After almost 18 months of travel restrictions, the world is beginning to open up again.
The Biden administration has announced that fully vaccinated travellers from EU countries and the UK will be allowed to enter the US by November.
Australia, whose borders have been sealed off to both inbound and outbound travel since March 2020, plans to reopen its international borders to vaccinated citizens and their relatives in November.
The UK has also relaxed its travel restrictions: people who are fully vaccinated no longer need to provide a negative PCR test before departure if they’re coming from a non-red country.
Thanks to these developments, the outlook for vacation rentals in late 2021 and 2022 is looking more and more optimistic. The summer of 2021 meant record occupancy rates in many markets, and some of the momentum has carried over into the shoulder season.
But what can we expect from 2022? Will it be a record-breaking year when we can finally say that the vacation rental industry is past the recovery stage and back to the growth stage that it had been before the pandemic?
In this article, we’ll outline the most important trends that will define the vacation rental industry in 2022, with help from our friends at AirDNA, data and analytics provider who track the performance of over 10 million properties on Airbnb and Vrbo worldwide to empower with comprehensive insights.
And, we’ll also give you tips on how you can prepare your property listings for the expected surge in bookings.
Demand pacing for the next 11 months as of October 1st 2021. This is a point-in-time comparison, so when comparing to 2019, we are showing the bookings that were already made at the same point (October 1st), not the final totals.
The first piece of good news is that we can already see signs of increased demand for vacation rentals in 2022. In fact, bookings for short-term rentals in major European and North American countries are already pacing well above 2019 levels for the spring and early summer.
“The course of the pandemic only proved how fast short-term rentals were able to adapt and satisfy changing traveller needs. The desire to travel has not diminished, but travellers are searching for unique lodging where they can enjoy extra space and amenities with their families and friends,” said Alex Gomez, Head of Data Solutions at AirDNA.
A recently released report by Evolve shows similar trends: out of 5,000 respondents, 80% said they are moving forward with their 2022 travel plans and 86% said they are planning to book a vacation rental next year.
“Learning from their experiences this summer, seeing low vacancy in popular markets, guests are booking early to ensure they get the best properties,” Alex from AirDNA told us.
Of course, these increased lead times are happening in a world where travellers’ expectations have changed, and flexible cancellation policies have become the norm. To lock in these early-bird bookings, you’ll need to offer a lenient cancellation or rebooking policy.
And, you’ll need to make sure your listings are visible and ready for bookings – we’ll go into that later in this article.
Another cause for optimism is the continued growth in ADR.
“Average Daily Rates will remain higher, mostly due to the continued success of larger, rural properties rather than city-centre apartments. Rural properties are ideal for family travel as guests look for a touch of luxury after so many months without a proper holiday,” said Alex Gomez from AirDNA.
“Globally, rates are currently pacing around 10% higher than 2020,” he added.
According to AirDNA, we are beginning to see the beginnings of a return to urban travel, but not at the same scale as pre-pandemic.
They predict that travel to big cities will at first be more popular with domestic travellers than international as the main forces that draw people to urban centres are events, family visits and, to a limited extent, business.
According to the Evolve report we referred to above, secluded mountain and waterfront getaways are still the most popular, while urban experiences are at the top of the list for only 15% of travellers.
One of the biggest booking trends that defined the years of the pandemic was longer stays.
Throughout 2020 and 2021, guests were looking to get away for extended periods of time to self-isolate, spend time with family or work from home. We saw a surge in mid-term bookings and many vacation rental managers shifted their strategies to accommodate these types of guests.
Our internal data shows that the average length of stay will continue to increase in 2022. If we compare bookings for spring and early summer 2022 to bookings for the same period in 2020, we can see a significant increase in the average length of stay for most months in most countries.
The United States and Greece stand out, where the average length of stay for January bookings has doubled and tripled respectively since before the pandemic.
This is good news for property managers: there’s clearly an opportunity to increase occupancy by locking in longer stays for the New Year.
In 2022, doing things the way you’ve always done them will only hinder your performance.
To quote Brian Egan, the CEO of Evolve: “Consumers expect the same ease and consistency from vacation rentals that they have found in other forms of travel. This places a premium on things like rate transparency, cancellation policies, and customer service. The companies that will be successful are those that are already adapting and adjusting to these changes.” (Source: Evolve report)
Adjusting to new guest expectations starts with revamping your distribution. The way you showcase your properties on booking channels will determine your success in 2022. Here are four steps you can take to make sure your property listings are always putting their best foot forward:
According to Alex from AirDNA, the most important thing you can do to optimise your listings is make sure that you have a high quality and quantity of photos.
“Our data shows the more photos, the higher your occupancy. Guests want to know what they’re booking,” he said.
This is true regardless of what channels you advertise your properties on. The number of photos is a major ranking factor on all the big OTAs and is essential for Airbnb SEO and ranking higher on Vrbo.
However, photos aren’t the only things that determine the success of your listings. There are many small adjustments you can make to increase your conversion rate. The trouble is, they’re hard to identify.
One way to do it is by manually auditing every single one of your listings on all your channels. You need to check things like:
As you can imagine, going through this process every time you suspect something about your listings might be off is extremely time-consuming.
Another, more time-efficient way to health-check your listings is by using RU Data Studio Property Health Cards.
Part of Rentals United’s revenue success software RU Data Studio, Property Health Cards allow you to automate the auditing process described above. They give you insight into your property data that you’ve never had access to before.
As a result, you can identify your listings’ shortcomings at a glance and remedy them in a quick and efficient way, straight from the Rentals United channel manager.
For example, Property Health Cards show:
If you want to be ready for 2022 bookings, get started with RU Data Studio now.
Health-checking and optimising your listings on the big OTAs is crucial: but so is diversifying your marketing mix to include niche websites.
Despite the increase in demand, you’ll still be up against plenty of competition in 2022. Supply hasn’t diminished, and standing out from the crowd on OTAs has never been more difficult. What’s more, relying on one or two channels for all your bookings is risky.
To maximise your properties’ visibility and access the largest possible pool of travellers, we recommend incorporating niche channels into your distribution strategy.
These booking sites target travellers with specific needs or interests, some of whom may not even by using mainstream OTAs to search for and book accommodation. As a result, if you decide not to get listed on them, you could be missing out on bookings.
Here are some of the different types of niche channels that have worked for our customers:
If you don’t see your niche in the list above, check out our guide to niche vacation rental websites where we list more than 40 channels in different niches that drive bookings.
If there’s one thing we’ve learned about vacation rental revenue management from our own experience working with clients over the past year and from speaking with industry peers at this year’s vacation rental conferences, it’s that property managers need a new approach to revenue management.
While some basic seasonality trends are still valid, historical data can no longer inform your revenue decisions. You need to find a more reactive way to price your rentals, using data to identify trends as quickly as possible.
Traveller expectations and behaviours can change overnight, so maximising revenue in 2022 will be all about reacting quickly and course-correcting.
As you’re preparing for the surge in bookings, you should invest in tools that allow you to visualise your data, make sense of it and take action on it.
This is the reason why we created Rentals United Data Studio: to help you closely monitor what’s happening in your market and compare that to your own data so you can adjust your prices for optimal conversion.
We are also big believers in using distribution data to inform our revenue decisions: you can read more about this in our ebook on how to reinvent revenue management in 2022.
All in all, things are looking up for vacation rentals in 2022. Bookings for the spring and early summer are already pacing above 2019 levels, ADR is on the increase and average length of stay is going up, too.
If you want to capture the pent-up demand and turn 2022 into a record-breaking year for your business, start by revamping your distribution. The four best things you can do for your listings right now are:
We hope you found this article helpful in preparing for 2022. Many bookings to all!
Are you ready to build a tech-based distribution strategy? Discover how our enterprise-level Channel Manager can get you more bookings.