In this article, we seek to gain an in-depth insight into some Airbnb predictions for 2022, Airbnb trends that will influence the industry, and why we think Airbnb growth will be big in 2022 based on Airbnb industry analysis.
2021 was quite a fruitful year for short-term rental owners. Airbnb demand went 10% higher than the pre-pandemic rate in 2019. The entire industry at large generated about 40% more revenue due to higher Average Daily Rates (ADR) levels. Bear in mind that all this occurred with 10% fewer listings available.
Check out our video below to learn how the Airbnb model can benefit you as a real estate investor:
With that in mind, what will the 2022 market look like? There’s already much anticipation for what the year has in store for Airbnb owners. The vacation rental market has gained much momentum in many markets around the world. While there may still be some challenges, the promise of the new year has everyone excited.
What Airbnb Trends Will Influence the Short-Term Rental Market in 2022?
Flexible Cancellations
Did you know that vacation rentals with flexible cancellation options generate up to five times more bookings?
The Covid pandemic changed our lives in so many ways. As for travelers, they continue to feel the effects of the uncertainty surrounding travel. As such, they want to have the flexibility to cancel their bookings with an option to get a full or partial refund whenever their plans change.
This flexibility to cancel bookings puts many property managers at great financial risk. However, many online traveling agencies have solidified their policies and standards surrounding guest-friendly booking cancellations.
Property managers in 2022 will have to be innovative and find more ways to handle last-minute cancellations. One way to do this is by filling them in with last-minute bookings.
Vacation Rentals Will Keep Gaining an Edge Over Hotels
In 2022, the competition between short-term rentals and hotels will be at an all-time high. Vacation rentals will continue to win a significant market share from other hospitality options. This can largely be attributed to how Airbnbs are changing how people view the places and spaces they travel to and live in.
Another reason for this is that many travelers view vacation rentals as much safer options for their travel. Many travelers also prefer the variety and flexibility that comes with Airbnb rentals compared to hotel rooms.
While hotels may also experience a complete turnaround and sky-high bookings, this won’t be to the detriment of Airbnbs. Remember that Airbnbs have now become a mainstream mode of accommodation for travelers.
As such, we can say that both hotels and Airbnb rentals will benefit from the increase in demand and high travel activities. We can expect to see more convergence of both industries. For example, many hotels are now offering apartment-style options in their accommodation portfolios. On the other hand, short-term rental owners are also offering digital concierge services and upsells that are popular with hotels.
Business Travel Will Rebound
Many experts had predicted that business travel may take many years to recover to the pre-pandemic levels. However, 2022 may be the year when we witness business travel finally taking off.
Many more people have stayed at vacation rentals and continue to make Airbnb rentals their choice of accommodation compared to the pre-pandemic era. For this reason, Airbnb may get a fair share of business travelers that may not have considered vacation rentals before.
What does this mean for short-term rental owners? They’ll need to start making sure that their rentals are ready to accommodate business travelers. Property managers in 2022 will have to provide amenities that are friendly and popular with these types of travelers. This includes amenities such as Wi-Fi and easy transportation. Properties that can accommodate more than one guest at a time will be preferred more.
Corporate guests can be really instrumental in helping short-term rental businesses regain their foothold. One reason for this is that corporate guests can book rentals for a much longer period.
Consolidation Will be On the Rise
In 2021, we experienced a series of acquisitions and mergers that reshaped the industry. Besides, many property management startups and firms around the world received considerable injections of capital to fund their growth.
The rapid consolidations we saw will continue in 2022. Due to the additional capital, the property management firms will continue to acquire more inventory to meet rising customer demands. They’ll also buy smaller hospitality brands, update the design in the units and introduce technology and automation to their operations.
Rural and Outdoor Destinations Will Continue to be Popular
Travelers’ behaviors have changed. Destinations that may not have been that popular in the pre-pandemic era are now better positioned to attract guests than others.
International travel and overall short-term rental reservations continue to recover slowly. However, longer, domestic and low-touch stays will generate core revenue for short-term rental owners.
If you seek to start a vacation rental business in 2022, pay attention to rural destinations. Larger houses in rural destinations are experiencing more demand and higher ADRs compared to 2019.
2022 will also be a great year for destinations with outdoor offerings.
Sustainability Will Continue to Rule
Increasing sustainability in the hospitality and tourism sector has been a major focus since the pre-Covid era. It became even more pressing during the pandemic.
The short-term rental industry is still growing. This means that vacation rental owners have even more responsibility in the fight to save our planet. More guests are looking for sustainable vacation rentals.
These Airbnb trends will continue to shape the industry in 2022.
What Challenges Will Airbnb Rental Owners Face in 2022?
Now that we’ve identified some Airbnb trends that will shape the market in 2022, let’s look at some challenges that property managers and hosts will have to face.
Providing Impressive Communication
Property managers in 2022 will need to go over and beyond to make sure their guests have all the information they need to book and ensure their stay is a breeze.
Think of how planning a trip is hard. You don’t want to get any surprises while on your vacation or business trip. Every traveler wants to know more about a listing even before they can start their journey. Do the same for your guests.
How can you improve your communication? Firstly, you need to shine a spotlight on your short-term rental and amenities in your listing. Get a professional photographer to take high-quality photos and videos.
Secondly, ensure your guest communication is top-notch. Guest communication is essential in ensuring your guests enjoy their stay and book with you again. Promptly respond to their queries and always be available to sort any issues. Automate this process to make it streamlined. Artificial intelligence with chatbots ensures there’s 24/7 communication.
These factors will make you stand out from other hosts.
Adherence to Legal Regulations
Property managers are not new to comply with legal requirements and regulations. However, you’ll need to pay more attention in 2022. This is because the increasing legal regulations will keep property managers busy in 2022.
With this in mind, actively taking part in policy conversations with the government and engaging policymakers is going to become more important than ever. Remember, property managers have an active role to play in helping their communities navigate these conversations.
There are several ways you can play your part. For example, you can:
- Join hands with advocacy groups
- Dedicate time and money to collect data that will give lawmakers facts to help them make realistic decisions
- Leveraging partnerships to educate, align, and mobilize individual short-term rental owners.
Capturing Demand
One of the major Airbnb trends is that demand is rising. This is great news for many vacation rental owners. However, it also presents a challenge. How do you actually capture the demand, especially knowing that supply in some markets is also on the rise?
As such, it might be a challenge driving demand across all stock types in 2022. The key will be to embrace a proactive approach and optimize your Airbnb rental strategy to align with market conditions.
If the demand shifts in your market, remember it still exists in all segments. You just have to position yourself to capture it. Also, ensure that your prices are aligned with market competition, and demand every day and across your property types and locations. This is one way to increase your revenue in 2022.
Optimizing Revenue
One of the biggest challenges for short-term rental owners in 2022 will be how to get more money for the same booking on their properties. The rising distribution costs with falling margins and the rising demand for a wide range of services for customers and owners will also be another challenge for property owners. With the continued market volatility, revenue managers will only have their hands full in 2022.
This could be a complex task that will require you to understand your market and the quality of your listings so that you can improve your ranking and conversions. You can only do this by basing your decisions on Airbnb analytics and insights. These insights help you come up with a data-driven short-term rental strategy that will be essential in 2022.
Why Vacation Rental Business Will Be Big in 2022
The pandemic period was a tough time for the short-term rentals industry. The stay-at-home protocols to avoid the spread of Covid and curfew lockdowns brought the hospitality and travel industries on their knees.
However, we’ve seen that various Airbnb trends and factors have made vacation rentals one of the brightest spots to invest in real estate. Let’s explore some other reasons why we predict short-term rentals will be big in 2022.
Flexible Work
In the pre-Covid era, most people only traveled once or twice a year. Full-time work requirements made traveling and staying away from home for a long period quite impractical. The pandemic has brought a lot of flexibility into our lives, and work hasn’t been left behind. As a matter of fact, it’s looking more and more impossible to go back to the past. Why?
As of December 2021, demand for office space had gone below 2019 levels to 39%. Also, of all companies and firms requiring their employees to go back to their physical offices, only 15% don’t offer a hybrid arrangement of any kind. The majority of employers have switched to remote work.
This adds to the Airbnb trends and is a great opportunity to broaden our mindsets on travel. The shift towards travel as a lifestyle has even inspired changes and upgrades on the Airbnb platform. This trend is not just a passing cloud. It’s here to stay.
What does this mean for short-term rental owners? Expect to continue seeing longer stays. Travelers are now seeking a true “home away from home” experience, which they can barely get from hotels. The less turnover also means less work for property managers and vacation rental hosts.
Unique Opportunities
New features on the Airbnb platform are making it easier for guests to find specific types of properties they’re looking for. The site has even added a category for offbeat homes. This is special since there’s been a rise in demand for unique homes since the pandemic began.
Why did people prefer unique homes in the middle of a pandemic? Because they were restricted from traveling. They had to look for unique experiences that offer adventures within their own communities or cities.
Just like flexible work arrangements, this Airbnb trend looks like it’s here to stay. According to AirDNA, all 10 of the fastest growing property types they identified for 2021 offered some sort of unique experience. The property types included:
- Tiny homes
- Yurts
- Farm stays
- Treehouses
If you’re thinking of becoming a vacation rental host in 2022, think of offering an experience that can’t be easily replicated in a hotel. This is a unique opportunity for you to think creatively. Offbeat Airbnb properties you can consider include:
- Igloos
- Caves
- Themed properties
- Historically-rich properties
For example, you can list a home that was previously a celebrity’s “crib” or an alleged haunted house.
Another trend we witnessed in 2021 is the demand for larger houses. Many families or groups that had to stay apart in 2020 came back together in 2021 and wanted some space to create something special.
Since many people have now discovered what truly matters to them, you can expect to see this trend continue as get-togethers become a new tradition for families. Keep this in mind if you consider venturing into short-term rentals and can afford a large property.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Should You Buy Airbnb Investment Property in 2022?: Airbnb Trends Summary
While the pandemic and government response to it may make investments in 2022 a wild card, you can see there year has pretty much exciting things for real estate investors. The recovery has been swift and the Airbnbs show that there’s only going to be an upward trajectory.
If you think investing in short-term rentals in 2022 looks like a good prospect, then you might want to look at Airbnb data analytics. The best place to find these is on Mashvisor Property Finder. This platform not only helps you discover great real estate investment opportunities but also find top-performing Airbnb properties for sale as well as know Airbnb return on investment.
The platform allows you to access the following metrics:
- Number of Airbnb listings
- Airbnb price statistics
- Monthly Airbnb rental income
- Average Airbnb occupancy rate
- Average Airbnb cap rate
- Average Airbnb cash on cash return
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