What the Future Holds for Short-Term Rentals

The short-term rental industry has seen a significant boom following the pandemic, largely due to the rise in remote work. However, industry executives gathered at Skift’s Short-Term Rental Summit to discuss the future of the sector and its sustainability.

In the latest edition of the Skift Podcast, we’ve selected highlights from the recent Summit that help explain where the industry is and where it’s heading. You can listen below, as well as visit our YouTube channel to view complete sessions from the event.

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Steve Milo, founder and CEO of VTrips, highlighted the need to optimize the guest experience. He emphasized that vacation homes are often retrofitted second homes not originally designed for rental purposes. Milo proposed designing rental properties from the ground up to maximize occupancy, guest experience, and revenue, focusing on larger open areas, kitchens, and dining areas.

Tim Rosolio, vice president of Vacation Rental Partner Success at Expedia Group, expressed optimism about the industry’s future. He noted that many people tried short-term rentals for the first time during the pandemic and had positive experiences. Rosolio emphasized the importance of addressing regulatory challenges and finding a balance between growth and regulation.

Henrik Kjellberg, Group CEO of Awaze, predicted that the short-term rental industry would become increasingly globalized over time, aligning with the overall trend in the travel industry.

Brian Egan, co-founder and CEO of Evolve, discussed the tradeoff between profitability and growth. He emphasized that businesses should consider the discounted cash flow and cautioned against pursuing growth at the expense of profitability.

Jason Fudin, co-founder and CEO of Placemakr, offered a different perspective on the industry’s evolution. He envisioned a shift towards blended apartment-style hotels as the highest investment use, with conventional multi-family buildings being converted into hospitality properties in cities and the reverse happening in exurbs and tertiary markets.

Heena Patel, senior vice president of Global Rental Operations at Travel + Leisure Co., focused on changing the perception of timeshare. She highlighted the flexibility of modern timeshare models, such as points-based systems and the ability to exchange properties globally, aiming to attract more people to experience the benefits of timeshare ownership.

Alex Chatzieleftheriou, co-founder and CEO of Blueground, anticipated an increase in furnished residential supply. Currently, only about 3 percent of residential real estate is furnished, but he believed that number would rise in the future, supported by even major real estate players.

Francis Davidson, co-founder and CEO of Sonder, emphasized the importance of clear communication to customers. He suggested that brands should focus on conveying the specific features and philosophy of each property rather than adhering to a rigid definition of holiday experiences.

Rob Greyber, CEO of Vacasa, acknowledged the challenges within the industry but also expressed enthusiasm about the opportunities for growth. He believed that solving the industry’s problems required a combination of technology-enabled services and personalized hospitality.

Overall, the executives offered various insights into the future of the short-term rental industry, including optimizing guest experiences, addressing regulatory challenges, globalization, profitability versus growth tradeoffs, changing perceptions of timeshare, furnished residential supply, clear brand communication, and leveraging technology for better guest and homeowner services.