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The vacation home rental business was more resilient than expected during the pandemic, and operators of all sizes are looking to hotel-style operations to capitalize on further growth opportunities.
Summer travel demand is expected to heat up quickly across all markets, especially in regions like the northeast where most business restrictions are easing by the end of this month. Short-term rental occupancies averaged 34 percent in the Mid-Atlantic states and 30 percent in New England in March and April, according to Key Data. But that is expected to jump to 56 percent and 51 percent, respectively, this summer based off forward bookings.
National operators like Homes & Villas by Marriott International as well as more regional brands like Southern Vacation Rentals see the summer surge and look to standardize their operations in the same vein as a hotel to appeal to more customers.
“You really are looking at what can only be described as what feels like, on the ground, the busiest summer for vacation rentals that I’ve ever experienced in 20 years and certainly since we began tracking the data,” said Key Data CEO Jason Sprenkle on Wednesday during Skift’s Short-Term Rental and Outdoor Summit.
One of the earliest examples from the pandemic of short-term rental companies adapting some form of brand standard involved cleaning protocols. While business restrictions are lifting across the U.S. in light of vaccine distribution, the cleaning standards introduced during the pandemic will leave a legacy.
Heightened cleaning protocols trickled down into finding more efficient ways to go about operations at Southern Vacation Rentals, which operates in Northwest Florida and Coastal Alabama. The company now has standardized bedding and coverlets for all of its 5,500 beds that can quickly get cleaned between stays.
Marriott, through its Homes & Villas platform, has an advantage in deploying hotel practices to its short-term rental listings. The company has maintained since the division’s 2019 launch it would work only with management companies to have an elevated brand standard across its offerings, which is now roughly 30,000 homes.
“We’ve been coming to the market to help continue to educate and professionalize with a strong perspective on what we think creates a solid customer experience that guests can go in and say, ‘This place feels clean,’” said Jennifer Hsieh, vice president of Homes & Villas by Marriott International.
Some of Marriott’s short-term rental standards and contract terms, including non-compete clauses and price parity where such a practice is legal, came to light in multiple Skift reports in recent weeks.
Marriott asks management companies to offer up their entire portfolio, and the hotel company will then narrow down which homes it wants to use on the Homes & Villas platform. If a management company does sign up with Marriott, they are barred from working with other companies like Hyatt.
Some of those terms got pushback and, while Hsieh didn’t respond to each claim, she broadly defended Marriott’s way of going about the business.
“What I can say is we haven’t had any property management company who’s worked with us walk away,” Hsieh said. “Once they join and become part of the Marriott family, they stay with us. I think that speaks loudly to the fact that we partner deeply with folks, and we evolve the business as we go. We listen to their needs.”
Similar Playbook, Similar Problems
Like most travel companies, short-term rental operators face a major labor shortage problem heading into the summer. Some of that may be a self-inflicted wound.
“There’s lots of factors as to why people are struggling right now to find help,” said Southern Vacation Rentals CEO Scott Seay. “We’re certainly in that same cart with everyone else.”
Southern Vacation Rentals had to furlough many of its employees at the beginning of the pandemic like most businesses. While that may have been the right decision for a company’s bottom line, it also put coveted workers back into a job market where many across the hotel industry left for good.
Seay noted many of his company’s workers came back “very ferociously,” but there is still a need for more workers. He chalks up the company’s more localized operation across the Alabama and Florida panhandle as an advantage in recruiting workers through word of mouth.
“I think we’re starting to see that maybe pick up this summer, but it’s been a tumultuous year with a lot of ups and downs,” he added.