Vacation Rental Industry Growth in Sight, But Challenges Remain
Property managers and industry professionals say opportunities for vacation rental industry growth are surfacing but cashing in on them requires unconventional approaches. Be resilient and adapt quickly, yet proceed with caution, they advise.
While weathering the pandemic, the short-stay and vacation rental industry has realized the need for a gentle mix of compassion and innovation. HOST 2020 in November enabled owners, operators, and entrepreneurs to regroup, rebuild, and recover with the big underlying message that they are in this together.
The annual virtual conference featured honest conversations about how the industry can stay competitive and emerge from the pandemic while sustaining growth.
Said one panelist: “The industry is excitedly looking forward, but very conscious that the direction has changed. Companies must be flexible with old practices, have a keen eye on expenses, and recognize, understand and adapt to changing traveler habits.”
The industry is now dealing with drops in international and domestic reservations, edgy owners who are bailing out or changing management teams, and general lethargy in tourism.
Travelers are staying away from urban areas and seeking destinations that offer more space, next to mountains or lakes. Longer stays at domestic locations are favored, and last-minute bookings are the norm as travelers manage their own uncertainties.
And all of this is happening as the low season dawns and potential lockdowns loom large.
Adapting to new ways to grow
Lisa Chen, Vice President of Global Lodging Connectivity & Solutions at Expedia, said in the opening keynote that the industry is learning to listen to property managers, have trust, focus on partnerships and work together.
Striving for personal, human connections are ever important.
The pandemic has been a reset for vacation rental industry growth, ushering in fresh discussions, and new opportunities that weren’t on the radar several months ago.
Buildium CEO Chris Litster said a silver lining is reflected in the company’s recently released “2021 State of the Property Management Industry Report,” which indicates that a majority of property managers expect to see growth in the next two years.
To get there, they are being more strategic and viewing their portfolios differently. Properties that require intense management for a small return on investment are being reconsidered, some even turned loose. Vacation rental homes with growth opportunities are being embraced more.
“We’ve seen an uptick in the number of property managers actually talking about pruning properties, so they can focus on those other parts of the portfolio where they know they can get additional growth,” he said.
Direct bookings driving vacation rental industry growth
The big challenge for owners and operators is standing out from competitors and getting the small amount of business that’s out there. It’s all about being one step ahead of the competition and anticipating what travelers seek, then marketing to them specifically, said Rafael Kooukkoullis, a Kigo Account Management team member.
Attracting direct bookings has become more meaningful.
“It’s ‘how do I get to the guests and what’s going to make the difference’,” said Kooukkoullis.
Panelists discussed how technology can play a big role in helping operators establish and maintain a brand that makes a difference.
Sonia Chennoufi, who heads Partnership at Kigo, said branding creates trust, and property operators can only establish a brand if they know their ideal customer, which involves getting to know clients and being able to see the industry from a 360-degree view. Operators can do this, she said, by leaning on vacation rental software to run operations and create a better customer experience.
“The property management system allows you to automate much of the operational aspect of your business,” she said. “This gives you the time and resources to focus on the guest experience, which is super-important for branding.”
Cleaning and compassion boost conversions
Boosting conversion begins with cleaning and organizing your house. Travelers are desperate to travel but safety matters. Cleaning procedures should be properly outlined on websites – photos of cleaning products or staff wearing masks while sanitizing accommodations make a big statement.
Another area of consensus is that compassion and flexibility are necessary when handling cancelation requests and payments and that responding quickly builds confidence with guests.
In a roundtable discussion on how to leverage property management systems for online marketing, hosted by Kigo European head of sales Geovani Martins, panelists said going forward property managers should seize the opportunity to build relationships between owners, clients, and guests.
Hospitality providers must recognize that they have two clients – the owner and the guest – and each has different needs. Both are dealing with stress, and being sympathetic and valuing the relationship will pay dividends in the future.
With 2021 on the horizon, new challenges for the vacation rental industry growth await. Stakeholders agree that now is the time to be innovative and compassionate and to be armed with the right tools to move forward.
Kigo enables vacation rental property managers to adjust to changing markets while managing, marketing, and delivering a complete vacation rental experience.