4 Major Industry Trends of the Short Term Rental Industry
4 Major Industry Trends of the Short Term Rental Industry
The Short Term Rental Industry is booming, and it isn’t looking like it is going to slow down anytime soon. 4 major industry trends have helped propel the industry rapidly; these include Technology, Competitive Marketplace, Evolving Property Managers, and Higher Expectations.
Technology has become the driving factor for the increase in available properties across the world. Without technology connecting billions of people at their fingertips, the travel industry wouldn’t be expanding like we see today.
In the past two decades, advancements have made it extremely simple to book vacation homes with instant book. Before this, you had to rely on a travel agent or call in to see if there were any available properties from a reservation agent. Meaning that you didn’t know what the property looked like, you would take the word of the agent and hope for the best. Now that we have the Internet, you can get what you desire and book your stay with just one little click of your mouse. More than two-thirds of travel accommodations around the world are booked through the Internet. This is good for property owners because the more bookings they receive, the more cash flow they take in.
Due to the increase in reservations, this also comes with a price that property owners haven’t had to think of before now. The price of free time. Owners free time was taken away by trying to accommodate guest, by getting them the keys when they arrived, making sure they knew the rules, going in person to fix any problems and the constant worry about your property being destroyed. Thankfully Smart Home devices emerged to provide solutions to these problems; some of them include:
- Smart Locks: Help with not having to be at every property to greet the guest with keys. This made it possible to lock and unlock the door through technology. Some locks you can simply whip out your cell phone and make sure the door is locked/unlocked. Others have a code you can type in on the door so that guests don’t need a key.
- Video Doorbell: This is a more personalized way to greet guests, instead of physically having to be at the property. This device allows you to be alerted when guests arrive and receive a real-time video with audio so that you can say welcome and give them any instructions needed.
- Noise Monitoring: After guests have arrived, you want to be able to make sure that your property is being cared for and that your guests are respectful to the neighbors. Having one of these devices can help you stop anything rowdy happening before it turns into a disaster. Property damage can usually be prevented if you solve the noise situation. This allows for more stress-free managing of your properties.
These are just a few technological advancements that have contributed to the ever-increasing Short Term Rental Industry. If you have a problem, there is probably a smart home device that can fix it.
Technology has allowed for the evolution of Short Term Rental competitors within the marketplace. This industry is still very young, so there is a lot of room for competitors to still get their foot in the door. With a projected market growth rate around 7% for 2019, this creates a $57-$58 billion revenue stream.
We all know some of the major companies that dominate this field currently, but there are over 115,000 short term rentals companies that operate all over the world. Hotel chains are even announcing their short term rental programs, in hopes to stay evolving in the vacation stay industry. Properties are now being listed on multiple, competing sites to get their properties booked as many times as possible. How will these companies attract business and differentiate themselves from other platforms? They will have to continue to do research to stay one step ahead.
This leaves a lot of room for potential renters to choose their place of stay, but renters are going to want the service and responsiveness as hotels. It is going to take more time for property managers of Short Term Rentals to stay competitive with the all the other alternatives that are being offered.
Evolving Property Managers
Now that the industry has advanced, property managers are able oversee more properties than ever before! Being a property manager can now be considered a career, instead of a side job. The more rentals that they can manage the more money they have flowing into their pockets. It is becoming an extremely lucrative job considering the continuously growing industry.
With the smart devices available, property managers are now able to do everything online or from their phone. Giving them free time to be able to focus on other things, like family. Millennials are to thank for the growing property managers businesses since they are the generation with the travel bug inside them. Around $1.4 trillion is projected for Millennials to spend on travel in 2019.
Property Managers are now going to have to try and differentiate themselves from their competition. They are going to have to bring a sort of hospitality aspect that hotels provide along with trendy houses that are appealing to the eye. With the popularization of social media and blogs, people are going to want to stay somewhere they can post about. Property managers are in charge of keeping up with making their properties relevant in the eyes of the public. Good publicity means everything for a property. Who would want to stay somewhere that always has bad reviews and is outdated? Plus, if someone enjoyed their accommodations, they are more likely to share with their friends/followers. A way that property managers can do this is by having guests give their honest feedback about what they do and don’t like about the property.
Overall, property managers are being given the tools to easily manage large quantities of property, while spending time on the critical things, like increase renter expectations.
Technology has also created this bar that has been set on rental expectations. Now that renters can see what they are going to be getting through the internet, they are more selective. If they have an amazing experience at another short term rental, then they are going to expect that from their next destination. People want something that is going to feel like being at home, while also having the premium services that hotels provide. They want to be “wowed." Generation Z and Millennials want Short Term Rentals that are "Instagram Worthy," they want to make it appear like they are having the most wonderful vacation with pictures that are going to make people wish they stayed with them.
They want to have the ability to cook at home, do their laundry, have privacy from neighbors all while staying in a convenient location based on their vacation itinerary. They want to know that if there is a problem, it can be fixed immediately. This is one thing for property managers to consider, location is a critical deciding factor. If the property is located closest to the main attractions within the area, then they will be willing to pay the higher price. If properties aren't close, they are going to have to offer more significant incentives and better quality to steer in potential renters.
Properties are going to have to be continually changing with the trends to be able to attract potential renters, make it unique while also keeping to the vibe of the environment. When you stay at a beach house, you are looking for somewhere that has beach house decor in the different types of styles that are popular (minimalistic, modern, chic, Boho, etc.). You don't want to be renting a beach house that has a farmhouse or hunting decor. Renters want to get the whole experience of their vacation from the time they step out of the car to the time they shut the door.
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