3 Tips to Be More Competitive in Short Term Rentals in 2019
3 Tips to Be More Competitive in Short Term Rentals in 2019
Hi there! My name’s Tyler and I’m an Account Executive here at NoiseAware. I like exploring the outdoors of my native Colorado (go Buffs!), connecting with people, and above all - helping people to Rent Responsibly.
My main focus at NoiseAware is connecting responsible property owners and other interested parties with the tools they need to keep their properties and their neighborhoods safe.
Most importantly, I help our larger enterprise clients, such as people who own chains of apartment complexes and single-family units find a good solution for their noise monitoring needs.
In my convos with property managers and owners, one thing keeps coming up over and over again: they ask me what it will take for them to remain competitive in the growing short-term rental (or STR, for short)/vacation rental market. Some of them ask if they should advertise on home renting websites, or go independent and run a series of ads?
While everyone’s needs are different, and I don’t have a one-size-fits-all answer, I do believe that I can offer some guidance that can help steer people in the right direction. Here are 3 major things that you can do to stay competitive. I personally came up with these after my time in the industry, talking with so many people in the industry, and of course, industry statistics (that’s a lot of industry!)
1. The vacation rental market is growing at a fast clip
You picked a great time to be part of the STR vacation rental industry. Whether you’re an old veteran or a newcomer, there’s opportunity and growth to be had, which is a great thing.
What is known as “alternative accommodations” (not so alternative anymore!) is a 150 billion dollar market worldwide (and that’s just an estimate!). As of 2018, there were 23,000 vacation rental companies in the US.
In 2015, Expedia purchased Orbitz and HomeAway for a combined 5.5 billion dollars, representing a sea change. Major players are getting involved in online travel agencies (OTAs, for short) because they realize the importance of this growing space. This means more money is pouring into the industry from various sources, creating more growth.
All of these factors are fueled by some major factors such as:
- Demographic shift
- Expansion in technological resources and capacity
- Post-recessionary environment
The millennial demographic is helping to drive this change, due to wanting something “a little off the beaten path” and due to lower prices for STR accommodations compared to a hotel.
We live in an amazing time, with more technology available, companies are using it to leverage their real estate portfolios which includes, yes, STRs.
Finally, we are experiencing a long run of relative financial prosperity (that’s a bull market for all you econ guys). This means more people are spending on consumer, discretionary purchases (like travel) which directly affects the industry.
How you can take advantage of this: If you’re still debating whether or not to jump into the market, or if you have a second home that’s just “sitting there”, I seriously hope this convinces you to give it a try.
If you’re in the market and you’re experiencing limited success, just keep plugging away. You may need to change your approach or how you manage your property in general. We have tons of guides on them such as 7 Tips to Running a Successful Airbnb Service.
2. Those who offer unique experiences win
Here’s a rhetorical question for you: during your last visit to an STR, why did you stay there?
If you answered “because of the experience, duh!”, you’re not alone. Most people who stay in a short term rental first booked it because it offered a different experience than just staying at a standard hotel.
Remember when I mentioned millennials like STRs because they wanted something a little “off the beaten path”? This is exactly it.
How do you offer a unique experience?
How you can take advantage of this: Well, do you own a second home in an interesting place? If so, use that as your primary STR “residence”. If you live in New England, but you have another home in New Mexico, then that’s a way you can offer a great experience.
If your primary residence is in another “boring old city”, how can you bring the city into your home? We also have a guide on that too: Airbnb, Selling Experiences.
3. Avoid regulatory mishaps
The STR vacation rental industry is in an interesting place right now. The industry as a whole is big enough to be considered a “nuisance” but not big enough to be taken seriously.
It’s like that awkward adolescent period when you’re going through puberty and you “don’t wanna grow up” but don’t want to be a kid either.
Anyway, a lot of cities, neighborhoods, and homeowners associations (HOA, for short) don’t know how to handle short term rentals popping up all over the place.
Some places have knee-jerk reactions and just rule to “shut it down”, others wait for a bit for one bad apple to spoil the bunch (then “shut it down”), some communities do absolutely nothing.
In my opinion, based on what I’ve seen, heard, and experienced - all of these are the wrong reaction.
There’s nothing inherently wrong with STRs and I’m not saying this because I’m biased. The incidents that make the news are few and far between, but they stand out because they’re so extraordinary (just like freak athletes or weird acts of nature).
Most people who own vacation rental properties are ordinary, hard-working folks just like you and I who want to earn a little extra on the side.
Some regulatory agencies don’t see it that way or don’t know the industry well enough to say otherwise.
How you can take advantage of this: You can become an advocate for the STR industry by talking to your local city or county board, HOA, or other people in your neighborhood. It only takes one person to help create a change and you can be that catalyst.
As a little shameless plug here, you can install our NoiseAware indoor and outdoor sensors on your property. We’ve found that installing NoiseAware acts as an insurance policy on your property, so you’re the first one to know about noise instead of the police.
Many of our clients have testified that it has saved them on more than one occasion and that our impact on their lives and their businesses is invaluable.
Lastly, if you are in the market of buying a property or a second property - screen the landlord or HOA about their philosophy regarding STRs. If they are indifferent or even negative towards them, you may want to consider getting a property where the environment is more friendly.
4. Use smart-home tech
Using smart-home tech for STRs is becoming not only essential but almost expected. With the increasing wave of technology available in our hands, retailers like Amazon, Ring, and Ultraloq are offering voice-activated thermostats, keyless entry, camera-based doorbells, and all other kinds of technology I can’t keep up with.
Smart-home tech will not only help your guests have a better experience, but they’ll help you automate a lot of tasks as well.
How you can take advantage of this: I know Black Friday has come and passed, but here’s a good article that we wrote advertising a lot of this home-tech. Even though some of the prices are different, the technology remains the same. You’ll also see a bunch of other items you can spruce up your property with as well. Check it out:
Well, that’s it. Four super solid tips and trends you can take advantage of so you can be a step ahead in this growing space. If you have other friends who are on the fence about stepping into the market or are active in it, share this article with them. You never know who it can help.
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