Short-Term Rentals’ Comeback Story Is What We Need To Put 2020 To Bed
Vered Schwarz is the President and COO of Guesty, an end-to-end property management software for short-term rentals.
Looking back on mid-March of this year, with justifiable panic widely setting in across the world as to how this virus would gravely impact so many of us, one narrative that I kept hearing on repeat sticks out in my mind: Travel is dead and the industry will never be the same.
The latter is true — travel will never be the same, but among the living it is. And Airbnb’s $47 billion IPO is a testament to just how resilient, agile and recovery-prone this ecosystem is. (Full disclosure: Airbnb is a Guesty partner.)
Tough As Nails
I’m speaking from firsthand knowledge as to how tough as nails the players in this ecosystem are. As president and COO of a platform used by professional hosts and property management companies to automate their business operations, I have seen entrepreneurs worldwide build their businesses off of Airbnb’s democratization of the hospitality industry. These were the same individuals whose companies were impacted first by Covid-19 — some of whom were able to quickly pivot, adjust their marketing strategies, alter their business models and, for a few, even surpass their revenue projections for the year.
The result of many stories like these will be the most successful IPO the sharing economy has seen to date, highlighting the viability of what short-term rental platforms promise: For hosts, you can be anywhere in the world and start your own business; for consumers, flexible living and diverse travel experiences is now at the core of how we work and play.
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A Different Type Of Travel
It should come as no surprise that seasonality typically has the biggest impact on vacation rental businesses. High season equates to higher prices with less flexible cancellation policies, and low season means discounted rates and offering potential guests more incentives to book.
Covid-19 threw this tried and true knowledge out the window, leaving many grappling with how to — or even if to — attract guests to book their listings. In the aftermath, we saw companies downsize, operate with leaner teams and reevaluate what the rest of the year would look like.
On a parallel path, to the shock of many, consumers kept on traveling — in lower numbers, mostly domestically and with different behaviors. In fact, we identified various travel patterns and personas that emerged as a result of Covid-19, which have served as the building blocks to many startups in the space quickly reconfiguring their branding and who they cater to in order to survive and achieve stability and ultimately, longevity. They include:
• City-scapers driving up to four hours away from home to remote, rural locations.
• Life shoppers trying out extended stays of one to three months, test driving new cities like locals.
• The new-age digital nomad who has chosen to work in a rental in the great outdoors that encompasses an aesthetic work-from-home environment and top-notch connectivity.
What connects all of them? On average, they all made reservations within weeks of their check-in dates, stayed longer and in locations outside of major cities, resulting in the redistribution of travel and platforms supporting extended stays. In fact, the aforementioned has caused many to think about lodging differently: Guests today are no longer the traditional travelers we once knew and as a result of their new travel behavior, they care about the accommodation experience more than the actual destination.
What This Means For Entrepreneurs
The unexpected amid a hugely devastating time period is that short-term rentals have gone mainstream. Now the ideal choice for traditional hotel-goers who perhaps never envisioned themselves booking a short-term rental, today these vacation rental converts wouldn’t hesitate as this type of alternative accommodation provides privacy, no crowded common areas and less guest turnover than hotels.
Navigating travel around what we are all referring to as the “new normal” has culminated in a huge moment that represents the millions of diverse entrepreneurs who opened their hearts and homes to tourists from around the world over the past decade. Though many were hosting guests before, this IPO and frankly, this pandemic, has brought the short-term rental ecosystem to center stage. It’s living proof that people can create their own destinies, launch a side venture to provide for their families and be a part of a wider movement in which the main message is: There is no one-size-fits-all in travel.
A New Standard In Resilience
We have truly reached a turning point for the travel industry — one that points toward recovery and promise after an unprecedented nine months, as well as a path forward, though one that is somewhat uncertain. However, one thing’s for sure: If this is the bedtime story closing out 2020, bring it on 2021.
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