Emerging Short Term Rental Market Trends
The short term rental market is struggling to rise from the devastating effects of the Covid-19 pandemic. From the crippling travel restrictions that had hosts go without business for months to the new measures geared to stemming the spread of the virus, the sector has much to do if it will eventually get back on its feet. With the travel business slowly coming back, a few trends have emerged and might form part of the future.
1. Cleanliness and Hygiene
Washing of hands and sanitizing has become part of the norm in this era and the short term rental market is one where this is mainly being practiced. As early as April 2020, Airbnb had already developed cleanliness and sanitation guidelines for hosts to try and keep off the emerging threat. Other industry players have followed suit and it is now common practice to have rooms, utensils, appliances and anything in the rooms sanitized before any new guest can take residence. Hosts are required to allow a 24 hours period between guests to give room for the stringent sanitization measures to be in place. Guests now prefer a well sanitized living space where there is a low risk of contracting diseases.
2. Lowering rates
Before 2020, short term rentals were fully booked on regular basis and guests paid top dollar in many locations. That is no more. With hushed travel and depressed business environment, demand for short term rentals has reduced significantly and the only option left to hosts has been to lower daily rates. Many hosts have recorded growth in bookings when they lowered rates in 2020.
3. Longer term rentals
‘Stay home’ is one of the rallying calls used in 2020 to stop people from moving out to crowded places. This has created opportunities for long term rentals for those who were always on the move. In the heat of the lockdowns, some hosts opted to convert their short term rentals into monthly and seasonal rental designs to attract the home staying clientele that they would not reach with the short term rentals.
4. Demand for Remote areas
Crowded cities are becoming less attractive as people look for areas with social distancing. 2020 has seen rising demand for short term rentals in remote places now being referred to as ‘quarantine pads’. There are places where people are turning to when opting out of Covid-19infested crowded cities and hot spots. Short term rentals in mountain towns, lakeside getaways and beachside destinations have had relatively lower Covid-19 incidences than major towns. Short term rentals investors will need to keep up with statistical data to help guide their investment decisions.
In conclusion, the direction short term rentals take going forward will mainly be driven by research and analytics. Change is evident in all dimensions including personal choices, considerations and preferences. New paradigms are emerging and it will be interesting to watch how investors respond. At the end of the day, new winners and losers will emerge as new business models take shape.