The vacation rental industry has gone through a lot of changes lately. This past year alone, we’ve seen new trends emerge that will continue to have an impact on how we do business for the next decade and beyond.
So what are some of the changes we expect to see in the next ten years? To find out, we asked a property manager, an industry expert and a tech provider. They shared with us their insights on what property management will look like in 2030.
Here are the vacation rental industry trends that these experts believe will define the future of property management in 2030.
If we’ve learnt anything from this uncertain era in the vacation rentals industry, it’s that we are able to quickly find new ways to engage with guests and maintain bookings.
Guest expectations changed rapidly this year, and they will continue to do so in the future. Rental properties will need to meet higher cleaning standards (the adoption of antibacterial materials in the vacation rental could be the future). Luxury levels will be more tightly defined. And, guests will expect flexible cancellation policies.
Already, guests demand fast response times, more communication, and added safety and security measures besides hospitality services. In the future, they will expect a virtually touchless experience from the moment they reserve a vacation rental property all the way to check-out.
As a result, we will see a growth in technologies that enable transparency, as well as quick and streamlined operations. And the evolution of guest expectations will continue far beyond the COVID-19 crisis.
“In 2030 the guest experience will be smooth and personalized without them realizing the complexity behind the scenes. This is because the industry will be fully integrated with a common API to allow all ‘niche’ software vendors to integrate with each other easily.”
When a guest enters a smart home, a device from entry (Alexa and Siri are just the beginning) will be able to preempt their needs: from the desired room temperature, ambient lighting, favourite music, streaming networks, as well as suggest targeted activities specifically catered to them based on their profile.
“Once connected to the wifi, the property manager will get a notification as well as their email. When they are having a party, they’ll get a call. When they check out early, the cleaners will know and can head over right away. From insurance and background checks to upselling services and special discount coupons, the vacation rental industry is becoming more sophisticated. As the industry grows up and continues to play in the same sandbox, the guest will benefit from ‘personalization at scale’.”
The future of property management will bring with it the utilisation of guest communication. Due to everyone’s large digital footprint, we will know what guests’ sore points are before they even step foot in our vacation rentals. By 2030, we will have figured out how to create a more efficient vacation rental operation that tailors the experience to every specific guest’s needs. Who knows, we might even have robots making dinners and hologram video calls by then!
Want to see how you can start streamlining your guest experience today? Check out our blog post on 8 top vacation rental welcome apps to start using today.
Riding rapid technology advances, vacation rental property managers today are in a position to market their properties to a global audience and manage their rentals as efficiently as ever. This will only continue as technology advances revolutionise vacation rentals at a multitude of touchpoints.
We spoke with Richard Vaughton, vacation rental expert about what he thought property management post-2030 would look like. Here are his thoughts and insights:
“Technology and the Internet of Things (IoT) will be playing an even bigger role. AI/ML capabilities have all revolutionized the dynamics of operating and maintaining buildings, so modern urban buildings will see improved energy and infrastructure management.”
This technology will enable property management companies, organisations, and individuals to monitor equipment and take action before a crisis strikes.
For example, when a freezer or an air conditioning unit breaks down, the AI will contact the maintenance team and notify them of the problem. They will know exactly which parts they need to take with them to complete the repair. Once repaired, the property manager will be notified automatically and an invoice will be generated.
The idea behind AI is to make connectivity faster and cost-efficient hence enabling real-time visibility of operations. Richard says:
“This will cover all parts of the accommodation spectrum and requires an integrated world where efficient operational companies run through smart systems, with the regulatory need for traceability of everything on the blockchain.”
Curious to know more? Read our blog post on the future of blockchain, cryptocurrencies and vacation rentals!
The short-term rental industry faces a unique set of challenges when it comes to sustainability.
In 2030, green technology will be available to increasingly connect all the integral parts of a building. As Richard says: “It will improve eco-awareness based on regulatory guidelines and improve efficiency on all fronts.”
Green technology will transform operations for property managers in several ways. Here are some examples:
In an era of eco-consciousness, such solutions are rapidly gaining traction.
Find out what property managers can do for the environment while responding to the growing trend of sustainable and socially conscious travel.
Another trend that we expect to see is the blurring of lines between short, mid and long-term rentals.
The crisis brought about by the COVID-19 pandemic forced many players of the short-term rental industry to reconsider their business models. As the demand for short-term rentals plummeted, property managers started looking for other ways to fill their properties. Many decided to adopt a flexible rental model and open up their rentals to mid- and long-term bookings.
According to Jesse DePinto, Co-founder and CPO at Frontdesk, this trend will continue. “We are seeing multifamily property managers adopt short-term rental strategies at an aggressive pace, in an effort to increase their overall portfolio occupancy,” he says. “When companies like Stay Alfred and ApartmentJet shut their doors, we had multiple apartment owners call us, asking ‘What do I do with all this furniture?’”
As companies who relied on the master lease model went out of business, many apartment managers started self-managing their short-term rentals.
“The idea of a short-term rental management company leasing units from an apartment rental management company may be a thing of the past very soon,” Jesse says. “Real estate property managers are now turning to STR as a way to generate more income for their owners to differentiate and win more business. Eventually, we may be calling this simply the ‘rental business’ without needing to differentiate between short-term and long-term.”
For this to happen, the short-term rental industry will also need to become more professional.
“Short-term rental experts have found that consumers are more likely to book with professional hosting companies than individual hosts,” says Jesse. “As seen in the broader hospitality industry for decades, consistency and predictability are valued by travel consumers. Professionalization is key for broader adoption as short-term rentals become mainstream.”
What about OTAs? You’ll be able to book a rental for any length of time on one booking platform -they won’t be called OTAs anymore – rather FAAs “furnished accommodation agents”
Today, property managers can market their rentals to a global audience. There are hundreds, if not thousands of listing sites out there (including large OTAs and niche channels) that provide access to different markets.
However, just as guest experience is moving towards personalisation, marketing and distribution are, too. OTAs are constantly developing their search engines to match guests and property managers based on individual needs. The sites are giving searchers more accurate results that are close to exactly what they’re looking for. Conversely, they’re ensuring that hosts can connect with their target audience.
“In 2030…The D2C (direct to consumer) social media marketing model will be so evolved that property managers will be able to surgically target potential visitors – only marketing to people who are looking exactly for available inventory.”
Due to this highly focused marketing, prospective guests will demand more and more tailored experiences. Starting with the first ad they see all the way through to them staying at a vacation rental. The quality of this experience from start to finish will be the number one factor in inspiring guest loyalty.
“Google will be the dominant vacation rental search platform,” Margot says. “They will have a holistic ‘travel experience’ offering that will tie the rental to local experiences that are meaningful and memorable for the traveller”.
However, Margot believes that local businesses will still find it difficult to reach local travellers and provide them with the “locals-only” experience that they crave.
Therefore, the connection between local culture and rental properties will be even more prized than it is today.
“Coming off of 70 years of standardization (from 1950-2020), we are in the dawn of individualism being more highly valued. Property managers will find more ways to deepen the connection between the rental experience and the locale, with locally sourced food, decor, experiences, and more. They will all be upselling these local highlights easy-sign-on marketplaces where revenue can be shared to everyone.”