Short term rental properties are, without a doubt, very lucrative. The short term rental market has actually had rapid growth in the last decade until this year. In the wake of the COVID-19 pandemic, there have been some devastating effects on the industry.
Related: Airbnb Data Reveals the Impact of Coronavirus
Amid global travel restrictions, there have been a lot of changes in the market so far and the market continues to evolve. Some short term rental market trends have had a huge impact on how business is done. Therefore, if you are a real estate investor who wants to increase profits in 2020, keeping up with the latest trends in the market is important.
Here are some of the latest and hottest short term rental market trends for 2020 that you should keep an eye on if you want to achieve success in this niche.
1. Enhanced Cleaning and Sanitation Requirements
In the wake of the coronavirus outbreak, travelers have had an increased sense of awareness when visiting new spaces. More than ever, cleanliness has become a big concern for everyone looking for short term accommodation. Consequently, short term rental platforms have enforced new rigorous cleaning and sanitation guidelines to prevent the spread of COVID-19. In an effort to build off of its strong record of cleanliness, Airbnb has developed a New Cleaning Protocol for Airbnb hosts. It includes standardized guidelines for cleaning and sanitation such as the use of personal protective equipment, the use of approved disinfectants, having a 24-hour wait period between guests, and more. Airbnb guests will also be able to filter searches for hosts who have enrolled in the program.
Many Airbnb hosts are also putting an effort to showcase their high standards of sanitation and cleanliness to make their potential guests feel more comfortable and boost their bookings.
Related: Airbnb Hosts Feeling the Effect of the Coronavirus
2. Conversions into Long-Term Rentals
Another significant trend that has characterized the short term rental industry in 2020 is the conversion of short term rentals into long term rentals. The coronavirus pandemic has resulted in worldwide travel restrictions and, as a result, reduced demand for short term vacation rentals. This has forced hosts to get creative with their properties so as to decrease vacancies and stay afloat.
Many hosts are now making their properties available for longer stays so as to attract a new client base. Long term rental properties are also less expensive to maintain, making them an attractive option for real estate investors in these hard economic times. Generally, long term rental properties are considered safer investments. By transitioning their short term rentals from days to months, property owners are able to recoup the lost income and retain the investment property.
If you look at current short term rental market data, you’ll notice that there has been an increase in mid-term and long-term stays across the industry. Many hosts are even offering huge discounts for longer stays, sometimes as high as 50% or more.
If you are an Airbnb host who wants to convert your property into a long term rental in these uncertain times, it’s important that you first run the numbers to ensure that you are making the right decision. Be sure to use Mashvisor’s Investment Property Calculator to access traditional and Airbnb data and analytics.
3. Bookings Are Higher in Remote Areas
Another short term rental market trend for 2020 is the increased demand for short term rental properties in remote areas. This may sound confusing since the short term rental market is generally on a decline. However, there’s a reason.
In response to the pandemic, Airbnb hosts are taking the opportunity to market their rental properties as “quarantine pads” where people can go to escape from coronavirus hot spots. Social distancing in dense cities can be a big challenge. One way that people are trying to make it more bearable is to isolate themselves in short term rentals away from busy cities. This includes mountain towns, lakeside getaways, and beachside destinations. Such areas tend to have lower COVID-19 infection rates. Many of such short term rentals are also being used by medical professionals and other frontline personnel for self-quarantines.
As a result, short term rentals in remote and less dense areas have had an increase in bookings. On the other hand, short term rental properties in urban markets have seen a decline. If you want to know about the best cities for short term rental properties in 2020, you need to conduct a thorough Airbnb market research. You can do so easily by checking Mashvisor’s short term rental market data.
Related: How to Find the Best Area for Airbnb Investment
4. Hosts Are Charging Less
Over the past few months, one of the short term rental market trends that is very evident is the drop in nightly rates. Following the travel restrictions and flight cancellations, the demand for short term rentals has decreased considerably. Many hosts are struggling to get guests consistently. In an effort to reduce their vacancy rate and cope with the current situation, slashing prices has become a major trend in the short term rental market. Regardless of the industry, dropping prices can be an effective strategy to attract more clients.
With the current economic struggles, most guests are looking for the most affordable short term accommodation options. Therefore, hosts with the most competitive prices are the ones who are able to get the most bookings and boost their rental income.
Related: How to Invest in Real Estate with $5,000
The Bottom Line
Amid the travel restrictions and vigorous social distancing guidelines that have come up following the spread of the novel coronavirus, the short term rental market has been one of the sectors that have been worst-hit. While many Airbnb investors are feeling the impact of the coronavirus in the short term rental market 2020, very few are able to thrive through it.
As countries begin to open up and travel slowly begins to return, Airbnb investors remain optimistic that things will change for the better. Meanwhile, real estate investors should learn how to adapt to the current situation instead of throwing in the towel. And what better way to protect your business and stay viable than to be consistently on top of the latest trends?