With the pandemic finally more or less in the past, the European short-term rental (STR) industry is experiencing another strong year, forecasting to earn a whopping $55 billion in 2022. People are again looking to travel – and not only locally. In the summer of 2022, we were again able to see more people travelling abroad and having unique experiences. But as the travel industry keeps on evolving, so do the travel trends. This autumn, Beyond sponsored and attended Vacation Rental World Summit (VRWS), The Avantio Partnership Conference 2022, and Vitur Summit, and we’re ready to bring to you the biggest travel trends to keep an eye on for 2023.
Ready? Let’s jump right into it!
Sustainability has been the biggest area of focus throughout this conference season. VRWS even ensured that the whole event had been offset and the material used was recyclable. Although most STR industry professionals agree on the importance of sustainability, only a handful have it at the core of their business. On the other hand, 90% of travellers want to travel sustainably, and 3 out of 5 actually do today. In fact, research shows that travellers are willing to pay 38% more to travel sustainably.
Although sustainability seems to be an important value for both travellers and hosts, there is still no clear definition of what sustainability represents in STR. There seems to be a big gap between what people desire sustainability-wise, and the tools and tactics that property managers are aware of and able to utilise.
If you’re unsure of where to start, start in your home. Install low-energy appliances, and light sensors, incorporate smart home technology, etc. What works in your home will probably work in your holiday let as well. Last but not least, act as an advocate, and don’t be scared of educating your guests on sustainable (travel) practices.
The increasing inflation throughout Europe has also brought up concerns regarding the recession. Looking at the past trends, we can see that North America is currently performing very well, reaching higher ADRs and RevPan than in 2021, with occupancy staying relatively similar. Europe is certainly following the US trends and has shown a 5% YoY growth this summer. In Asia on the other hand, the STR industry is still recovering from the pandemic.
Supply is following the same trends, with demand getting stronger year by year, but it is still 11% down compared to 2019. Consequently, countries have been adopting new regulations to fight inflation and fear of recession, which are having a big impact on major European cities.
In order to be recession-proof, it's important to understand the broad economic cycles. Start by optimising your revenue management and distribution strategy. It's also important to take a look at your inventory both in terms of location and the regulations that apply. But don’t panic, as big data companies predict that the recession will not have a significant impact on travel. People will continue to travel but in a different way, they’ll travel more consciously and will think about how they want to save costs.
The Use of Data
Data drives strategy, priorities, and investments, and therefore should be an integral part of any business. Like in any business, setting goals is essential, not only to know what you want to achieve but also to be able to reevaluate periodically and know if you’re heading in the right direction. Secondly, measure your performance in everything you do. All of your actions need to have quantifiable results. And thirdly, interpret your performance and iterate.
Here are some reporting practices that you might want to consider:
- Prospect reporting - give confidence to new owners with data-based proposals
- Weekly company report - drive your team’s motivation
- Revenue management - optimising strategy & automate data gathering
- Operations - unlock efficiencies & improvements
- Performance tracking - master the strategy
- Owner reporting - retain owners with proactive, justified performance reports
Making data-driven decisions enables you to respond to the market much better and consequently, grow faster.
Finally, use the data to automate your processes. Going forward, property managers looking to grow will need to optimise their processes and use automation tools in order to compete.
Another trend that was highlighted during the conferences is that hosts and property managers (PMs) seem to be underperforming in the eyes of the guests, especially in terms of communication. This was noticeable due to guests leaving lower scores on various channels than in previous years.
Good communication with the guests has always been and will always be key to growing your property management business. Owners and PMs need to consider how they’re communicating pre, during, and post-stay to ensure they receive repeat bookings. Furthermore, efficient and warm communication will help you to take bookings through your direct booking website instead of another channel.
Developing a loyal customer base helps create stability but it could also be losing you money if you tend to charge a similar price to the same guest year by year. Instead, consider offering voucher codes to repeat guests.
Speaking of tailoring your offer, the future is all about bespoke experiences. This starts at the listing level. Ensure your profile has a detailed description supported by beautiful, professionally taken images that instantly transport the guests inside the property. Send them activity suggestions in the local area so they’re not only excited about the property but also about all the things that they’ll do once they get to the venue!
Welcoming your guests with a gift basket of local culinary gems is always a great idea. Especially if it's presented as a surprise - this will give the guests the feeling that you went above and beyond to ensure they have a lovely stay. If this seems like a lot to worry about, consider partnering up with an experienced company that can arrange these things for you.
Another way to look at experiences is also in terms of venues themselves. With Airbnb releasing Categories on its platform, we can see that the importance of unique accommodations is on the rise. It's not just about the location anymore - people are looking for tiny homes, tree houses, houseboats, actual castles etc., in order to have an experience unlike any other.
Last but not least, consider your branding experience. Consistent branding throughout the guest’s booking process, both online and in-person service will deliver a higher quality customer experience that your guests won’t forget anytime soon.
New Types of Guests
Finally, start considering catering to a different type of guest - the younger generation of digital nomads who tend to travel solo or with a partner have different needs. They’ll appreciate fast Wi-Fi, an extra computer screen, a standing desk, etc.
Did you know that 17% of all travellers are solo travellers? However, most accommodations don’t offer a discount for a solo traveller even though their default is usually 2 guests. Hence, providing a discount to a solo traveller could be your offer differentiator.
Solo travellers tend to be more focused on cleanliness, safety and hygiene. They also tend to book longer stays - instead of booking accommodation for a week, they’ll book it for three. Meaning they’ll want the comfort that they have at home while having access to a community of like-minded people.
As the STR industry continues to grow, so does the competition. Many big investment companies are buying land and building huge apartment buildings all throughout the US and Europe, hoping to jump on the holiday rental trends. But the good news for STR hosts and property managers is that they also don’t seem to be focused on the customer experience but instead, on revenue generation and growing their portfolio. The more knowledge you have about your venue and your local area is invaluable and will set you apart from big conglomerates.
Beyond comes with free Insights that analyse over a billion data points to provide you with the most accurate information for your particular market. Our Comp Sets enable you to compare your property against your competitors while Beyond’s Health Score is a great indicator of your market performance.
Would you like to learn more? Talk to one of our revenue management experts and they’ll gladly provide you with their top recommendations for your listing.