As the vacation rental industry enters a brand new decade, with brand new challenges and opportunities, many people will be trying to peek into the future and figure out exactly where this sector is heading (we promise no jokes about “2020 vision”…apart from this one of course). So what vacation rental industry trends are on the horizon? Well, first let’s take a look back at the major rental industry topics of the previous decade.
How has the vacation rental industry changed?
The 2010s saw some of the biggest changes to the vacation rental industry in a very long time. In the previous decade they were the scrappy new underdog, but Airbnb are now firmly established as a major player in the sector. We saw household names in the vacation industry such as Booking.com and Tripadvisor placing more focus on short-term rentals than ever before. And of course we have seen the emergence of specialist niche competitors (hello Misterb&b and Plum Guide!) all hoping to establish themselves in the minds (and wallets) of travellers and rental managers.
With such a dynamic industry it’s hard to know what’s going to happen next. The events of the previous decade are likely to continue to dominate the conversation as we enter the 2020s. The collapse of Thomas Cook has already caused major ripples across the industry, and we’re yet to see how Brexit could change travel and tourism going forward.
Will sustainable vacation industry trends continue?
Climate change and sustainability were big concerns in the 2010s and this is only likely to increase in attention in the coming decade. We’ll almost certainly see changes in how and where we choose to travel, with eco concerns already pushing some guests away from air travel and in favour of more environmentally-friendly methods of transport and destinations.
However, it remains to be seen whether a more carbon-conscious approach to vacations will become the norm. The increasing prevalence of cheap flights and accommodation greatly increased opportunities for short-term rentals in newer and emerging markets such as South-East Asia and Latin America in the 2010s. How these markets mature over the next few years is going to be incredibly interesting.
Rental industry regulation is a hot topic
Speaking of maturity, changes to the vacation rental industry in recent years have led to intervention by local authorities and governments, many of whom were initially slow to adapt to the impact of the fast-paced sector. We’re seeing more and more regulations, laws, taxes and policies coming in, all of which are likely to play an increasing role going forward. Adapting to this is going to be one of the major challenges for rental managers in this new decade.
Our Vacation Rental Industry Report 2020
We wanted to get an insight into how real rental managers are feeling about this incredibly exciting time for the vacation rental industry, so we carried out a survey touching on everything from marketing to guest management, from environmental concerns to technological innovations. A big thank you to everyone who participated! We’re delighted to share the results with you now. We’ve put together a sneak preview of some of our key findings, but if you’d like to read the full report you can download it for FREE right here. We hope you find it as useful, interesting and informative as we did, and that it gives you some insight into the future of your industry. Here’s to a great decade!
Is the vacation rental industry getting better or worse?
Revenue in the vacation rental industry continues to grow, and the majority of property managers are feeling the benefits. Just over 60% said that the vacation rental industry is more profitable than it used to be, and a healthy 70% of respondents agree that now is a good time to be a vacation rental manager. However, there remain 30% who disagree. Of course, these figures mean that one can comfortably say that significantly more property managers think things are pretty good than don’t. The vacation rental industry overall looks healthy and positive for most managers. Still, it’s important not to disregard the 30% that aren’t happy – their opinion may be equally valid!
So despite the continued growth of the sector, as well as ongoing technological improvements, some people don’t think that now is a good time to be a property manager. Why could that be? Well, it’s worth noting that almost 93% of rental managers feel that the industry is more competitive than it used to be. Competition, particularly from lower-priced competitors, was a recurring theme when respondents discussed their major challenges (more on that in a bit). It seems that the increasing competition may have led to some property managers seeing their profit margins being squeezed as they try to retain a foothold in an increasingly crowded market.
Property managers agree that the vacation rental industry has gotten more competitive over the last few years
What are the biggest challenges in the vacation rental industry today?
The biggest challenge identified by far was Regulations. Respondents expressed a lot of con- fusion and frustration with industry regulations. Some felt that the constant changes were hard to keep up with, whereas many felt the regulations themselves were often confusing.
Another common topic cited by property managers as a challenge was that of Sales Channels & Commission. Many discussed how commissions could be expensive and confusing whereas others felt that managing the channels themselves was often the most confusing part.
With individual channels often confusing, both to use and in terms of fees, it’s no wonder that property managers are increasingly using Channel Managers offered by services such as Your.Rentals to simplify their business management.
- Regulations 24.4% 24.4%
- Sales Channels & Commission 21.5% 21.5%
- Marketing 15.2% 15.2%
- Competition 12% 12%
- Other 10.6% 10.6%
- Guests 10.3% 10.3%
- Seasonality 6% 6%
What are the other trends and topics?
There’s no space to cover everything in this article, but here are few additional nuggets of info that we found especially interesting:
- Less than half of all property managers have their own website
- Of those that do, less than a quarter can receive online payments for bookings
- Three times more property managers use Facebook for their business than the next most popular social media platform
Our full report is extensive, featuring almost 20 pages packed with insight about property management today. It discusses the environmental concerns, of rental managers, analysis of marketing trends and social media usage by industry professionals, property managers’ love of technology, their passion for hosting and much much more.