Just a few years ago, vacation rentals sites mostly consisted of individuals who were looking to rent out an extra bedroom or a second home. Today, the vacation rental industry is well-established on these platforms with a plethora of third-party services available to support growing businesses. As 2019 gets underway, it’s clear that the industry is changing fast.
So what does the future of vacation rentals look like? Here are the top 5 vacation rental industry trends for 2019 to watch out for.
Today, vacation rental industry platforms such as Airbnb, VRBO, and HomeAway have millions of listings combined. With a vacation rental industry that is worth more than $100 billion, the stakes for hosts are higher than ever when it comes to making money from their rental properties. As property management agencies join these platforms to compete with individual property owners, the competition among hosts has only increased.
As a result, marketing has become one of the top vacation rental market trends for 2019 as hosts look for ways to maximize their bookings. Hosts are investing in SEO services, professional photography and videography services, as well as, branding services to help their properties stand out.
In addition, Airbnb consultancies are springing up to help guide experienced hosts on how to create a successful vacation rental business. As a result, marketing for the vacation rental industry is becoming an established vertical of its own that is only expected to grow in the coming years.
Although Airbnb just launched its Experiences services just one year ago, it is on track to be profitable by the end of 2019, according to the company. The rapid growth of Experiences demonstrates that vacation rental guests don’t only want accommodations, they want services as well.
Experiences and additional services are actively being promoted to hosts on Airbnb as the platform seeks out new ways to deliver superior customer experiences to its guests. According to Skift, 67% of U.S. Airbnb users reported having booked an Experience on the platform in the past year. Furthermore, there are also a number of vacation rental platforms that are already integrated with travel websites. This creates a one-stop shop for consumers who are looking for tours and other experiences while searching for accommodations.
By providing additional services to guests, hosts can create and exceed the experiences that guests have come to expect as the standard of staying with a hotel. These services provide value upgrades and additional sources of revenue for hosts which is why they’re one of the most popular vacation rental trends for 2019 and beyond.
Vacation rental hosts are busier than ever and are increasingly managing multiple properties. As a result, there are now a host of third-party tools available to help them in their property management efforts. Hosts are using software now more than ever to manage routine tasks such as organizing property maintenance services, communication with guests, and scheduling bookings.
In 2019, we can also expect to see more hosts investing in tools that utilize automation. Dynamic pricing, chatbots, smart home systems that are specifically designed for use with vacation rental platforms are all evidence of how automation software is now common for hosts in the vacation rental industry.
As the vacation rental market matures, guests are increasingly using these platforms to locate group accommodations. A HomeAway trends report for 2019 found that castle and estate demand rose by nearly 55% and 25% respectively in the past 12% months. The reason for the shift is the result of millennials wanting to travel with their growing families. In addition, renting large homes lowers the cost of the accommodations which appeals to budget-conscious travelers.
However, traveling in groups isn’t only for millennials. In fact, the report also found that Gen Z is most likely to travel with friends (35%) over traveling alone or with immediate family. In addition, 81% of Gen Z travelers reported that they’ve already stayed in a vacation home, condo, or cabin at some point.
These days, unoccupied properties can essentially be transformed into hotels with very little effort. As a result, VRMB predicts that by the year 2020 vacation rentals will topple hotels.
This prediction comes as a result of the fact that many municipalities are currently trying to stop the effects of consumers turning to vacation rentals for accommodations by enacting laws against short-term rentals. These protections are being put in place to protect the interests of the hotel industry, as well as, to ensure that homeowners don’t circumvent existing housing and zoning regularly.
Despite these efforts, Airbnb already accounts for 9% of the total lodging units in the 10 largest U.S. markets, according to CBRE, which means that there is significant interest in vacation rental platforms from consumers.
The report also found that the average number of Airbnb units continues to double year over year whereas hotel inventory has only increased by 1.1%. Finally, a study by Consumerist found that only 11% of people have used a vacation rental platform to book accommodations and almost half are not familiar with them at all. This means that vacation rental industry platforms have only just gotten started and have the potential to overtake hotels, which are not seeing this type of growth currently.
These are the main trends to look out for in 2019 regarding the vacation rental industry. Overall, vacation rentals remain extremely profitable for hosts around the world. However, going forward property investors may need to adjust their strategies to account for increased competition by adopting third-party tools and adding new services to their accommodations. While hosts should prepare to adjust their vacation rental business plans going into 2020, there is still plenty of money to be made in a rapidly growing industry.