Over the past decade, short-term rentals have spiked in popularity among investors and travelers alike. It's believed that the industry will continue to grow in the coming years. Here are the latest trends and what the future is expected to bring.
New Regulations
To combat some of the challenges presented by unregulated short-term rentals, some cities have been introducing new regulations. New York, for example, recently passed a law that requires hosts to register with the city. In Los Angeles hosts must register and pay a fee to the city. Hosts can only register one property with the city at a time and the property must be their primary residence (where they live at least six months out of the year). Honolulu has outlawed rental stays under 90 days in residential areas. Other cities are curbing the number of rentals by capping the number of licenses they issue and/or imposing new taxes on vacation rental properties.
The goal of most of these regulations is to strike a balance between supporting tourism and supporting the local community of permanent residents. The industry will continue to shift and adjust as more cities set their own regulations in the coming years and we begin to see the effects of these changes.
Increased Demand for Upscale Rentals
While short-term rentals are popular across the board, luxury short-term rentals are experiencing the highest demand right now. Travelers are looking for a more personalized living situation with premium amenities to make their short stay extra comfortable. Premium location is another in-demand feature, as short-term renters value having convenient access to nearby attractions and entertainment.
Alternative Accommodations on the Rise
Travelers are on the lookout for unique accommodations that extend beyond the traditional hotels, motels, and single-family rentals. Short-term renters are showing increased interest in glamping tents, tiny homes, yurts, and other out-of-the-ordinary shelter options. We’re likely to see more of these unique rental options hit the market in the future.
Greater Focus on Sustainability
Travelers are becoming increasingly conscious of their impact on the environment, which is why more of them will look for sustainability in short-term rentals. Around 76% of travelers want sustainable accommodations. Some examples of sustainable home features include low-flow toilets or showerheads, energy-efficient appliances, and smart lighting.
Importance of Guest Experience
Online reviews are more important than ever for rental hosts who want to maintain steady bookings. A higher percentage of guests are relying on customer reviews when making their booking decisions, and sites like Airbnb use reviews in their search algorithms.
For hosts, this means that personalization and providing an exemplary experience are crucial to maintaining a successful short-term rental. Providing local recommendations, helpful tips, and personalized notes can go a long way in winning over guests and boosting ratings.
Additional Growth
Short-term rentals have a bright future. People are still very interested in traveling, and most signs out of the short-term rental industry indicate that growth should continue for the foreseeable future. If you're currently involved in the industry or want to start renting out your home, you can earn high returns if you have a unique property or are in a desirable location.
Market conditions are known to change quickly, however, which is why property owners should remain adaptable to keep their rental units successful in an ever-changing market.
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