From location to amenities, the short-term rental market is influenced by a multitude of factors on a daily basis.
But if you look at the market as a whole, short-term rentals are truly thriving right now, largely because these accommodations are managing to serve several needs at once. While your property will have its own individual quirks, we’ll take you behind the larger trends of today so you’re that more prepared for tomorrow.
Short-Term Rentals and Airbnb
Airbnb is the most famous example of the success of the short-term rental market. There are 6 million listings on Airbnb throughout the world, making the company one of the biggest disruptors in any industry. Their success has sparked similar technology platforms that allow property owners to connect with travelers. Airbnb is now just behind Marriott International in terms of units. With 2 million people staying in an Airbnb every night, the demand is booming.
And while the market’s success is not necessarily going to bring the hotel industry to a crashing halt, we’ve really only scratched the surface when it comes to the potential of the market. The driving forces behind Airbnb show why travellers will continue to choose short-term rentals over hotels.
1. It’s Filling a Niche
While short-term rentals have always been available to people, they were largely confined to beaches, mountains, or resorts. Hotels used to be the most common accommodations by far, but it’s clear that travelers wanted more than many hotels could offer. The new market is creating a nichefor travelers who don’t want to stay at a big box hotel chain. These travelers would much prefer the opportunity to meet and connect with locals on a different level. Staying in an authentic accommodation is a big part of that.
While Airbnb listings can’t necessarily offer a rooftop bar or 24/7 room service, they tend to offer a one-on-one experience for the guests. Instead of having to wait in line only to be given a spiel about the sponsored business activities in the area, guests get customized, honest advice from someone who knows the area. Solo travelers love that they have someone to talk to who won’t try to sell them on anything.
2. It’s Cost-Effective
Short-term rental prices are not only more negotiable than hotel prices, but they also tend to be cheaper on the whole. In the crowded city of Los Angeles, the average rate for a hotel was reported to be around $180 in 2019.
These high rates may explain why Airbnb has seen that people stay longer in their properties than hotel guests do. When you consider the average stay is four nights long in LA, it’s easy to see that guests are getting tremendous value out of their time in the city. Not only are guests able to save money on a short-term rental over a hotel, they can also save by cooking their own meals in the rental’s kitchen.
3. The Technology Is Off the Charts
The biggest reason why short-term rentals have really hit their stride is due to the available technology. After all, without an easy-to-access platform, verified reviews, and stellar photos, it would be difficult for owners to hit a quota that will make their efforts worth the time. Another major barrier was finding 24/7 help to manage a property.
Airbnb property management services was an incredibly demanding job, one that required workers to be ready to mobilize in a split-second. From a broken pipe to a lost house key, it’s not always easy to put out the fires that spring up when a property is in constant use. But there are more ways today to automate communication, organize listings, and create workable schedules that appeal to everyone. Owners, guests, and property managers alike have access to the information and tools they need to streamline the experience.
The short-term rental market depends on everything from legislation to target demographics to timing. You already know that demand is going to be higher on a three-day weekend than on a random weekday in February. What you might not know is how your demand will rise and fall throughout the next few years. While there’s no use in trying to predict the future, there are solid reasons to believe that short-term rentals aren’t going anywhere. Owners and property managers who provide their guests with a good experience will continue to attract quality guests year after year.