Why most holiday homes underperform and what one Yamba operator is doing differently

In the Northern Rivers, holiday homes have become one of the most sought-after assets on the coast.

But according to Yamba-based operator Kristy McGrath, most of them aren’t performing anywhere near their potential.

“People assume if you own a good property in a strong location, the results will take care of themselves,” McGrath says.

“But what we see time and time again is that performance isn’t about the property. It’s about how it’s managed.”

McGrath is the founder of Pilot Hill, a holiday management business that has grown to support more than 100 homes across the Northern Rivers. Her approach is built on a simple idea: treat every property like a performance asset, not a listing.

It’s a mindset shaped long before she entered the property industry.

Built from the ground up

McGrath grew up renovating homes with her parents, spending weekends sanding, painting and watching them steadily move from a modest chamferboard house near Ipswich to an architectural home in Paddington.

“It was never about quick wins,” she says. “It was about buying well, improving what you had and making smart decisions over time.”

That thinking carried through into adulthood. Alongside her husband, she has built a multi-million-dollar portfolio spanning residential, commercial and rural property, while also running global service businesses and working in strategic marketing roles across industries and countries.

“It gave me a really clear understanding of performance,” she says. “Not just what something looks like, but what it actually delivers.”

The gap in the market

That perspective became more than theoretical when McGrath and her husband purchased a beachfront home in Yamba.

While living overseas, they entrusted its management to a local operator. The experience, she says, exposed a gap in the market.

“The home was beautiful. The location was incredible. But the way it was being managed didn’t reflect that,” she says.

“It wasn’t intentional. It wasn’t consistent. And the performance showed it.”

Pilot Hill and its holiday-maker focussed website ‘oceanstays.com.au’ was built in response.

Rather than operating as a traditional agency, the business focuses on what McGrath describes as “active management”, staying close to each property and continuously refining its performance.

That includes everything from pricing and positioning to guest experience and presentation.

“A lot of the industry still operates on a set-and-forget model,” she says. “But properties aren’t static. They need to be actively managed if you want them to perform.”

Why experience matters

One of the key drivers of performance, according to McGrath, is guest experience.

“Reviews are effectively your currency,” she says. “They influence where you sit in search results, how much guests are willing to pay and whether they come back.”

Pilot Hill’ portfolio consistently maintains review scores between 4.6 and 4.8 stars, with occupancy rates reported to sit between 9 and 45 per cent above local market averages.

But McGrath is quick to point out that these results don’t come from a single change.

“It’s the small details,” she says. “Presentation, communication, the way the home feels when someone walks in. Those things compound.”

She describes guest experience as a “profit multiplier”, with higher-quality stays leading to stronger reviews, increased demand and ultimately higher nightly rates.

Controlling the variables

As the business grew, McGrath identified another issue affecting owners’ returns: operational costs.

“Cleaning and laundry were two of the biggest variables,” she says. “They were expensive, inconsistent and completely outside the owner’s control.”

Her solution was to bring them in-house.

Coldstream House, the business’s cleaning and laundry arm, was established to deliver more consistent standards while reducing costs. It now supports both Pilot Hill properties and the broader community.

“It’s about controlling as many variables as possible,” she says. “Because performance isn’t just about what comes in. It’s about what you keep.”

A broader shift

McGrath believes the industry is beginning to shift, with more owners treating their holiday homes as long-term assets rather than passive income streams.

“There’s a growing awareness that these properties can do more,” she says. “But it requires a different approach.”

That thinking has recently expanded into property sales through Pilot Hill, where McGrath is applying the same strategy-led model to the selling process.

“Sales has similar challenges,” she says. “Too much focus on listings and not enough on positioning and strategy.”

Built on people

Despite the growth of the business, McGrath insists the focus has remained the same.

“It’s always been about people,” she says.

That includes local makers and service providers, who are integrated into the Pilot Hill experience, as well as the internal team.

“We’ve built a culture around supporting and empowering our staff,” she says. “Flexible work, strong systems and a genuine focus on helping people perform at their best.”

McGrath is also a sponsor of the Yamba Surf Life Saving Club and, alongside her husband and their three sons, is actively involved in the local Redmen Rugby community.

“You can’t build something meaningful in a place without being part of it,” she says.

Looking ahead

For McGrath, the focus isn’t on rapid expansion, but on maintaining standards.

“Growth only matters if you can maintain quality,” she says.

Her approach remains grounded in the same principle that started it all.

“Do it properly,” she says. “Not louder, not bigger. Just better.”