2022 for the Vacation Rental Industry
January 3, 2022

2022 Vacation Rental Industry Predictions 

2021 was a year of an interesting turnaround for the vacation rental industry. There were some big wins, like a 10% increase in demand from 2019 and 40% more revenue due to an increase in ADR levels. But the progression was touch-and-go at times, and for some markets, it was a continuous uphill battle. 

There’s a lot to be excited about as we head into the new year. Here are some of the 2022 vacation rental industry predictions we’re keeping our eyes on. 

The Battle for Inventory is On

One of the most notable factors in 2021 was the disruption of the supply chain. This abrupt stall caused shortages across industries and hit real estate and development particularly hard. This, in addition to skyrocketing home prices, means that fewer people were building or buying investment properties. And means that the competition for new owners with existing second or third properties will be particularly fierce. For property managers, this means there will only be a fixed number of acquirable listings for most of 2022. 

The largest regional and national managers have very openly stated that their growth strategies will be for homeowner acquisition and through M&A. On the individual homeowner strategy, all property managers will have to be more sophisticated, using (and mimicking) what the highly funded competition will be doing. This means intentional marketing and message strategies, direct mail, SEM, and organic search plus an aggressive sales focus moving the conversations with owners forward. Although guest demand and ADR may increase in 2022, inventory growth will be the true deciding factor for revenue and EBITDA wins.

Acquisitions, Mergers, and Funding Will Likely Continue Rising

Vacation rental startups, alongside some of the biggest short-term rental companies in the industry, are using two strategies to meet the demand and increase their inventory. 

The first is through the acquisition of smaller property management companies. For companies with the means to do it, acquiring several small property managers is a simple way to increase inventory and access a new audience of guests. Some of these same vacation rental companies (along with scrappy vacation rental startups) are winning major funding rounds, particularly those focused on new steps in technology and other automation. As guests’ demand for services like contactless check-in and check-out and flexible cancellations increase, companies that come to market with new solutions to guest demand will win big. 

Capturing Demand Will Be Top of Mind

The data shows that the demand for short-term rentals is at an all-time high. That’s great for the industry as a whole but can make competition particularly stiff between property managers. Smaller property managers need to be able to compete with well-funded and sophisticated national companies. 

One 2022 vacation rental industry prediction is that to stay competitive, property managers will need to continue to set themselves up for success with a strong marketing strategy, the latest technologies, top-level guest services, and communication, and flexible pricing optimized for the specific market and time of year. Property managers should also continue to focus on driving direct bookings as much as possible and retarget their previous guests with personalized communication and tailored offers to continue to capture their business.  

Web3 and Decentralization 

Just as in the advent of blockchain and decentralization of finance (DeFi), the internet and applications will see a transition to a similar revolution. Web3 applications usually run on blockchains, decentralized networks of many peer-to-peer nodes (servers) or a combination of the two. These apps are often referred to as dapps and you will see this term used often in web3 space.

What this will mean for travel (and specifically the vacation rental industry) remains to be seen, but 2022 will surely bring innovation. 

Optimizing Revenue Will Be More Important Than Ever

With the increase of demand and a decrease in available new inventory, plus a demand for more services from guests and owners, property owners will need to figure out ways to make the most money off of the properties they already have. For this reason, an increased focus on revenue management makes it on the list of 2022 vacation rental industry predictions. Using data to better understand your market, your peak season, and your properties will help you get your listings in front of the right people at the right time and for the right price. 

If revenue management is on your 2022 New Year’s resolutions list, Rented can help. Our team of revenue management experts can help analyze your data and set up a flexible pricing strategy that’ll help you get the most out of your listings, with an easy-to-use Automated Rate Tool to make adjustments to multiple properties at once. Learn more here!

 

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