Last month, Sonder announced its valuation and public market debut. The vacation rental industry has been eagerly waiting to see when this will materialize, ever since Airbnb’s IPO has prompted investors to sit up and really take notice of short-term rentals.
On the consumer side, changing travel behavior has helped short-term rentals continue to overtake other types of accommodations as the preferred method of travel. But with this popularity now comes a host of opportunities and challenges.
When you sum this up, it all comes down to “quality”. It’s going to be a major force in the vacation rental industry in 2022, and here we explain why.
Meet expectations with quality
Expectations for short-term rental experiences have been tested amid the pandemic. Many consumers, who traditionally stayed in hotels, have flocked to the privacy, space and flexibility that vacation rentals offer.
Expectations for hotel and vacation rental experiences are of course not a new dynamic, as consumers were already cross-purchasing for the two types of accommodations, vacation rentals mimicked the customer service typically coined by hotels and hotel brands were investing in vacation rentals. wallets.
It’s no surprise that Sonder, for example, has become so popular: it marries the conveniences of short-term rental space with the standardization and comfort of hotels.
For vacation rentals, premium linens and a transparent booking process are no longer differentiators, but the foundation of what hosts and operators should offer.
The attributes that will define quality in 2022 have instead become cleanliness, additional amenities, improved communication and security. Vacation rentals are more confident in setting their own brand standards and delivering predictable service for a five-star guest experience.
Supply challenges and impact on quality
The demand for short-term rentals in the United States is expected to increase by 14.1% in 2022but that the number of available ads is still 9% below 2019 levels.
Laws and regulations can promote quality in industry, while improving the quality of industry can mitigate or appease laws and regulations.
Jeremy Gall – Breezeway
It is likely that we will see new inventory coming from new hosts, fueled by the accessibility of self-management via OTAs and the low interest rate environment.
This is validated by what we see, as smaller operators more quickly understand the importance of automating operations to differentiate the quality of their inventory and the personalized service they can provide.
But what does the rise of the “hobbyist” mean for customer experience? Does it become more personal or more unpredictable?
I would say it’s both.
There are amazing hosts who will put 110% care and attention into creating a unique and welcoming experience for their guests.
Yet there will be others who register on OTAs who inevitably may not meet the high standards demanded by consumers and which professionals can meet.
This unpredictability can be a challenge for OTAs who want to attract only the best properties to their platforms.
Quality as a marketing tool
OTAs therefore place more importance on the quality of their inventory, highlighting the quality accommodations that consumers covet when looking for stays.
The quality service provided by a manager and the backend efficiencies made possible by technology discussed earlier should be marketed in their listings to silence the noise. Providing marketing services through OTAs will also create a competitive environment that enforces industry standards and improves overall quality.
A rising tide lifts all boats.
Technology at the service of quality
Investments in travel startups are expected to top $40 billion in 2022, with record investments in technology solutions fueling the short-term rental industry.
There are now a seemingly endless number of tools that can help property owners and managers improve their operations.
Embracing technology and compiling an agile technology stack is one of the most optimized ways to deliver quality customer experience and quality backend operations.
According to our survey data, scheduling and assigning property maintenance tasks, as well as coordinating work with crews, were the two biggest operational challenges for vacation rental operators this year. last. Yet 57% still rely on manual workarounds and generic task management tools like spreadsheets. and calendars.
These inefficiencies signal room for improvement. Technology will help optimize and enable quality work and, in turn, improve in-room experiences. As API connections also become richer between various tools, technology will continue to help elevate the industry higher.
Quality as a forcing function
With demand and growth comes ever-increasing regulatory pressure. While the heightened exposure of short-term rentals has boosted both supply and demand, it has also put us in the regulatory spotlight harder – in a way that has never been before.
The demand for quality can be two-way: laws and regulations can promote quality in industry, while improving the quality of industry can mitigate or appease laws and regulations.
The result of further regulatory scrutiny could be a commitment by vacation rental operators to preventative maintenance and guest safety programs. Of course, professional managers and small hosts can implement their own quality-focused processes to stay regulatory-free and continue doing what they do best: delivering exceptional guest experiences.
As the vacation rental industry (and therefore the short-term rental industry) continues to grow and progress, quality is a common denominator that every professional owner, host or manager can work towards collectively.
* Check out this interview with Gall, recorded for the How I Got Here podcast in June 2021.
How I Got Here Episode 70 – FlipKey’s Jeremy Gall