Foresight 2020: Examining the Future of the Vacation Property Rental Market
Over the past five years, the market for vacation rental properties has absolutely exploded. When compared to alternative methods of generating passive income—such as investing in the stock market—property ownership can generate an exceptional return on investment, if the property is effectively managed.
The sudden economic and social changes of 2020, naturally, have caused some people to reevaluate whether investing in vacation rental property is actually a good idea. However, even with the health situation that is still in progress, there are still quite a few reasons to believe the vacation market will rebound and continue enabling a passive income. Physical property, as opposed to stocks, is permanent and necessarily finite. While cash flows may be temporarily interrupted, the future earning potential of these properties still persists.
Becoming a successful vacation rental property owner will not always be easy—nobody should throw hundreds of thousands of dollars into the market and assume it can remain untouched. But with the right vacation rental property management team and an effective investment strategy, you can soon begin enjoying the returns you’ve long been hoping for.
In this article, we will take a look at the vacation rental property market and discuss some of the most important developing trends. By taking the time to understand how this dynamic marketplace is changing, you will be much more likely to achieve the ROI you’ve been hoping for.
Increase in Mobile Bookings
Over the past five years, a growing portion of internet usage has taken place using mobile, rather than desktop, devices. Naturally, booking vacation rental properties has been no exception to this general trend. For a property owner to be successful, they must ensure that their property can be easily viewed via mobile apps that have been completely optimized—this includes being able to look at photos, see details about the property, and also ask the owners questions. In fact, one recent travel report revealed that up to 80 percent of last-minute bookings were made using a mobile device.
Demand for Larger, More Luxurious Units
More than just looking for a place to stay, many travelers are now looking for an authentic experience. When vacation rentals are distinguished from other rentals (such as business rentals), it becomes clear that larger and more luxurious units have been clearly dominating the market. Luxuries such as a pool, private outdoor areas, smart home technology, and many others can help a property distinguish itself from others in the area. This is especially true in “snowbird” destinations, such as Scottsdale, Arizona, where many visitors are staying for weeks or more on end.
Preferences for Instant Booking
When people are planning future trips, they don’t the process to take hours or even days—they’ll want to be able to find a property that interests them and immediately book their stay. As a result, it is crucial for vacation rental property owners to make it easy to instantly book a stay. If you require a prospective visitor to wait for approval before their booking is complete, it is quite likely that they will end up looking at a different property.
Rise of Low-Season Travel
In almost every region of the country, there will be times of the year where demand for vacation rentals will be especially high. New Orleans is popular during the week of Mardi Gras. Arizona is popular during the January through April when the rest of the country is typically much colder. Colorado and Utah are popular during ski season. However, in contrast to these general trends, many people are realizing that the best way to save—and to avoid the lines at their favorite destinations—is to book during the offseason. Consequently, off-season travel has enjoyed a notable rise, causing the differences between seasons to be a bit less noticeable.
The American Pet Products Association (APPA) estimates that roughly 85 million (67 percent) of American households currently own at least own pet. If you are a pet owner yourself, you know just how loving and important our four-legged friends can be. In order to appeal to a broader audience, it is generally a good idea to make your property pet friendly. By not only allowing pets but also including extra accommodations for pets (dog doors, special treats, general pet supplies, etc.), you can increase the value you are offering your customer and potentially generate positive reviews.
Interest in Other Important Accommodations
Of course, there are some people who are also allergic to pets, which is why if you own multiple properties, you also might want to consider designating at least one of them as “pet-free.” This is just one of many possible accommodations that can help you appeal to a more niche audience. Other special accommodations, including handicap accessibility, outlets for charging electric cars, and designated workspaces for people doing business, can also help your properties appeal to a much more targeted group of people.
Hiring a Vacation Property Management Team
Because more people have begun investing in vacation rental properties, the market itself has become quite competitive. Perhaps the most notable trend of the past few years—and one that can be expected to continue—has been the need for working with a qualified vacation property management team.
With the right team, it will be much easier to market your properties and ensure they are being consistently booked at the most profitable prices. Additionally, the team will be able to take care of other things, such as cleaning between guests, performing necessary maintenance, and also communicating with guests as needed. Ultimately, this is the best way to remove the stress of owning a vacation property.
2020 has already been a chaotic year, but there are still quite a few things we can all look forward to. Once travel and vacations resume at their normal rate, many people will be looking for high-quality rental properties. By recognizing these trends and incorporating them into your general ownership plan, you will find yourself positioned for success.