Although COVID-19 has wrought havoc on the travel industry as a whole, there have been a few unique outcomes in the real estate space, one being: short-term rentals have gone mainstream. And it’s not just because of Airbnb’s recent IPO.
The main reason: with consumers still travelling (especially domestically), private rentals rather than traditional hotels have become the optimal accommodation choice throughout the past year as they boast less guest turnover and no crowded common areas — such as lobbies and elevators. In addition, our data shows extended stay reservations of two weeks or longer increased 2.5X during COVID in 2020 compared to what we saw in 2019. And with private homes many times encompassing longer-stay amenities like full kitchens, bigger closets and backyards, they make extended bookings more comfortable for guests.
This increased user base has not only resulted in home sharing entrepreneurs in more remote locations outperforming their revenue projections in the last year, it’s also disrupted the real estate space; according to Redfin, demand for vacation rental homes increased by 85% in the last year, shining a light on just how profitable investing in them can be.
The rental ecosystem looks much different than it did a year ago. Today, catering to new travel personas that have emerged, chock-full of new expectations that blur the line of where they live, work and play. As such, there’s never been a better time than the present to invest in building out a vacation rental portfolio — especially if you are considering investing in properties in desert, mountain or beach destinations.
Here are two travel personas that will increasingly look to book vacation rentals in 2021.
No. 1: Life Shoppers
The ability to work remotely has enabled individuals to consider living elsewhere, especially outside of major metropolitan cities that were once the epicenters of a plethora of job opportunities. It has acted as the catalyst to individuals breaking their traditional one-year leases to test drive living in new cities for short spurts of time, such as 1-3 months, in order to see where they might want to settle during the pandemic and even after. In fact, widespread remote working has morphed work-from-home into work-from-any-home, especially for those with less strings attached and the ability to be more flexible.
Throughout 2021 we will see an increase in the “Life Shopper” persona as the widespread allergy toward commitment in regards to where one lives becomes more prominent, especially for digital nomads who we have seen travelling more and more during COVID-19, craving top-notch connectivity in the great outdoors.
In fact, our data highlights this commitment phobia — specifically how many no longer want to plan far in advance. Case in point: globally in January, 12% of short-term rental bookings were made on the same day as check-in and 33% of reservations were made the same week as check in.
Expect a healthy amount of this persona to book vacation rentals last-minute this year and expect aesthetic, work-from home environments, fast WIFI, a good view, and access to nature.
No. 2: City-Scapers
‘City scapers’ – those leaving metropolitan cities in favor of more rural, spacious destinations, have been a prominent travel persona that emerged from the virus, especially early on. These travelers are heading to drive-to destinations 1-4 hours away from their home base, seeking more space after being cooped up in an apartment (especially those with kids),
City scaperes have been one of the driving forces behind rural tourism — an increased interest in heading to national parks and other outdoor locales — and the renaissance of the road trip. Doing so has filled a void for many who perhaps can’t “life shop” but can “go near” for new, socially distanced and unique experiences that scratch the itch for a change of scenery. These type of guests expect access to outdoor activities (think hikes, lakes and beaches), as well as in-property amenities that can keep them occupied in case last-minute restrictions are set in place — from Netflix and Apple TV to a top-notch sound system.
This travel persona will continue to make an appearance as we head into summer as folks want to take advantage of saved up vacation days and warmer weather. Our data showcases the optimism surrounding travel in June, July and August of this year, with reservation volume 85% higher in the United States this summer compared to last.
The future surge in travel due to mass cabin fever caused by the pandemic — otherwise known as revenge travel — will result in longer stays and further-from-home trips, most likely to be enjoyed by many in comfortable vacation rentals.
Vaccine distribution has offered a light at the end of the tunnel, and all players in the ecosystem must prepare themselves for a surge in bookings that will most definitely occur once the virus dies down. Take advantage of the high intent for consumers to travel longer, further and more smartly and invest in a vacation rental before prices skyrocket.