A panel of industry experts assessed the post-pandemic recovery of the short term rental sector at the annual event in London last week
Short Stay Summit: Sector emerges from pandemic as genuine hospitality contender
The short-term rental sector has almost recovered back to pre-pandemic 2019 levels as people increasingly view holiday lets as an alternative to hotels.
Last week’s Short Stay Summit in London saw 650 delegates attend the annual conference and trade jointly organised by the Vacation Rental Management Association (VRMA), the European Holiday Home Association (EHHA), and the Short Term Accommodation Association (STAA).
Speaking in a panel session on market trends in 2022 Sean Fitzpatrick, chief executive of OTA Insight said pre-COVID optimism was back.
OTA Insight recently acquired data company Transparent which specialises in the short term rental sector because the firm saw a lot of correlation between the sector and traditional hotels.
Fitzpatrick said the deal recognised “travellers are increasingly viewing short term rentals and hotels as the same thing in many ways”.
He added: “This industry has almost recovered entirely relative to 2019. We felt then that the industry was booming, there was so much optimism.
“For us we are really excited to see the overall rend being recovery not just back to 2019 levels but actually exceeding 2019 levels.
“Along with demand we are also seeing occupancy exceeding 2019 levels. Overall it’s a really exciting picture for the industry.”
Vered Raviv Schwartz, president and chief operating officer of property management software provider Guesty, said high occupancy levels are pushing up prices as a lot of new customers entered the short term sector during the pandemic.
“We are now seeing the domestic boom continuing and families preferring vacation rentals. Prices are really booming an people are actually booking ahead of time again.
“There is a large audience willing to pay much more for vacation rentals, and there is more demand and less supply. A lot of our customers are looking for more demand to meet that increased demand.”
Schwartz added: “People are definitely opting in to short term rentals. A lot of people tried Aribnb for the first time during the pandemic and realised they could get a lot more space and they could work and enjoy a vacation at the same time.”
The rise of ‘bleisure’ trips is seeing average lengths of stay triple in some cases and remain higher than before the pandemic, she said.
Julie Brinkman, chief executive of revenue management platform Beyond Pricing, said urban destinations in Europe like Milan, Lisbon and Rome seeing strong recovery.
She said growth trends seen pre-pandemic have returned, even in the US where COVID infection levels are rising but people are being given more choice over whether to travel or not.
In the UK, Brinkman said Beyond is encouraging its clients to review pricing strategies as occupancy levels are below expectations as other destinations start to open up again.
“In the UK traditional lead time has always been pretty short. We were encouraging people to stay calm but what we are seeing now is rates are extremely high.
“That’s great from a revenue perspective but occupancy is falling below what we would expect. We are encouraging our customers to look at their pricing strategy in the summer months to make sure they capture the demand in those areas for their properties.”
Schwartz said Guesty is having to be more creative finding demand for domestic operators in the UK. Before COVID the domestic market accounted for 30% of the total, that rose to 90% during the pandemic but has only fallen back to 66%.
“I think that the trend will continue to be stronger than pre-pandemic but there will be more of a mix,” she said. “We see overall demand being much higher and pricing being much higher.”
Fitzpatrick there was an expectation that pent up demand would see leisure travel rebound but that the sector was seeing a recovery in business travel which is benefitting urban properties.
Schwartz pointed to the digital nomadic-isation of people during the pandemic as the reason for stays lengthening as people were able to mix travelling with their families and friends with work.
“Short term rentals businesses will never go back to where they were. Some have really suffered and some did not make it, but in general the industry benefitted from really going mainstream.”
Brinkman said: “No longer is it a niche but a real segment in travel. What we have learned is people will stall travel regardless of the economic environment.
“You have to stay responsive to that and you do that by keeping tabs on trends. Travel remains pretty resilient…but property managers need to continue embracing technology and what it tells us about shifting demand and the types of experiences demanded by guests.”
Fitzpatrick added: “There has been a dramatic change to step up and meet the demands of the traveller and changing behaviours. We are seeing that in a lot of the numbers.
“That’s helping short term rentals to grow and now you are competing for the traveller more in a broader sense. You are not just competing against other short term rentals providers.
“It [COVID] was a really torrid time for the whole industry but in all that pain the short term rental sector has accelerated and benefitted and can really compete against the broader accommodation industry.”