The vacation rental industry has grown exponentially in the last decade. It’s estimated that about 450 million people worldwide use vacation rentals either as guests or owners. Statista reports that the travel and tourism industry has been growing at a rate of nearly eleven percent. The growth of the vacation rental industry has a significant impact on guests, home owners, and the communities in which the investment property resides.
Impact on the Guests
Accommodations are a key factor when guests book a vacation destination. Vacation rentals offer an alternative to a traditional hotel or resort stay. Instead of booking just a room, vacation rentals provide much more. Bookings for private rooms have decreased significantly as travelers look to other options. Guests have discovered choices that fit their lifestyle and recreational needs. They can choose from apartments in the heart of a downtown district, a single-family home in a luxury golf community, and condos at a beach retreat or ski-resort—and much more.
More Space for Larger Groups
Whether traveling with family, friends, or business associates, a traditional hotel stay means booking multiple rooms. It’s not always possible to book adjoining rooms, often preferable when there are children/teens in the group. It also can be difficult to book a block of rooms located on the same floor or in the same area of the hotel/resort. Being separated dampens vacation fun.
Guests who choose a vacation rental can get more for their money with a home that has the space to accommodate a larger group. Some rentals may have two or three bedrooms that each sleep three or four, plus additional sleeping space in the living room as well as multiple bathrooms.
Personal, Private, and Practical Comforts of Home
Beyond the sleeping space for everyone in a larger group, a vacation rental may also better provide the personal, private, and practical comforts of a home. Renting a beach condo in San Carlos means not just easy access to white sands and spectacular water views, but a beautiful living space complete with separate bedrooms, living room, kitchen, and in-unit laundry.
Guests may find condos and apartments for rent that are part of a vacation resort. These types of rentals combine the best of both worlds. You get the privacy and comfort of a home but easy access to the amenities of a luxury resort. Amenities may include swimming pools, a fitness center, spa, and private beach access or ski-in/ski-out privileges.
Easier to Enjoy a More Socially-Distanced Experience
The impact of COVID has been felt worldwide in all industries. The travel industry has worked hard to provide a safe experience for guests, but traditional hotels with many rooms, common spaces for meals and recreation, may still struggle. A vacation rental home makes it easier to enjoy a more socially-distanced getaway if it’s desired. Guests can choose how much or how little they’d like to interact with other resort guests or neighborhood locals.
Opportunity to Live Like Locals
Book a vacation rental in an area that piques your curiosity. Maybe it’s a place you’d like to consider living year-round someday. Booking a stay in a rental versus a traditional hotel gives you the opportunity to live like the locals. You can explore the neighborhood, visit local shops and businesses, and create a more personalized vacation experience.
Impact on Home Owners
The vacation rental industry has a direct impact on homeowners, whether you’re the owner of the property or a resident of the community where the property sits. As an investment property owner, there are numerous responsibilities and logistical issues that have to be handled. For many owners, it’s easier and more convenient to work with a professional property management company.
Property management companies, like Casago, offer several services and our involvement with your vacation home has certain benefits.
- Increased ROI
- We handle the marketing and bookings
- On-site managers with specific property expertise
- We deal with hiring housekeeping staff and other subcontractors
Guests are the heart of the vacation rental industry. Without the guests, it would just be an empty home waiting for the owner to arrive a few times each year for a getaway. And there is nothing wrong with that—unless you’re looking to increase your return-on-investment (ROI). A ten-percent or higher ROI is generally good for an investment property.
Managing a property from a distance can be difficult, and even if you’re semi-local, it can take time you may not have. Working with a professional property management company relieves that pressure. They offer the bandwidth and resources to devote the necessary time to each and every property.
For your vacation rental to turn a profit, it needs to be marketed so guests can find it. In the competitive travel industry, you need a strong marketing plan. Marketing your property is another benefit to working with a property management company. They’ll take eye-catching photos of the property, write an exciting description, and get it posted to their site. You get the benefit of their established reputation, resources, and platform with a stronger reach than an individual’s Facebook or Instagram post. Further, Casago is continuing to blaze the trail in the industry. Now, they are building high-quality content in each region to assist guests in planning their vacations.
Did you know? The Casago website receives 7.5 million hits a month.
The logistics of finding guests, securing the bookings, making sure all contracts are signed, and collecting fees can be overwhelming for the new vacation rental home owner. Working with a property management company helps reduce booking stress. Let the pros field inquiries about the property, collect deposits and balances, and deal with any special requests.
In the event of a cancellation, leave it to the property management company to settle any transactions and quickly get the home back on the list, ready for a new booking. As vacation rental industry professionals, we know how important it is to the homeowner for the property to relist as soon as possible.
Less Stress on the Day-to-Day Details
Vacation home owners typically are not local and available to handle the day-to-day details that need to be addressed with a rental property. The professional management teams at Casago make sure each property is ready for guests, from housekeeping to maintenance. You can enjoy your freedom, you will only receive a call when there is an urgent need.
Flexibility for Vacation Scheduling
As a vacation home owner, you can enjoy flexible scheduling. It’s your property, you decide when you want to use it and when you want to make it available for guests.
Impact on the Community
Short-term rentals, which are the staple of the vacation rental industry, have a significant impact on the community in which they reside. They can bring substantial revenue into the community as guests patronize local businesses and resources. However, there can be downsides to short-term rentals within a residential community, ranging from the influx of strangers to an effect on the availability of long-term housing.
The Affects on Local Businesses
Local businesses can benefit from the vacation rental industry—increased tourism often means increased revenue. Guests book a short-term rental as a getaway and it’s the community that benefits. Guests visit local restaurants, shops, buy gas, explore historic sites, attend events and more. It all affects the community businesses, and when the guests have a positive experience, the impact goes even further.
Vacation rental guests will rebook for future stays, post about their fun times on social media, and talk about it to friends and family. In addition, guests can create a need for more jobs in the community. More tourism, more local residents needed to fill service positions and other essential jobs. According to one report, in the city of San Diego, short-term vacation rentals have helped to support nearly 2,000 jobs.
Reduction of Long-Term Housing Options
While there are several ways the vacation rental industry benefits communities, there can be concerns. One issue is how short-term rentals impact the long-term housing availability for residential communities. In some areas of the country, there have been reports of corporate entities buying condos or apartments to use expressly as a short-term rental.
These types of buyers have deep pockets and can out-maneuver the average vacation rental buyer. As this happens, the availability of long-term housing begins to diminish, making it hard for potential buyers to get a home and settle in as a community resident.
Residents in neighborhoods with short-term rentals may feel their community is changing. Guest turn-over brings many strangers to the neighborhood and that can be worrisome to some residents. Property owners may have concerns that the value of their home has lessened due to the proximity of the short-term rental. A great property management company knows how to ensure that both guests and locals are happy. This means that there must be an open level of communication and transparency. This is what Casago is all about.
Tax Revenues for Local Government
It varies by city, but some short-term vacation rentals are not taxed. This creates revenue loss for the local government, which raises concerns for citizens. However, if the city or county requires the investment property owner to pay a registration fee or permit/license, it can help generate revenue that then can be used for the benefit of all residents. When considering a vacation rental as an investment property, be sure to check with the local government on what type of fees, registration, permits, or licenses are necessary.
The vacation rental industry offers many benefits to guests, home owners, and communities. A vacation home is a great alternative to a stay in a traditional hotel. It’s more personal, private, and often more spacious for larger groups. It’s the ideal venue when you want to immerse yourself in an area by staying where the locals live. As an owner, it’s a chance to have a vacation home that not only provides a getaway destination, but that can generate extra income when you’re not using it.
If you’re ready to invest in your own vacation rental or have more questions, we’re here for you.