Real Estate Investor Michael Eckerman Looks at Top Vacation Rental Trends in 2019
As 2019 unfolds, a set of trends in the vacation rental market has emerged that will not only shape the industry for the remainder of the year but will guide and influence it for several years to come. According to seasoned real estate investor and vacation rental owner Michael (Mike) Eckerman, these trends include:
- Strong Continued Growth
The explosive growth that has characterized the vacation rental market in the last few years shows no sign of slowing down. In fact, both supply and demand are rising worldwide — especially in the U.S., where vacation rental revenue growth is projected to climb 6.4% in 2019, and generate a staggering $14.458 billion in revenue.
Adds Michael Eckerman, who is based in Phoenix, Arizona: “While there are many reasons driving growth in the vacation rental marketplace, the most pivotal are flexibility and value. Simply put, compared to a conventional hotel stay, consumers get much more for far less, and don’t have to deal with traditional limitations like rigid check-in and check-out timings. It’s a win for consumers and a win for property owners.”
- Expectations are Rising
For decades — and long before the rise of platforms like Airbnb, VRBO and HomeAway — most vacation rental consumers had relatively muted expectations that revolved around basics like functionality, cleanliness and safety. However, today’s savvy consumers — many of whom are digital natives — have much higher expectations. They don’t merely want a place to stay for a few days or weeks. They want a hub to anchor their experiences, as they explore and immerse themselves in a new community or country.
According to Mike Eckerman, rising expectations are also driving a massive demand for luxury vacation rental properties here in Phoenix, around the country, and across the globe. For example, we offer our guests white glove service that goes beyond what hotels can offer. Our guests don’t just want to stay somewhere, while they explore the surrounding area. They want where they stay to be a central part of their prestigious, lavish and upscale experience — and we make that happen.
- More Direct Booking
Just as hotels are encouraging guests to circumvent third-party search platforms to get the best rate, vacation property owners are inviting guests to get the best deal possible — and in some cases enjoy some extra services and amenities, like discounts on local attractions, tours, dining, and so on — by booking directly.
Direct booking lets property owners avoid commissions, which in turn allows them to lower rates. But this is not the only benefit. When property owners engage consumers directly, they have the opportunity to build brand loyalty and leverage digital marketing strategies like email and social media marketing, which is critical for repeat business and referrals.
- More and Better Digital Tools to Optimize Guest Experience
One thing that new property owners quickly learn is that they need to be responsive and lean forward to provide a guest experience that is memorable for all of the right reasons. That is where a growing roster of powerful, yet easy-to-use digital tools are entering the picture and filling the service gap. For example, more property owners are using chatbots and other automated online tools to provide prospective and current guests with rapid answers to common questions, and implementing smart home systems to improve comfort, security and convenience.
At the same time, many property owners are using dynamic pricing tools to ensure that their property is priced in alignment with the marketplace, and adjusts to variables such as season, weather, event, and so on.
- Regulations Can Slow Down the Virtual Rental Market — but Not Stop It
The hotel industry is spending millions of dollars a year on lobbying efforts to ban — or at least, slam the brakes on — the booming vacation rental market. However, there is no turning back the clock. Consumers have already embraced the concept of vacation rentals; including millennials, who often travel in small groups to save money, while they have more freedom and fun vs. staying in a cramped and conventional one or two-room hotel.
According to Michael Eckerman, the two biggest themes in regulating vacation rental properties are collecting taxes and enforcing operational standards such as how often a property can be rented and how many guests can stay at one time or during a certain period. As far as taxation is concerned, mechanisms to collect and remit taxes are already in place. And as far as enforcing operational standards are concerned, this is not the dire emergency that the hotel industry is trying to portray.
The vast majority of property owners and guests are compliant and are in fact a boon to the local economy. Yes, there are some bad apples that need to be brought into compliance. But then again, there are some bad apples in the hotel industry as well that have been flouting the law for decades when it comes to things like noise, and allowing, if not outright encouraging and facilitating, illicit activities to take place that are definitely not in alignment with community standards.
The Bottom Line
The vacation rental market is booming, and while nobody has a crystal ball or magic mirror, this much is assured: the growth and popularity of vacation rentals are only going to increase throughout 2019 and beyond. That is great news for current and future property owners, and even better for consumers who, compared to staying in a conventional hotel, will have the opportunity to get much more for far less.
Find our more on Mike Eckerman on mix.com.