In this guest column, Jeremy Gall, founder and CEO of Breezeway, a property care and operations platform for hospitality providers talks about post-lockdown traveller mentality and how hospitality has geared up to cater to the same.
The vacation rental sector has boomed over the last two summers, with sold-out properties in popular destinations. When other forms of accommodation, like hotels and cruises, were initially off limits, the privacy and unique charm of vacation rentals made them the obvious choice of accommodation. Now consumers are less fearful of Covid-19 as vaccine programs are thriving and borders are reopening, and with this, vacation rentals are just one way we can all enjoy travel again.
But the experience of 2020 and 2021 seems to have struck a note in both converted and long standing vacation rental enthusiasts and there are already reports of properties being booked out for summer 2022 – Guesty recently revealed that 81% more reservations have been made in the UK for next year, compared to the same period in 2020 for booking in 2021.
To understand this trend, we need to look at why guests have and will continue to book vacation rentals against their accomodation counterparts – and whether there is an endpoint to this seemingly unchecked growth.
Post-lockdown traveller mentality
There were three key drivers to why vacation rentals were so popular as people began to travel again after the first wave of lockdowns:
1. The perception that they offered greater security against Covid-19 as they minimized the need to share spaces or interact with staff;
2. The sudden ability for many employees to work remotely made vacation rentals an attractive proposition to essentially ‘live’ somewhere else or blend holidays with office time;
3. The enduring appeal of travelling ‘authentically’ and experiencing a unique property.
Understanding why vacation rentals are still No.1
With the exception of the second driver (more companies are now urging workers to return to offices at least part-time), the above still stands true in why vacation rentals are continuing to experience a surge in demand right now. But there are other reasons why, when given the choice, travellers will continue to stay in vacation rentals next summer.
Awareness of the vacation rental product has never been higher and this has been cumulatively building over the last eighteen months. Many of the consumers in the space are first time renters and just as their peers had learned prior, they have learnt from the experience that they will need to snap up the best homes early.
Thinking about the ‘best homes’ brings up an interesting point: the physical property plays a huge part in the overall travel experience when you book a vacation rental. And if there is a limited number of ‘the best’ homes available, booking early becomes even more imperative.
This awareness is not just driving consumers to the market – it’s also been encouraging property owners to get in on the trend and grab a piece of the profit. This is partly due to the success of Airbnb’s recent marketing efforts to recruit hosts to their platform. These hosts reportedly earnt a collective $1 billion during 2020. If there’s new homes to rent, doesn’t it stand to reason that there will be more choice next summer? Well not necessarily – unless homes are actually being built in prime tourism spots, which is exceptionally unlikely, the market is still suffering from a lack of supply across the board. This strained demand vs. supply relationship is going to fuel early bookings for 2022.
The vacation rental industry has also experienced rapid professionalization in the last few years (take it from someone who has been in the industry at a time when guests needed to bring their own sheets, towels and toilet paper for their stay) which was accelerated by the high standards guests held operators and owners to during the pandemic.
This professionalisation has been enabled by technology. The initial transformation took place behind the scenes as a whole host of tools became available for operators to automate and streamline their business. Now APIs are enabling software tools to speak to each other. Our property operations and care platform Breezeway can, for example, use reservation data from a PMS to coordinate housekeeping or send an automated check-in text to a guest.
At a more visible level, contactless check-in, automated guest messaging and smart home monitoring are a few touches that have brought the ‘hospitality touch’ of hotels into vacation rentals. It’s inevitable the sector will go on to capture some of the hotel market share next year.
What’s going to happen between now and next summer?
The base level of potential customers for vacation rentals has been permanently increased and this is why vacation rentals are booking up fast for next year.
But for those that haven’t secured their next holiday yet, don’t worry – the growth that we’re experiencing right now is likely going to plateau come January. However, if there is a unique spot or property you want to travel to next summer, you’d be wise to book sooner rather than later…