The Vacation Rental industry has established itself as a force to be reckoned with. With money pouring in from outside sources, and exposure ever increasing, projections are skyrocketing. It's an exciting time, we're all aware. But are we as an industry ready for that kind of rapid growth? What does that growth mean, and what does it look like for individual properties and the property management companies that make up the industry?
TL; DR: Buckle up, it's going to be a wild ride.
Here are our predictions for 2018:
1) Social Media = Money
All property managers are aware that in order to effectively market a listing, you have to be on multiple channels. Sites like Airbnb, Booking.com, and HomeAway are a given, though a massive part of this online exposure is unexplored by many PMCs: social media. Instagram, Facebook, Twitter, are massive nets for bringing in new audiences and bookings. The millennial generation is credited with being the most media centric generation to date. That generation, on average, is 26 years old now. While they've grown up, the media centricity they've come to be know by hasn't diminished, in fact it's become the norm. It's odd not to be on Facebook or Snapchat. If it seems a little weird- we get it. Social media viewed through a 2010 lens is in no way a platform for your business. It's just a bunch of silly teenagers posting selfies, right?
Eh. Not completely wrong.
Social media isn't what it once was- Instagram isn't all about food; Facebook is no longer a 'hot or not' site; Twitter isn't just glorified texting. Social media has become a form of credibility. It's no longer creepy to look up a public Instagram- that Instagram is out there in order to provide information about the subject. A Facebook page provides a platform to communicate with potential guests. Twitter gives your business a voice and personality. The more platforms individuals can research about listings and companies, the better.
PREDICTION: Social media isn't going anywhere. As 2018 progresses, the gaps between successful and unsuccessful listings will become painfully wide. A massive contributing factor will be whether or not social media is being used as a marketable channel.
2) Creating Brands
Going hand in hand with increasing social media presence, property management companies have started establishing themselves as brands, a la hotels. The fun part? Hotels are expected to maintain a certain amount of tedious consistency: there's a bed, a bathroom, and an ice bucket. The end. The beauty of vacation rentals is that no one expects them to be exactly the same. In fact, most want them to be different. That means endless potential as far as branding and marketing goes. Each individual listing can have its own flavor and it's own charm, while still falling under the umbrella of the PMC. For example: a bed and breakfast is going to appeal to an entirely different audience than a chic NY studio, but they can be owned by the same PMC, increasing that PMC's exposure. By taking a leaf out hotels' books and honing in on a listings' prime characteristics, PMCs can widen the scope of their potential bookings.
PREDICTION: As attention to vacation rentals and the vacation rental industry increases, we will start seeing names of well branded PMCs push to the forefront, and in subsequent years those names will be held in the same esteem as Marriott, Hilton, and Embassy Suites.
3) Growing Pains
The fact that the vacation rental industry is "booming" has been driven home again, and again, and again. Though overall this a positive thing, there will be some downsides if not prepared for properly.
With significant growth, comes significant change. Up until this point, the VR industry has been rooted in past process. Occupancy is determined by a physical calendar on the wall, bookings are managed in a spreadsheet, and even when some software is utilized it often requires manual workarounds. Breaks in process, aka wasters of time, lurk in every part of property managers' days. One example: lets say a booking comes in from HomeAway. Obviously, HomeAway doesn't communicate with Airbnb or FlipKey and say, "Hey guys, mark this listing as booked for these dates". That means someone has to go into each calendar on each site and update it accordingly. Second example: let's say an amenity has been added to a listing. In order to update that, someone manually has to add it over and over to all the sites the listing is present on. The examples go on and on.
Though this process may work for now, as demand increases, it will become obsolete. There simply won't be enough time for property managers to continue using manual operations. They will be forced to change in order to remain competitive. This will be an uncomfortable realization for many, and detrimental if ignored.
PREDICTION: The daily process for successful property managers will change radically. Those that do not invest in ways to save time and decrease manual process will not be able to remain competitive in the industry.
4) Software Will Step Up
The growing pains will not be limited to property managers; they will affect every aspect of the industry. Property managers will soon reject any system rife with manual workarounds, because it's not scalable. In order to grow rapidly, the correct tools will need to become available. Any system that remains a player in the industry will contain the abilities to:
a) Significantly reduce, if not eliminate, repeated data entry b) Integrate with multiple channels for centralized distribution c) Scale effortlessly d) Be implemented easily
Especially with the ever increasing popularity of instant bookings, every aspect of managing a vacation rental is going to need to be faster.
PREDICTION: The demand for technology in the industry will skyrocket- and property managers are going to become more vocal about what they need to succeed. Those softwares that are able evolve into a comprehensive support system for PMCs will make a killing. Those that don't understand property managers' needs will fall by the wayside.
5) Beyond Vacation?
Though the word "vacation" has a great connotation to it, vacation rentals are simply short term rentals. There are also plenty of rentals out there whose market is primarily professionals on business trips, or digital nomads working their way across the globe. Many properties don't necessarily fit the "vacation" label. Perhaps due to a lack of exposure, many avenues of the industry are yet unexplored. Not for long though.
PREDICTION: With an increase of exposure will come an increase of inclusivity. More properties that didn't previously identify as "vacation rentals" will realize that they are members of the industry. New avenues of revenue will be explored, and the industry will continue growing and evolving.
What do you think 2018 has in store? Leave a comment below!