Can you remember the first time you heard about vacation rentals? From a few billboards, word of mouth and local classifieds the vacation rentals have moved from being just a family run location to more than $170 billion industry.
Let’s start from the point where it all began,
The pre-internet era which relied on advertising, during the 1950s, the vacation rental owners used the newspapers for advertising like the catalogues, real estate agents and mailings. This industry professionally expanded in 1985 with the creation of VRMA. The creation of the internet in 1995 led to the creation of VRBO which allowed the owners to advertise their vacation rental properties. Then there was the establishment of various online marketplaces. By 2015, the vacation rental industry grew to be $85 million, HomeAway alone had around 2.8 million rooms which was more than the 4 largest hotels at that time.
There was a time when travellers used to hesitate to try vacation rentals and on the other hand hosts were hesitant to let strangers occupy their personal space but in the last 15 years everything has changed tremendously the residential property owners who would rent their homes, apartments, condos commercially transformed the vacation rental market into a billion dollar industry.
If we look carefully to the scenario the online travel agencies are playing a major role in leading and building the vacation rental business industry. The growing online travel agents and various collaborative economy platforms are changing the face of these vacation rental properties. The vacation rentals have expanded both in terms of profits and customers.
Now if we look at Airbnb as one of the best examples of vacation rentals,
- The company launched in 2008 and now it is the driving force of the 400 million guests across almost 191 countries around the world
- It’s unique offerings, though initially it was built for individuals for sharing their homes now it also includes property managers as well as boutique hotel owners.
Present Scenario of the vacation rentals:
Looking at the statistics it is predicted that the global vacation rental market is growing and will reach CAGR of 6.89% by 2022. Instant bookings are the growing preferences in the market, the online sites facilitate real-time immediate bookings. The vacation rentals are being preferred over hotels as;
- Filled with space, instead of staying in a single hotel room you get proper space as well as it makes you feel like home, that’s why families usually book vacation rental homes
- The affordability, vacation rentals are usually cheaper than a lot of hotels, you can get a beautiful apartment for a longer period of time in comparatively less cost than the hotels charging per night.
- Sometimes you want to take your pet along with you for vacations but usually, hotels don’t allow it or they might charge a lot but in vacation rentals, you will find a lot of pet-friendly places where you can travel and keep your pet along with you.
- Usually, vacation homes have no hidden charges like other hotels which charge everything with extra taxes.
- Privacy is one of the most important things and you definitely get it in vacation rentals, on the other hand in hotels it’s usually the waiters or the workers disturbing you.
- You get all comforts of home as well as, beautiful views ( well it depends on where your vacation rental is situated) but usually these homes are on the outskirts of the city and have beautiful views.
In 2008 with the launch of Airbnb the whole scenario of homestays changed. The success of Airbnb and HomeAway bought a stampede, it bought a change in the idea of how anyone whether with family or alone can spend his or her vacation widening the scope of vacation rentals in the mind of the consumers but
What can be predicted for the future of these rental properties? How this industry is changing?
- Vacation rentals are growing at a very fast rate because online bookings are now becoming mainstream options. If we have to go somewhere we usually look for online bookings nowadays, whether it is booking hotels online or flights or vacation rentals. Their growth can be estimated at 9.7% annually.
- Increase vacation rental services, change in business practises micro-management tools, marketing services and various other tools.
- Introducing more advanced and smart technologies, like automation, smart locks, burglar alarms etc.
- Changing according to the industry, for example, education along with vacation rental trends will have a positive impact on these companies
Technology will always play an important role when it comes to vacation rentals, automatic machines door lock and maybe the use of AI that is artificial intelligence can play a major role in future, technology can help them being equally preferable or maybe equivalent to staying at hotels.
Consolidation and aggregation taking place like Expedia bought HomeAway, House trip bought by Trip Advisor and more the vacation rentals industry will move more towards the commercialization.
In future, it is a possibility that the basic discrepancy in pictures and the actual vacation rental homes can be removed with the help of advancement in sites because this is the major risk factor in the present scenario that is faced by the vacation rental users.
One of the major change that we can see in the coming 100 years is that now the online travel agencies are heading the business of these vacation rentals and they are bound to give these agencies whatever they charge because their sites get good amount of visitors, in future it is a possibility that the vacation rental owners become independent and they don’t rely on these sites for booking, it can also prove very cost effective for the customers. For example, iRoomi has already started inspiring owners to get their own booking engine or website, in this way the hoteliers can get full profit for themselves.
The rental industry can grow very competitive in the future as you can notice the growing renting out houses on Airbnb, it is a possibility that in future there are not going be a lot of people who are not renting houses on these sites.