Council Post: 6 Trends That Short-Term Rental Property Owners And Managers Should Expect In 2023
As the short-term rental industry continues to grow and change, here are six predictions for 2023.
Ali Nichols: Co-founder & Co-CEO of Getaway brings an innovative approach to short-term rental real estate investing.
getty The short-term rental industry has exploded over the last couple of years, experiencing peak new supply added and rental demand alike in 2022. As the industry continues to grow and evolve, it's important for property owners and managers to stay up to date on the latest trends and developments. Here are six short-term rental trends we should anticipate in 2023. In recent years, there has been a growing push to regulate the short-term rental (STR) industry. For example, Dallas, a traditionally business-friendly city, just implemented a new regulation banning all STRs in single-family residential zones. As cities and towns grapple with the impact of short-term rentals on local communities, more rules and regulations to address issues such as housing availability, zoning and safety may come in 2023. This doesn't mean investors and property owners will be out of luck. Increased regulations just add an extra level of complexity to operations. So operators must be willing to stay up to date with local policy and work with municipalities.
Traditional hotels and motels are no longer the only option for travelers. In 2022, Airbnb hosted a competition, giving away $10M to hosts with the most unique properties, proving that new, unexpected experiences are the future of short-term rentals. I anticipate more alternative short-term rental options, such as tiny homes, yurts and glamping tents, hitting the market in 2023. As travelers look for different or more-authentic accommodations, traditional hotels and basic short-term listings may encounter more competition. Technology plays a big role in the short-term rental industry. From online booking platforms and property management software to smart home technology and virtual reality, technology makes it easier for property owners and managers to operate and market their rentals. Because technology is always evolving and innovating, we should expect to see newer tools emerge for the short-term rental space in 2023. 4. Increased Focus On Sustainability
As travelers become more environmentally conscious, we can expect to see a greater focus on sustainability in the short-term rental industry. In Booking's latest sustainability survey, 81% of travelers say they want to stay in sustainable accommodations. So property owners and managers will need to consider environmentally friendly features and practices in their rentals to meet traveler demands. This may include installing energy-efficient appliances and low-flow showerheads or introducing recycling programs. As travelers are likely to seek out short-term rentals that align with their own sustainability values, it'll also be important for property owners and managers to communicate their sustainable practices and efforts.
- Greater Competition
The short-term rental industry is becoming increasingly competitive. For example, AirDNA states that 54% of Airbnb's short-term rental listings came onto the market since the start of 2020. While things will likely begin to stabilize in 2023, demand will stay strong.
As more listings enter the market, it will be important for existing players to differentiate themselves with unique, compelling rental experiences. This may involve offering special amenities, like unique interior design, on-site gyms or access to rental vehicles; showcasing local attractions and activities; or providing exceptional customer service. To stay competitive, property owners and managers will need to continuously evaluate and improve their offerings to attract and retain guests.
- Continued Growth
Even with an impending recession, Oxford Economics predicts that accommodation will be one of the least-affected industries. As travel continues, people will be looking for flexible, affordable and comfortable accommodations, making short-term rentals a popular option. As the industry grows, it will be important for property owners and managers to keep up with and adapt to changing market conditions. Following industry reports from providers like AirDNA and Rabbu is a great way to keep a pulse on the short-term rental market.
Overall, the short-term rental industry is still in its early stages, but it's poised for continued growth and change in 2023 and beyond. By staying informed and adaptable, short-term rental owners and managers can ensure their rentals remain competitive and successful in this dynamic market.
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