As we wind down 2019 and rev up for 2020, we’re very excited for all the promise next year brings. The short-term rental industry has skyrocketed in recent years in regard to basic processes and marketing. That said, we anticipate many more changes to come in 2020. Take a peek into our crystal ball to see what we believe are going to be the vacation rental trends in 2020.
1. Unexpected places will become more popular destinations
As short term rentals continue to rise in popularity, visitors have easier access to some cities making destinations out of places that may have previously been considered “uninteresting”. For example, according to Airbnb, Milwaukee, Wisconsin, came in first place as the fastest-growing destination for vacation rentals in 2019 with a 729% year-on-year increase in bookings.
2. Rental platforms like Vacasa will start to give HomeAway and Airbnb more competition
Over the past four years, Vacasa’s revenue has grown by nearly seven times and is projected to nearly double again in 2020. This past September, Vacasa inked a deal with Google that will put their properties on display in Google search results. That’s going to put some pressure on the two big guys.
3. Global M&A activity will continue, gobbling up little players
Vacation rental companies are ramping up their merger activity. In May, Altido was created from the merger of four short-term property management companies. It’s on track to process just under $65 million (£50 million) in gross bookings this year from its 1,700 units in Europe.
4. The push for direct bookings will get even more intense
A look at Expedia’s Q3 2019 earnings showed that they can no longer just rely on SEO for revenue. Also, Boostly just launched its Book Direct Map, which acts essentially as an OTA, letting guests book direct. We expect more options like this in 2020. The growing competition for vacation rentals makes the need to keep money on hand more critical for the owner. Because of this, we see an increase in direct bookings happening.
5. Home automation will continue to become more popular for rentals
Home automation makes it easy for owners to more efficiently manage the home. This includes virtually anything that an owner can control remotely: Smart door locks, smart fire alarms, remote temperature control, Bluetooth lighting, blinds, security systems all can be managed without being onsite. This gives the owner more power in regard to utility bills, security issues and more.
6. Property owners will get more social media marketing savvy
According to the Global Vacation Rental Market 2020-2024 report, “social media campaigns are helping vendors track customer feedback and reviews, create new offerings, understand the latest trends and interests, analyze customer experience, and track brand ratings and service reviews”. There’s no doubt that successful property owners need to be Instagram, YouTube, Facebook and Pinterest savvy. We anticipate an increase in the use of social media tools, including investing in outside consultants.
7. Even more government regulations will be imposed
2019 saw a big increase in local legislation regarding short-term rentals as local municipalities worked to impose taxes and restrictions in order to “keep the local culture local”. We don’t see that slowing down in 2020, but we do hope that the opposition to these proposed laws will get more vocal. So, education is critical on the local level and we encourage property managers to take an active role in educating their local politicians about the benefits of short-term rentals.
8. Increased marketing focus on Generation Z
Just when we think we finally understand how to reach Millennials, Gen Z comes into the picture. The oldest of this group will turn 23 in 2020, which means full-time jobs, careers and more discretionary income. Studies show that Gen Z is a deal-driven, frequent traveler who has a “passion for activities and bucket-list experiences.” So, as more Gen Zers enter the workforce a myriad of opportunities for travel marketers opens up. But it better be digital marketing. “As the first fully digital generation, Gen Z travelers can be influenced by social media and advertising, especially appealing images and deals, so marketers should implement a content-rich, mobile-friendly, and multi-platform approach to successfully reach this valuable audience.” says Lisa Lindberg, VP of product management, Expedia Group Media Solutions.
So there you have it: Our predictions for vacation rental trends in 2020. We think you’ll see some relevance in these ideas over the next 12 months. We look forward to reviewing how the industry has changed as we look toward 2021.