Even as the country is opening back up slowly, we are still encouraged to ‘Stay Home, Stay Safe’ when at all possible, seemingly halting vacation travel as we know it. With the many weeks behind and the uncertainty of the times ahead, we will take a look into what the vacation rental industry, and specifically Airbnb, has done to pivot in these uncharted waters and how those changes can spark other adaptations across the rental and real estate market.
Although Airbnb occupancy rate has dropped at least twenty percent in large markets, there are five key vacation rental trends in 2020 that they have deployed that may keep them afloat in the long-term: response, rental terms, courting new clients, prioritizing client needs, and the use of creativity to stay viable.
Short-Stay Market Responds to Crisis
The pandemic has brought out the best of humanity in terms of generosity, selflessness, and kindness. And the vacation rental industry was quick to lend a hand with open arms.
Airbnb created a program called Frontline stays to partner and collaborate with medical organizations around the world to offer those responding to the pandemic either free or subsidized lodging. To date, Airbnb hosts have offered more than 100,000 stays for COVID-19 responders.
They also created a $7.4 million relief grant program for superhosts impacted by the COVID-19 crisis.
In addition to acts of service and financial support, just as the hotel and vacation lodging segments were quick to understand the need for increase cleaning and sanitation, so was Airbnb quick to offer clear and transparent cleaning guidelines.
Extended Stay Rental Terms
The segmentation was once very clear between rental housing and vacation rentals and rarely would they crossover. Just as hotels are pivoting to allow longer guest stays, vacation rentals quickly saw the need to fill their vacancies with longer-term guests as well.
It is not uncommon now to be able to book a reservation for 30, 60, and even 90 or more days on most popular vacation rental websites. These longer stay bookings can attract a new client base.
Airbnb offers the ability to search extended and monthly stays.
Recreation Lodging Expands to New Client Base
With the availability of longer stays, vacation rentals can expand into different market segments as well as increase their client base. Traditionally, traveling nurses would seek out vacation rentals when working on short-term assignments. However, now vacation rentals are opening their doors to others in need of a short term housing solution.
Transition Rental
Selling a home to purchase another is a process that usually involves remaining in the home to be sold while awaiting the closing of escrow on the new home. That balancing act and timing issue can be a struggle when the need is to be in the new location as soon as possible. Vacation rentals on a short-term lease are a great solution as they are furnished and supply the necessities for the day-to-day. This allows a seller to move to the new area quickly without waiting for the sell and/or purchase escrow to close.
Dormroom Alternatives
Some students have been displaced from their school dormitory into a city that might not have the capacity for finding suitable accommodations. For the foreign or isolated student not able to return home, a vacation rental may afford them access to housing without the constraints of having typical criteria such as rental history, good and/or established credit, or any other base-line qualifications many housing applications require.
Quarantine Pads
Sheltering in place suggests staying at home. However, since many have the option to work remotely, they are also taking the opportunity to find locations in less dense and/or lower infection rate areas. Also, some look for those same locations to co-quarantine or group isolate and doing so utilizing a vacation rental. Vacation rental hosts are marketing these escapes as ‘destination isolation’.
Airbnb Anticipates Needs and Market Demand
With an eye on travel and gathering size restrictions, vacation rentals have anticipated the need and market demand as a local resource providing an alternative to home isolation.
Staycations
More people are looking for a quiet escape from home be it for different amenities or just a change of view. Since March, Airbnb bookings for nearby stays increased 17% and anticipate this to continue to rise.
Connections
People will look to places to get together large enough to accommodate social distancing while allowing for connection. Many states and local areas are allowing groups of up to 10 or more people as long as there is room for distancing themselves.
Some are turning to vacation rentals as co-work spaces. With a large enough rental, a few people can come together for companionship and/or collaboration while they work. Others are using large vacation rentals for a small family or social gathering when appropriate for the local restrictions on size and distance.
Airbnb virtual experiences, activities, and learning sessions last approximately 1 to 3 hours ranging from $1 and up, with an average price of $22.
Creativity in Business Provides New Experiences
Vacation rental companies have often collaborated with local area attractions and events to increase worldwide bookings. Just as there has been a pivot to virtual alternatives for work, human connection, and education, Airbnb anticipated the need and market demand for alternatives for leisure and adventure.
Virtual Dating
The pandemic put a damper on dating and Airbnb in collaboration with Bumble have found a solution to bring people together virtually. This mashup doesn’t just have to be used just for romantic connections either as Bumble offers a BFF app to connect with new friends and a BIZZ app for business networking.
Virtual Experiences
Airbnb has been known for offering either stand-alone or packaged lodging with experiences for vacationers wanting to get into the local scene or explore new locations and activities. With foresight, they expanded on that with new online experiences.
Categories include fun for families, great for groups, up close with animals, as well as interests such as social impact, cooking, fitness, history and culture, and music. These are not canned pre-recorded video but live two-way experiences with real people with offerings such as:
Guided Meditation with Sleepy Sheep from the United Kingdom
Meet a Real-Life Shark Scientist in South Africa
Tango Concert with Latin Grammy Nominee in Argentina
Zoom Around Paris with a Parisian
The Secret Jazz Club in the Netherlands
An Evening with a Flamenco Composer in Spain
Online Learning
In addition to the experiences available, Airbnb has mixed in online learning as well:
Origami and the Culture of Japan
Ukulele Lessons with Gold Record Musician – US
The Secret of World Champion Tiramisu – Italy
Coffee Masterclass with National Judge – Mexico
Everything you Need to Know About Podcasting – US
Learn how Guide Dogs are Trained – Canada
Goal Setting with Olympic Gold Medalist – US
Future Projections for the Vacation Rental Market
Although reopening is upon us, even then, there may be cycles of lockdown which will make isolation a new normal. Long term isolation affects mental health, relationships, as well as work productivity, and people will look to alternatives for stress relief and escape.
As long as the vacation market continues to innovate, anticipate customer needs, sets affordable pricing, remain health and safety conscience, the industry should fair well through 2020 and beyond.
Global economic struggles require affordable options for all rental and real estate markets. Other rental markets, as well as other vacation rental companies, might take a page from Airbnb’s handbook for ways to increase revenue and decrease vacancies as longevity will require creativity, flexibility, and resourcefulness.