A solid business plan separates successful holiday lets from expensive mistakes. Here is how to write one that genuinely informs your investment and guides your growth.
Most people who invest in a holiday let do so because they fall in love with a property, a location, or the idea of generating income from a beautiful place. Very few start with a business plan.
That instinct is understandable — but it is also one of the primary reasons holiday let investments underperform or fail to meet their owners' expectations. A business plan forces you to test your assumptions before you spend money, understand your market, model your finances honestly, and build an operational framework that can be executed.
This guide walks you through every component of a holiday let business plan and provides a structure you can adapt for your own property.
Disclaimer: This article is for informational purposes only and does not constitute professional financial, legal, or tax advice. Consult a qualified professional for your specific circumstances.
A holiday let is a business. Even if you are only letting a single property part-time, you are generating commercial income, incurring business expenses, and operating in a competitive marketplace. Treating it as such — with a proper plan — pays dividends in several ways:
The executive summary is written last but placed first. It provides a one-page overview of the business:
Keep this to one page. It should be compelling and honest — the detailed evidence comes in the sections that follow.
Describe the property in detail:
Assess the location from a holiday let perspective:
Be specific about who you are targeting:
Understanding your target guest drives decisions about amenities, pricing, marketing channels, and policies.
This is the core of your business plan and requires the most rigour.
Build your revenue model from the following inputs:
1. Available nights per year: Start with 365 and subtract any nights you plan to use the property personally or block out for maintenance.
2. Realistic occupancy rate: Research comparable properties in your market. For a well-run coastal property in England, 60%–75% annual occupancy is achievable; 80%+ is exceptional. Be conservative — new properties typically take 12–18 months to reach mature occupancy levels.
3. Average nightly rate: Again, research comparable properties. Factor in seasonal pricing — summer rates may be double or triple winter rates. Build a simple weekly pricing calendar with at least three seasonal tiers.
4. Other income: Cleaning fees (usually passed through), pet fees, early check-in/late check-out charges.
Gross Annual Income Example:
| Period | Weeks | Avg. Nightly Rate | Occupancy | Revenue |
|---|---|---|---|---|
| Peak (Jul–Aug) | 8 | £350 | 90% | £17,640 |
| High (Easter, half-terms) | 8 | £280 | 85% | £13,328 |
| Shoulder (Spring/Autumn) | 20 | £200 | 65% | £18,200 |
| Low (Jan–Feb, Nov) | 8 | £140 | 40% | £3,136 |
| Total | 44 | £52,304 |
List all costs:
Fixed annual costs:
Variable costs (percentage of revenue or per booking):
Irregular/one-off costs:
Once you have revenue and costs, produce a simple three-year P&L:
Include a sensitivity analysis — what happens if occupancy is 10% lower than projected? What if average rates fall by 15%? Your investment should survive reasonable downside scenarios.
Decide how you will manage the property:
Outline how guests will be handled at each stage:
List the regulatory requirements you will need to meet:
Which OTAs and booking platforms will you list on? Airbnb, Vrbo, Booking.com, and Sykes Cottages are the main UK channels. Each has different fee structures and audience demographics.
A direct booking website reduces reliance on OTAs and their commission fees. Budget for a simple property website and consider how you will drive direct traffic — email newsletters to past guests, social media, and local marketing.
Professional photography is one of the highest-return investments a holiday let owner can make. Budget for it in your startup costs.
Every business plan should include an honest assessment of risks:
| Risk | Likelihood | Impact | Mitigation |
|---|---|---|---|
| Lower than expected occupancy | Medium | High | Conservative projections; flexible pricing |
| Regulatory change (licensing) | Medium | Medium | Monitor local council announcements |
| Property damage by guests | Low | High | Damage deposits; insurance; guest vetting |
| Interest rate increase | Low | Medium | Stress-test at +2%; fix rate if possible |
| New local competition | Medium | Medium | Differentiate; invest in quality |
Once your business plan is written and your holiday let is operational, the next step is running it efficiently. LetPilot brings together bookings, owner statements, guest communications, and task management in one platform — giving you the operational infrastructure to deliver on your business plan. Try LetPilot free at letpilot.co — no credit card required.