Who has time for industry blogs, tweets, TikTok reels or podcasts when you’ve got a vacation rental (or ten…) to run? No-one. That’s why we bring you: The Lodgify Lowdown – a monthly briefing with carefully-chosen industry highlights (and lowlights) and why you should care. Let’s cut to the chase with this month’s news.
Reasons for vacation rental optimism despite U.S. economy fears
The Story
With a dip in the gross domestic product (GDP) and tumbling stock markets, the U.S. economy looks like it may be starting to wobble, but no need to go into a flat spin yet – vacation rentals are good for now.
So, how much pressure is the economy really under?
Well, the GDP is down mainly because of a rise in exports and a decrease in government spending, according to the latest AirDNA report. Nevertheless, spending on personal consumption (goods and services) was actually up 2.7% during Q1, the highest rate of growth in the past three quarters. The U.S. also added nearly 500,000 jobs in April, which should put the brakes on the recession in the short-term.
Why should I be optimistic about short term rentals, though?
According to AirDNA, demand for short term rentals in the U.S. is up 25,3% year-over-year and Average Daily Rates (ADR) are up 11.2% YoY. Meanwhile, available listings reached 1,25 million, up 19.5% Y0Y from 2021.
So, is it all good news then?
Er. Not quite. Some cracks are showing. The biggest weakness is declining occupancy – down 1.7% YoY to 60.2%. Nights booked were down 3.6% YoY to 17.4 million.
Why is occupancy down? I thought you said demand is up…
The drop in occupancy is mostly visible in destination/resort markets, according to AirDNA, as well as in small cities. The problem seems to be an increase in the nightly supply of listings in these places and not a drop in overall demand.
Also, check out our own Q2 2022 Summer Forecast.
And also this…
OMG it’s the Airbnb show!
Airbnb stole the show this month with a dizzying display of headlines.
First, there was ‘the biggest change to Airbnb in a decade’ which introduced a whole new way for travelers to search for holidays on the platform. You now no longer need to know where you want to go, but can browse the site according to 50 plus categories, including OMG!
What is OMG?
One of the most talked-about new Airbnb categories, which features a selection of rentals across the globe that literally leave you gobsmacked.
Was that it?
Nope. They also announced Split Stays, which allow travelers to link two bookings in the same area in one trip, and a few other less talked about things.
So, how did the changes go down?
Well, the new search function set off a cat among the pigeons in host forums with some hosts saying their rentals no longer featured after the changes, but the jury is still out on how this update will affect the majority in the long run. Both hosts and travelers like Split Stays so far though.
Read our earlier post for more info on what the Airbnb Summer Release means and what to do to make it work for your business.
Is there more?
Yup. Airbnb also announced record results in May as Q1 revenue of $1.5 billion grew 70% Year over Year, exceeding pre-pandemic Q1 revenue by 80%.
On the downside, Airbnb Inc. announced it will stop representing short-term rental properties in China and focus its business there on serving Chinese tourists looking for lodgings abroad. Airbnb joins other internet companies pulling out of China due to local competition and strict regulations.
How sexy are vacation rentals?
If you read only one article this month, make it this one.
Everyone is a wannabe vacation rental host as revenue is set to overtake $81 billion in 2022, but it may not be as sexy, or easy, as others may think, says Matt Landau in Phocuswire.
‘Character’ is what travelers are after and this fuels a cottage industry of property owner-managers, who want to deliver ‘character’ rentals on a professional scale, and many are doing a fantastic job! But, how easy is it really to scale ‘limited edition’? Not that easy, says Matt, but hey, it can and is being done! Check out his latest docu-series called ‘Homerunners’. Matt goes behind the scenes to explore how some hosts are doing just that – scaling vacation rentals and retaining their special character. Be inspired!
Are you ready to accept Bitcoin payments?
It was bound to happen. Luxury vacation rental platform Swish has partnered with licensed Estonian cryptocurrency exchange NordikCoin to offer Bitcoin as a recognized payment option.
Will this trend take off?
Who knows? In the luxury market, maybe. At Swish, a typical lease is between $10,725 and $107, 250,000 per week. These large transactions could take days to clear and create big transaction costs for clients. Bitcoin makes a lot of sense, as it offers fast, seamless and international payments.
Let’s hear it for all those identifying as women!
We love that women (read: all those identifying as women) travelers, who let’s face it, make up 80% or something of the total, now have their own travel club. Golightly is an international home-sharing network and vacation rental marketplace. All members are carefully vetted to guarantee security. Only members can list or book properties, but men can be guests (if your host is cool with this).
That’s a wrap!
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