Executives speaking at the recent Skift Short-Term Rental Summit offered no shortage of predictions about the future of the industry, and here's a list of some of the most noteworthy.
The short-term rental industry has experienced a major boom coming out of the pandemic, driven in large part by the surge in remote work.
But what does the future hold, especially since the sector’s enormous recent growth may not be sustainable? Executives speaking at Skift’s Short-Term Rental Summit offered their thoughts about what comes next.
Steve Milo, founder and CEO of VTrips: “We all know that part of the biggest problem with guest satisfaction is the product is not optimized right. In many cases, we talk about vacation homes — they’re retrofitted second homes and those second homes were never really built to be a vacation rental.”
“Imagine this product if you were to design it from the beginning and truly make it a true guest experience. So that means smaller bedrooms, smaller closets, smaller bathrooms – but bigger open areas, bigger kitchens, bigger dining areas … I’m talking about the product in general being built from the ground floor up to maximize occupancy, guest experience and revenue. If you do that, we crush the hotels.”
Tim Rosolio, vice president of Vacation Rental Partner Success of Expedia Group: “I think our industry is actually about to go on a run. The reason why is you had all of these people that tried short-term rentals for the first time during the pandemic and because a lot of the property managers that are out here, they very often had a terrific experience. And now, it’s a part of their consideration set.”
“We as an industry need to understand that this regulation thing isn’t going away … but based upon the growth of the industry, there’s this opportunity for us to meet regulators in the middle.”
Henrik Kjellberg, Group CEO of Awaze: “Over time, everything in travel has ended up going global. So I think in the medium- to long-term, this industry is going to become globalized.”
Brian Egan, co-founder and CEO of Evolve: “Businesses have always been worth a discounted current view of their cash flow. So I think that the tradeoff between profitability and growth is like … we’re being reminded of it, but this is not a new phenomenon, and I think again that the faster we come to grips with that as an industry and not sort of pursue growth just by lighting large piles of money on fire, the better off we’re all going to be.”
Jason Fudin, co-founder and CEO of Placemakr: “We have a different view of how the world will evolve. So we think that today where you see in cities, high-rise apartment buildings going up or hotels … if you build real estate, you know that what you do is figure out what the land is worth by how much money I can make on a hotel or apartment. And what we expect to have happen over time is the highest investment use available is blended apartment-style hotels. And so you’re not going to see conventional multi-family buildings go up or Marriott’s conventional products.”
“In the cities, you’re seeing people looking at converting hotels into apartments. And then in the exurbs and tertiary markets, you’re looking at the other way around because in hospitality, there’s a lot of opportunity. And it will flip again. And will flip again.”
Heena Patel, senior vice president of Global Rental Operations at Travel + Leisure Co.: “We’re distinctly trying to change the impression of timeshare because it’s always been one of those weird words …. people think timeshare is that week in Myrtle Beach that I go every single year and it’s one bedroom.
“And really timeshare has evolved from that. It’s a points-based system. You have the flexibility of going all over the world. You have the flexibility of exchanging into a product that’s outside of the brand you’re in. And being able to get people into the front end to experience it and then see the benefit of growth. And ownership is the key.”
Alex Chatzieleftheriou, co-founder and CEO of Blueground: “If you look at the residential supply, right now about 3 percent of the residential real estate supply is furnished. So we think that will go up … even the biggest real estate players that we work with, the (Ritz-Carltons) of the world, they expect that to be much larger.”
Francis Davidson, co-founder and CEO of Sonder: “We think that having a lot of brands can be confusing to the customer and what’s most important is to show what exactly is it you’re getting when you’re looking at a specific property. So I think gone are the pre-Internet days where you really needed a holiday to mean a very specific thing. The brand can communicate more of a philosophy, which for us is being design-forward.”
Rob Greyber, CEO of Vacasa: “This is a tremendous category that continues to grow. This is a category with a hard problem … I love that when I think about a business because that means there’s great work to be done. Work that is not the work of a day or a month, but of years. I think that there’s a hard problem in this industry to solve and I think that we are at the nexus of that.”
“And it’s a problem that is best solved with technology-enabled services with the hospitality where you’re using the technology that’s available to help the people (who) are the closest to our guests and to our homeowners.”
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Photo credit: The audience at Skift Short-Term Rental Summit in New York City on June 7, 2023 Skift