Any profession, industry and business has a myth. These myths are assumptions and generalizations, often made due to misconceptions or an incident that occurred once and went viral on social media.
The vacation rental industry is especially prone to these myths. As it is a recently developed business, many aren’t fully aware of what exactly it entails. Some of these misconceptions even frighten those who are deciding to start in this sector. Here are some of the biggest myths about vacation rentals you’ve probably heard before:
1. “VACATION RENTALS ARE UNFAIR COMPETITION TO HOTELS”
Ever since the vacation rental industry emerged, the competition between rentals and hotels has intensified. In 2018 in Paris, France, the main trade group for French Hotels sued Airbnb for unfair competition and for lacking the registration numbers homeowners are required to have to list their property.
However, vacation rentals are just part of the advancing and evolving technology, similar to Uber. Nowadays, just like you can ask a stranger to drive you, you can stay at someone’s place. According to a recent study, in some cities when hotels are fully booked, especially during the peak-season, Airbnb expanded capacity for rooms. In the US, the 10 cities with the largest Airbnb market, the entry of Airbnb resulted in 1.3% fewer hotel nights booked and a 1.5% loss in hotel revenue. Therefore vacation rentals actually provide accommodation for travelers when hotels can no longer keep up with the demand.
2. “Vacation Rentals are harmful for the economy and community”
As vacation rentals are on the rise, so are those who oppose them. Neighbors get angry, anti-vacation rental associations emerge, all because they think that it has damaging economic impacts and ruins neighborhoods. This has been demonstrated in Hawaii, where as of August 2019, the number of vacation rentals allowed is being reduced. In Madrid, Spain, an anti-vacation rental group went around sabotaging automatic locks by putting glue on them so that they can’t be opened.
However, tourists who stay in vacation rentals are actually investing in the local economy by shopping, going to bars and restaurants in the area. A recent study in San Diego showed that travelers staying in a rental spent $86.4 million in their leisure time. Furthermore, according to Airbnb, 74% of properties are outside the main hotel district area, meaning that without vacation rentals, the local companies wouldn’t be able to benefit from tourism.
Lastly, some individuals need extra income by renting out a room in their apartment. 81% of hosts on Airbnb share the home in which they live in, therefore vacation rentals aid the community.
3. “VACATION RENTALS INCREASE HOUSE PRICES”
In Barcelona, Spain, one of the most visited cities in Europe, and where vacation rentals have a huge presence, rent decreased by 5.9% in the last year. Barcelona is no more expensive than other major cities in Europe.
What’s more, many vacation rentals are situated away from the city center, for example in the mountains or by the beach. Tourists who want to stay in a hotel will do so as they are accustomed to the experience a hotel offers. For travelers who prefer to stay in a home and to live more like a local opt-in for vacation rentals.
4. “RENTING DOESN’T PAY OFF”
With the initial investment of buying a new property or renovating a current home, the amount of competition that exists today and the possibility of having troublesome guests, fears arise. And with these concerns comes the myth “it’s not worth trying. The point is, if your vacation rental business is successful, the profits can be much higher than a long-term rental property. Although some owners end up in debt because they didn’t get as many bookings as anticipated or problems occurred along the way. That’s why it’s extremely important to have everything planned out beforehand, be sure you can afford an investment like this, and also devote time to the business.
Besides, the key is not only to offer a good product but also to know how to sell it. In other words, you need to market your vacation rental. No matter how beautiful your property may be, if no one sees it, you will never receive visitors.
5. “Vacation rentals aren’t as safe as hotels ”
Hotels are like large chain stores, their brand often provides security to customers. Although an unknown business can give travelers uncertainty, vacation rentals can offer guests a strong sense of security. Many vacation rentals have a formal contract that specifies their obligations and insurance, protecting the owner, the guest and the property. In addition, Airbnb provide smoke and carbon monoxide alarms to hosts listing on their site.
6. “No one responds to the guests’ problem”
Contrary to what is believed, vacation rental owners act in the same ways as a hotel manager does. And that’s precisely what this type of accommodation provides: a special bond. A vacation rental owner will not only respond to and solve their guests’ problems, but also will improve their stay by providing recommendations, welcome books and gifts, uplifting the overall guest experience. On the whole, there is more of a personal touch and a closer relationship between the host and the guest.
Not everything you’ve heard so far about vacation rentals is true. Don’t be influenced by these myths or judgments from certain groups. Knowing the full ins and outs of this business will allow you to open the many doors in this business.