Vered Schwarz is the President and COO of Guesty, an end-to-end property management software for short-term rentals.
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It’s been over one year since Covid-19 hugely impacted the world, global and local economies, and for many of us in travel and hospitality, our businesses.
Though the last 12 months have been unprecedented, an unexpected number of individuals still traveled during this unique period as short-term rentals went mainstream. This wasn’t surprising to me: Private rentals have less guest turnover and don’t require the crowded common areas that traditional hotels do. They also many times come equipped with longer-stay amenities that make traveling with family or while working more comfortable — from full kitchens to work stations to bigger closets to backyards.
With an increased user base of short-term rental converts and new consumer behavioral patterns, it’s crucial we ready ourselves and our businesses for the much-anticipated recovery of travel, shaping our strategies according to predictions grounded in logic, experience and an intimate understanding of the ecosystem.
1. Travel is normalizing, with hospitality professionals predicting a full recovery in 2022.
We recently surveyed over 500 industry professionals, including investors, travel tech suppliers, members of the travel industry, thought leaders and professional hosts and property management companies. Over half of respondents predicted 2022 to be the year of complete travel recovery.
Full normalization in less than a year is realistic, with vaccine distribution times varying worldwide. That said, it’s crucial that all players in the ecosystem — professional hosts on short-term rental sites, along with hotels — ready themselves for a surge in bookings now. Consumers are still traveling, with our recent data indicating that they are booking in droves for summer. In fact, the U.S. 2021 summer reservation volume (June, July and August) we’ve seen is 110% higher when compared to the booking volume we saw for summer in the states at this time last year.
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The coming phenomenon, which I like to refer to as revenge travel (the future surge in travel due to mass cabin fever caused by pandemic restrictions), will in my opinion be characterized by longer stays and further-from-home trips. People are planning on traveling longer, further and more smartly to make up for lost time and canceled celebrations.
To attract bookings now, hosts and hotels should implement flexible cancellation policies in which travelers can nix their reservation at the very last moment without a penalty fee given varying lockdowns and city restrictions. Policies like these make consumers more confident to book.
2. Short-term rental converts are here to stay.
The vast majority of those we surveyed (83.2%) believe travelers have been won over by the short-term rental industry and that traditional hotel stays will remain less popular even once the pandemic is behind us.
This increased user base of private rentals means that professional hosts worldwide should be prepped and ready for travelers’ high expectations of the private stay at a home, coupled with hotel-like amenities.
My suggestion: Before the busy season, professional hosts and short-term rental property management companies should take advantage of any downtime by upgrading their properties to suit such guests. This could include ensuring units encompass longer-stay amenities, such as full kitchens or bigger closets, and implementing tech tools that limit human contact, such as keyless entry solutions. This may even include upgrading WiFi throughout listings to ensure high-speed connections as work-from-home has evolved into work-from-any-home, as the lines of working and traveling are increasingly blurring with digital nomadism on the rise.
These types of amenities cater to the various travel personas we saw emerge from the pandemic — cityscapers (those driving one to four hours to stay outside of major metropolitan areas), life shoppers (those experimenting with living in new cities for one to three months) and digital nomads seeking connectivity in the great outdoors.
3. There will be a shift in hotel business models and legislation.
The majority of respondents suggested that hotel business models will shift: 60.4% believe hotels will increasingly incorporate alternative accommodation options into their business models.
Pre-pandemic, we already saw this happening. For example, Marriott announced its entrance into the rental space with its launch of Homes & Villas by Marriott International. This makes sense considering the total addressable market (TAM) for short-term rentals is an estimated $115 billion. And even airlines are cashing in on the promise of the future longevity of short-term rentals, with JetBlue reportedly planning debut rentals as one of its non-air offerings.
In addition, 65.2% of respondents believe regulations on short-term rentals will be adjusted. I believe this will move the industry to increased professionalization, creating more consistency and transparency. Such professionalism is welcome and makes sense considering the growing popularity of rentals, especially after they were largely the safer accommodation choice amid this crisis, with many short-term rental hosts across the globe housing frontline workers to ensure safety when separated from their families and provide them with a place to rest in between shifts.
The safety and privacy factor many sought out in private rentals during the darkest days of the pandemic really apply to all travelers. With that in mind, professional hosts and property management companies should be marketing the benefits of staying in private rentals in their listing titles and descriptions across the booking channels they distribute their properties on. Using words like remote, private, isolated and countryside, for example, can draw more eyes and result in stays booked. In addition, creating professional hospitality brands that reflect trust and consistency will resonate with potential guests.
A Bright Future
The hospitality industry is resilient, best showcased by the last year. It’s also clearly poised for growth thanks to the wide-spread pent-up demand for travel, whether domestic or international.
Though we all know travel will recover, the when and the how still largely remain question marks. For now, the best all parties can do is remain agile, follow smart data-driven insights and adapt to new guest expectations that will surely exist in a post-pandemic world.
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