Vacation Rental Industry Answering Old Questions in New Ways During COVID-19
by: Tim Blackwell
All eyes are on how the vacation rental industry embraces opportunities in 2021. COVID-19’s impact has cast a glaring spotlight on managers, who are charged with keeping portfolios afloat and positioning them to remain steady in uncertain conditions.
The short-stay rental industry has been impacted the most within the rental housing industry because travel habits are changing. Property managers quickly learned to pivot as the pandemic emerged, quarantines persisted and the economy tanked. Through it all, they’ve had to find that delicate balance of appeasing owners while providing guests with an unforgettable experience.
And indeed, property managers are embracing the opportunity, according to Buildium’s recently released “2021 State of the Property Management Industry” Survey.
As the pandemic unfolded, respondents maintained the belief that 2020 “represents a fork in the road, where the value of strategic, tech-embracing property managers and investors will become clearer than ever.” According to the survey, they see “a burgeoning opportunity to gain market share through an approach that they described as both aggressive and empathetic—and they know that the right technology will make all the difference.”
Broadening portfolios to position for growth
In a recent fireside chat at HOST 2020 with Kigo General Manager Daniel Bowen, Buildium CEO Chris Litster said property managers are tackling changes typical of an economic fallout with unconventional approaches. Some are not only weathering the downturn but expect to grow over the next two years.
“It’s come down to two familiar business objectives within the property management space,” he said. “That’s the idea of growing their portfolio and also diversifying and adding to their various revenue streams.”
Property managers are positioning themselves for growth by adding new properties or clients while pruning areas where they’re wasting energy.
“They’re showing a willingness to adapt and to try things that really hadn’t been part of their plans before, certainly not before the pandemic hit,” Litster said.
Property managers more dependent on technology
The vacation rental industry has seen a rise in the number of U.S. property managers who are planning to invest in properties and become owners. The trend makes sense since they spend much of their time consulting clients and acting as strategists when owners invest their money.
A core function of property managers is to think about how they can attract new owners. Technology is playing a role.
“There are lots of lead generating services available now to help match property managers with owners looking for help,” Litster said. “And now more than ever professional property management systems are in great demand.”
He noted that the survey showed double-digit growth over the past year in all of the core functions property managers provide, such as collecting money, working with residents and handling maintenance and upkeep. Many managers are tackling these functions with property management technology.
Diversifying revenue while marketing their experience
Because now is not a good time to raise rents and fees, property managers are diversifying revenue sources. Enabling multiple revenue streams broadens the portfolio’s ability to meet financial obligations and grow.
Property managers are finding they can market and monetize their expertise, Litster said. Demand has increased in accounting, as well as in financial areas such as advising in property sales and investment.
Some owners are getting real estate licenses so they can buy and sell properties, or perhaps manage other rental property types such as single-family, multifamily and student.
“We are seeing a lot of people who specialize in a certain kind of property who are now starting to broaden their service offerings so they can take on new property types and generate more mixed-portfolio business,” Litster said.
Property managers are also offering more online services, which are essential as guests expect more safety through zero-touch experiences. Tech solutions are counted on not just to create more business efficiencies but also to enable online lease applications, virtual showings, virtual property inspections and more.
Integrated property tech key to vacation rental industry future
Litster says integrated property management technology will be the launch pad for the vacation rental industry as it emerges from the pandemic with an eye on growth. The best opportunities will be for those properties that employ a digital management system with a 360-degree view of the business.
“This kind of insight can only happen when all of your solutions can integrate and share data, show you the right information at the right time, and help you chart your course for your future,” Litster said.
The Kigo Vacation Rental Software is the one platform you need to increase visibility, bookings and revenue.