Short-term-rental bookings in the U.S. are growing, due to new travel habits and pent-up demand. Short-term-rental property volume in the U.S. is shrinking, due to property management consolidation. And short-term-rental ownership patterns and needs are changing. Which makes the U.S. short-term-rental landscape both challenging, and ripe with opportunity, for property management companies that specialize in this market. To remain competitive on the not-quite-post-pandemic VR property management scene, companies need to make growth a top focus. And that growth hinges on smart, sustainable new homeowner acquisition. Here’s why acquisition is so important, and how to beat the big players at their own game.
According to STR business intelligence site Transparent, vacation-rental reservation volume for the summer 2021 exceeds summer 2020 by 400%. While the huge jump over last year’s peak pandemic months is not surprising, summer reservation volumes that exceed pre-pandemic 2019 by 50% mark a notable jump.
As rental demand threatens to outpace availability, property managers will need more homes to meet short-term renters needs. A lot more homes. This past spring, Airbnb CEO Brian Chesky told CNBC that the listing platform would need “millions more hosts” to meet demand as travel expands following the lifting of COVID restrictions. And as rental property owners and new STR investors seek ways to capitalize on this demand, while many return to work themselves, they will need professionals to handle servicing, marketing and booking their properties. Property management companies that fail to acquire these new homes during this unprecedented boom will find themselves unable to compete with those that make proactive homeowner acquisition a part of their success strategy.
While rental demand grows, property inventory continues to shrink nationwide. This lack of available properties is due largely to a number of massive home acquisitions, recent mergers and acquisitions within the STR space, and a flood of venture capital aimed at large PM company growth. High-profile acquisitions include Vacasa’s March 2021 purchase of TurnKey Vacation Rentals—the company’s 160th acquisition since its founding—which swelled Vacasa’s already substantial portfolio to 30,000 properties in 80 destinations across the U.S.
Meanwhile, STR startup The Guild announced in April 2021 that it had secured $17.1 million in equity and securities options. At the same time, business-travel-focused Mint House secured $18 million in new investment. In June 2021, real-estate investing firm ReAlpha announced that it was planning to spend a cool $1.5 billion to purchase and manage 5,000 short-term rental homes.
While small and midsize vacation-rental property managers may not have the bags of cash and large business development teams of the mega-PMs, they do have plenty of opportunity for targeted homeowner acquisition.
These “smaller” property-management companies tend to be local or regional experts, and employees usually have a detailed understanding of the properties they serve. And because smaller property managers don’t have to report to investors or boards, they have the flexibility to pivot to new ideas, bring on new tech solutions, target niche markets, and engage in community relations efforts as needed.
The fields of property-management data science and marketing technology have expanded significantly in the past several years. Even “mom and pop” property management companies can build highly targeted lead lists by utilizing readily available real estate and STR permit information. They can then target these refined lists of homeowner prospects using customized ads, landing pages and social media marketing.
Many VR property management companies who are serious about growth in 2021 and beyond are tapping into the expertise of niche agencies such as Vintory. This company specializes in homeowner-acquisition data services, super-targeted marketing automation and inbound marketing management, at a reasonable cost, and with hard data to demonstrate ROI.
On the value proposition side, growth-focused property management companies are now able to offer much of the same kind of proptech as the big players. Cleaning service automation and quality assurance? Check! Using historic data and smart pricing models to maximize revenue? Check! Offering privacy-safe noise-mitigation technology to protect property from complaints and damage? Check!!
Consolidation is not going to stop anytime soon. Neither is the demand for more short-term rental availability. Nor the need to cater to specific new types of STR guests, including:
Which makes the second half of 2021 a prime time for smart homeowner acquisition that brings not just more volume, but more visibility, exactly where you want to be seen.
Natasha Garber covers short-term-rental industry trends, news, regulations and compliance for NoiseAware. Her posts on STR property management technology, privacy-safe noise monitoring, and licensing laws can be found weekly on the NoiseAware blog.