedy, we’ve launched our turnkey theming service as of August 2023.
Here’s the best part: We’re now inviting a select few to be part of this game-changing experience. Four exclusive slots are currently up for grabs.
Ready to transform your vacation property into a sought-after destination? Dive into the world of Loma Homes’ theming excellence HERE and let’s make your rental vision come to life.