2020 was a rollercoaster ride for vacation rentals. The whole industry was forced to adapt to the new state of the world and evolve in ways that will undoubtedly have an impact on how we do business in 2021.
So what can property managers do to prepare for the challenges of this new year? How can they make sure that their businesses not only remain afloat and stay competitive but are also able to grow?
They, in turn, asked their respective teams (who are in touch with property managers as well as channels and software partners on a daily basis) to contribute. As a result, around 15 members of the Rentals United team were involved in the creation of this blog post!
We believe that the insight we’ve managed to gather will be extremely useful for us internally – and we’d also like to share it with you so you can prepare for the year ahead.
Here are the top vacation rental industry trends that the Rentals United team anticipates will define the future of property management businesses in 2021 – including the challenges and opportunities.
We’ve grouped our findings into three sections:
First, let’s take a look at some stats concerning the state of travel and the trajectory of recovery.
We expect last-minute bookings to be a continued theme in 2021, especially when travel restrictions are lifted.
At the same time, we also expect early bookings to increase as the vaccine becomes more widely available and distributed. The adoption of relaxed cancellation policies and airlines waiving their flight change fees will also play into this trend.
Domestic tourism will continue to be popular, and may even increase, continuing to present opportunities for property managers worldwide.
Outdoor vacations will continue to gain in popularity as people escape to the mountains and national parks. After strict lockdowns, travellers will seek open spaces and fresh air, travelling for skiing, hiking and golf.
Remote destinations will continue to be more popular than urban ones, but cities will have a comeback towards the end of 2021 as vaccine programmes evolve. Until then, rural houses, cottages and mobile homes will continue to be the preferred options.
Over time, we expect to see significant improvement in traveller confidence, which will ultimately bring travel back to life.
“You will be able to create your own perfect tech stack with truly open platforms.”
This year, property managers will be able to create their own perfect stack instead of relying on pre-built software modules that may not fit their company’s growth stage or business model.
Sadly, we are expecting the number of property management systems worldwide to shrink: consolidation will continue as the big suppliers look to take advantage of the fall-out from the pandemic.
However, we will see the emergence of truly integrated platforms. Property managers will be able to reap the benefits of multiple software companies working together to provide their specialised expertise within one interface.
Laser-focused vacation rental tech companies will provide fast and simple integrations. As a result, your favourite software will gain new functionalities or even product lines overnight, e.g. a complete channel management module right inside your PMS.
“Your software will need to be the fastest at updating channel APIs for you to rank higher.”
Large OTAs will invest even more in the conversion game. With a large portion of their inventory coming from B2B partners like the Rentals United channel manager, more conversion tools will become available via API.
Channel management companies will need to be ready to keep up with the demand for new developments and upgrade connections quickly to let property managers take advantage of new features. Just having a presence on a channel will no longer suffice.
Unified, easy-to-integrate, regularly updated channel management APIs will become more important for professional companies looking to grow. The importance of keeping up with the latest tools to rank higher will be paramount to their choice of Channel Manager.
“Enterprise-level revenue management will be a must for all business sizes but with a twist.”
Revenue management and data will be crucial this year as they have been for many years – but this time, with a twist. Previously, revenue management and rate planning were mostly influenced by historical data for seasonality curves, recurring demand events, etc.
However, COVID-19 has thrown a wrench in the legacy way of looking at data: historical demand data is no longer valid due to changes in travel trends brought about by the pandemic. For example, booking lead times have gone down, and the length of stay has gone up. This makes it difficult to use historical data for revenue management purposes.
Of course, you can still use some basic high/low season methodologies for setting base rates. But revenue managers are not going to be able to lean on historical base rates and booking windows going forward.
They need to be more reactive than in the past, putting more emphasis on their pickups in the future and do more testing with rates. Property management companies need to invest in data warehouses and in tools to visualise their data/pickup better.
In parallel, property managers will also need to get creative with flexible cancellation policies, booking window discounts, channel promotions and alternative channels in order to define the new revenue management practices for setting rates in the future.
Rentals United has an in-house revenue management consultant, Doug Truitt, who can help you set up the Rentals United Data Studio allowing you to make the right decision at the right time. Contact firstname.lastname@example.org
“The bigger, the better.”
When it comes to vacation rental marketing, our mantra in 2021 will be “The bigger, the better”. This year, people will be travelling with their families and booking vacation rentals that can sleep larger groups of people. So, our advice to property managers is: if you’re signing new rentals, don’t take on anything under two bedrooms.
As guests will prefer vacation rentals over hotels for another one to two years, large OTAs will aggressively look for more inventory. As a result, managers with many rentals will have a good bargaining hand.
2021 will be the year of diverse accommodation types. If you haven’t considered adding quirky/outdoor properties to your portfolio, now’s the time to do so. Camping, glamping and caravanning is a huge trend (besides the seclusion, it’s affordable and environmentally friendly), and it will get you bookings.
Large OTAs will be after this accommodation segment too and will diversify their offering into boats, glamping properties and campsites to broaden their offer and audience.
To take advantage of the new outdoor trend, start advertising on channels that target this niche. Through Rentals United, you can already get listed on the Glamping Hub, and soon The Dyrt will be available too.
2021 will be the year of niche channels as property managers move to expand their visibility and focus on more diverse customer segments.
PMs will start to look beyond short-term bookings to fill up calendars. Mid- and long-term will become part of the strategy for many since “work from home” has become “work from anywhere”. All the big OTAs have quickly increased their maximum stays to beyond 30 days and a number of mid-term booking websites have seen their bookings skyrocket.
The book direct movement will continue to grow as more and more managers invest in it. In 2021, it will be more important than ever to surround yourself with website conversion, SEO and SEM experts and calculate your costs carefully. And remember, it’s a long term strategy, so don’t expect results overnight.
Are you ready to build a tech-based distribution strategy? Discover how our enterprise-level Channel Manager can get you more bookings.