Read TurnKey’s take on Phocuswright’s preeminent study. This study presents an analysis of nearly a quarter of a million online rental listings in vacation rental markets across the country and aims to understand key trends across the online rental marketplace.
At TurnKey, we are capitalizing on these trends with our innovative business practices, and homeowners should too. Here are 5 key takeaways from the study that homeowners should know.
1. U.S. Travel industry is growing modestly, and the rate of vacation rental use is growing even faster as vacation rentals become more mainstream.
The amount of money spent on travel has steadily increased since 2012. Over the past 5 years, U.S. dollars spent on travel have increased 30% with a rate of growth of 5% for the past 2 years.
Part of the growth of U.S. travel can be attributed to an increase in travelers using vacation rentals. Less than 10% of U.S. travelers had used a vacation rental in 2010. Usage increased to 34% in 2015, and, judging from the trendline, more people will continue to try vacation rentals for the first time.
While the rate of growth for the total travel market has remained steady at 6%, the use of private accommodation, a.k.a. vacation rentals, has witnessed a growth rate up to 2X the total travel market.
What this means for vacation rental homeowners: It’s a great time to own a vacation rental since more travelers are choosing private accommodations. As the percentage of U.S. travelers using vacation rentals increases, there are more opportunities for homeowners to generate revenue. This industry isn’t going away anytime soon.
2. Booking behavior is undergoing massive shifts including shorter trips, tighter booking windows, and increased online booking.
The average length of stay is getting shorter: 25% of trips were 3 nights or less in 2012 versus 38% of trips in 2016.
In 2012, 17% percent of vacation rental travelers booked less than 1 month ahead of their stay and that percentage increased to 52% in 2016.
Over the past 4 years, the percentage of customers booking online has increased from 53% to 77%.
What this means for vacation rental homeowners: Since online booking habits of vacation rental travelers more closely resemble that of hotel users, you can generate more bookings and revenue by keeping your availability calendar updated, accepting online bookings and payments, and reducing minimum night stay requirements. You may also need to adjust your pricing strategy because of the tighter booking windows. For example, you may not be booked 45 days in advance, but that’s not necessarily an indication that you should reduce your rates.
3. The travel industry is experiencing the rise of the “New-Gen PM” which leverages technology to deliver services that consumers want.
TurnKey is at the forefront of “New Gen PMs”. Here are a few things we do that epitomize this trend:
We list our homeowners’ properties on over 20 of the most popular listing sites to reach 90% of travel customers.
We’ve embraced cutting-edge technology such as secure digital locks, noise monitors, and guest screening to help secure and protect our homes.
We deliver full-service property management for an industry-low commission. Our processes are transparent, and information about each home is available to the respective homeowner at any time through our Owner Portal.
We provide a consistent, hotel-like experience by delivering easy check-in, easy online booking, exceptional housekeeping, and 24/7 guest support at high-end accommodations. 98% of all guests rate their experience with TurnKey as 4-5 stars.