Looking Ahead at Vacation Rental Management in 2021
By: Tim Blackwell
Last year wasn’t as bad as most thought it would be for vacation rental management after COVID-19 arrived. The industry endured for the most part and is poised for a rebound in 2021 as steps are being taken to emerge from the pandemic.
In 2020, professionally managed vacation rentals had a decent year, reports VRMIntel, citing Key Data research. Average daily rates, revenue per property and adjusted paid occupancy improved in 2020 over 2019.
In early summer travel began to return, in some places even at high rates as travelers rushed to book last-minute trips. They opted for drive-to, leisure destination and whole-home vacation rentals, typically preferring remote locations over urban areas. Travelers ages 25-34 were most likely to stay in short-term and vacation rentals, compared to those 35-44 who stayed in hotels.
With vaccine distribution now in full force, the prospects for a full reopening of the U.S. vacation rental industry are brighter. And even though it may be quite a while before travel returns to pre-pandemic levels, property managers can look to the upcoming vacation season with a degree of optimism.
This year will no doubt be transformational for vacation rental companies. Most travelers won’t be swayed any time soon by great airfare offerings, triple points for hotel stays and other incentives to landmark destinations. They will seek more isolated short-term rentals where they can feel safer.
Whether travelers stay longer at destinations than they have in the past is a topic for discussion. Since the pandemic unfolded, talk has abounded that travelers are leveraging the ability to work and learn remotely to stay a day or two longer.
But Jason Sprenkle, CEO of Kay Data, points out that there really hasn’t been that much change. Data suggests that the first six months of booking for 2021 is in line with 2019. In some areas of the country, average length of stay has risen – some ski markets have seen a bump already this year.
The good news is that when folks are traveling, they aren’t cutting corners on their stays.
Direct bookings opening opportunities
Changing travel habits are opening opportunities for increasing the visibility of properties. Effective branding is essential to attract travelers who are choosing to avoid the big channel managers and seek a more personal booking experience directly with properties.
The winds are already changing.
VRMintel reports that an increasing number of travelers migrated toward direct bookings in 2020 rather than working with traditional channel managers. And the revenue difference is significant: the average rental revenue per direct reservation was $1,813 for direct bookings compared to $1,505 for Vrbo and $941 for Airbnb.
The data supports last year’s advice from vacation rental industry leaders that property managers can stand out in the crowd by building relationships directly with travelers. A key benefit of direct bookings on a property’s website is that the traveler connects to the brand without the channel manager coming in between them.
VRMintel’s Amy Hinote notes that guests who are familiar with a destination already know where they want to stay, which opens opportunities for local management companies to make the difference by establish strong branding emphasizing their advantages.
Leveraging tech, ops in vacation rental management
As 2021 unfolds, operators should get their houses in order and strive for operational efficiency as well as an exceptional guest experience. Industry professionals say technology and operational efficiencies will set apart successful properties from those that fail to look ahead.
Jessica Gillingham, director of Abode PR, explains in a guest blog for the Vacation Rental Management Association that 2021 is the Year of Operations. She says some technology-enabled property managers are good at operations and “now sell this as a white-labeled service to other property managers and asset owners.”
Gillingham notes that many property managers are using the challenges of the past year as a catalyst to reimagine how they run their businesses.
“They were forced to examine where the inefficiencies lie, and to refocus on their processes and operational management,” she writes. “The trend has been to double down on this in order to secure businesses.”
Enhancing the guest experience makes a big difference
Properties should offer and market a safe, worry-free experience and a strong sense of security to entice guests to book. Operators should employ efficient operational practices that ensure seamless, low-touch processes from check-in to check-out.
PointCentral President Sean Miller says operators can enhance the guest experience by doing little things, like updating welcome guides to highlight safe area attractions and businesses, upgrading HVAC filters to catch germs and reinforcing COVID-19 safety and cleaning guidelines.
In a VRMA blog, he takes it a step farther and says promoting keyless entry assures guests that they can check in and check out without close interaction with property staff. Also, he advocates encouraging guests to reach out at any time and making it possible by multiple methods, including email, text, phone, and chat.
The outlook for vacation rental management is beginning to clear. Property managers and owners who can effectively navigate the changing travel landscape stand to gain. And understanding travel trends while taking advantage of resources available to accommodate them will make a dramatic difference.
Learn more about how the vacation and short-term rental industries are navigating COVID-19, and how to manage, market and deliver a complete vacation rental experience, at Kigo.net.