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The urban and vacation rental industries are showing no signs of slowing down. Our internal data points out that property managers, on average, doubled their listings across online travel platforms from 2017 to 2018. In order to stay competitive and promote even further growth, property managers must not only stay innovative, but also ensure they are minimizing repetitive tasks while simultaneously providing guests with customized, local experiences. All of this while remaining the utmost of professional — sounds time-consuming, right?
Tackle these challenges head-on by staying in the know, keeping these five predictions regarding the industry top of mind in the year ahead.
1. The lines between property management and real estate services will blur.
I believe we will see a further blurring of the lines between traditional property management and additional real estate services. Case in point: In 2018, we saw a number of developments involving traditional property managers joining forces with real estate developers and agents to provide new solutions. For example, Airbnb launched Backyard, an initiative moving the platform into building physical homes that accommodate flexible and shared living arrangements (a form of real estate development, if you will), as opposed to its tradition of short-term stays. And the pop-up WhyHotel straddles the line of residence and Airbnb by working with real estate developers to turn un-leased units into furnished hotel units. In 2019, I predict we will see more creative developments and partnerships aimed at increasing the quality and quantity of supply and increasing short-term rental yield.
2. A new generation of property managers — and investors — will continue to emerge.
The year ahead will see a host of new entrepreneurial property managers, particularly in urban locations. These property managers may have started out as individual owners or hosts and have seen the potential of offering an improved guest experience and return on investment to owners through the use of technology and adoption of forward-thinking property management solutions.
Similar to these newfound entrepreneurs, investors who see the revenue potential in short-term rentals (rather than the traditional long-term leases) will continue to buy up properties in locations that double as a hub for both urban short-term rentals and traditional vacation rentals.
For instance, when I traveled to Portugal last year, I met several entrepreneurs who noticed the influx of outside investments in Porto real estate. One of them told me he established a successful company, handling every aspect of investors’ short-term rentals from locating apartments, to designing and building improvements to guest management, allowing foreign investors to get the additional yield without the additional hassle.
3. Say goodbye to Excel and Post-its, and hello to investing in tech.
Growing and scaling a rental business comes easier by relying on third-party solutions that can handle key management aspects such as automating repetitive tasks or pricing listings competitively. And as travelers move online to book their entire vacations, property managers must become more tech-savvy and ensure they optimize their distribution channels and online communications.
A growing number (the company I work for being one among the many) of such solutions to help property managers manage their operations more effectively have come to market, and 2019 will be no different. We will see increased adoption by property managers of smart-home technology, in particular keyless locks, temperature controls, noise monitoring and even the monitoring of carbon dioxide levels, which can tip you off to instances of over-occupancy.
Some property managers will also invest in dynamic pricing tools to ensure their listings are priced appropriately according to real-time market research and key variables such as seasonality, local events and day of the week.
4. Grassroots and action groups will continue having a voice.
Regulations and education are a serious issue for the collective short-term rental industry. Many governments do not appreciate the positive impact of rentals on a local area, such as more jobs and a boost in tourism. In 2019, I predict an increase in collective partnerships to give the vacation rental industry a voice both nationally and locally. For instance, in late 2018, we saw the formation of a Japan Association of Vacation Rentals, a partnership of companies working with the Japanese Tourism Agency to ensure a voice for vacation rentals nationally, especially ahead of the Rugby World Cup in 2019 and Olympics in 2020. Expect more grassroots and collective action groups to pop up in 2019, fighting for the vacation rental industry.
5. Expectations will rise.
This year, we’ll see an increase in the quality of product offered by property managers in all areas of guest experience, guest communication, owner relations and also the physical product of each rental.
This increase in quality will come as a direct response to the rising expectations for property managers from both guests and owners. In addition, I believe we will see a further rise in the demand for short-term rentals as an accommodation option for travelers who are being converted away from hotel stays. These “new” vacation rental guests are accustomed to hotel services and products, and thus will be demanding more hotel-like services from their rentals, from bathrobes to concierge-like communication.
New owners specifically will be expecting more from their property managers in order to justify the commission they charge, whereas property managers will need to reinvent themselves to be ahead of the curve in order to differentiate their brand from others.
A Bright Future
In such a fast-moving industry, it’s never been more important to keep one eye ahead at what’s coming next, and with 2019 likely to produce much more than these five trends, I’m excited to see where the short-term rental industry arrives at a decade from now. Today it’s experiential travel and automation. Tomorrow, who knows? But blink and you’ll miss it.