The year 2020 saw changes for the travel industry and travelers worldwide. As a worldwide pandemic and mandatory lockdowns closed borders and cities, new rules and regulations changed the way we travel. And the most significant change can in where we stay when we travel.
Lobbies, crowded elevators, shared dining spaces – few hotel aspects lend themselves to a global pandemic. Throughout 2020, alternative accommodations gained a significant leg up on traditional lodging. Mid-city apartments were elbowed aside by tiny homes, farm stays, treehouses, and even yurts.
Whereas US short-term rentals accounted for just 10% of total lodging revenue heading into 2020, the pandemic boosted their share to over 25%. Many travelers opted for traditional accommodation types in 2020. In that category, hosts who manage bigger, single-family units made out best.
With the rise in pod travel and the desire for fully-equipped stays, it’s no wonder these supply segments will perform best in 2021. Second, it seems that longer-term stays weren’t just a flash in the pan. Not only have stays of 8+ days not returned to pre-pandemic levels, but they’ve also been steadily rising since the summer. Longer-term stays now account for twice as many trips as they did in 2019. Heading into 2021, hosts relying solely on short, pricy weekend stays will likely need to readjust.
Travelers in 2020 made safety and cleanliness their priorities. Airbnb’s new Enhanced Cleaning Initiative sought to provide a stamp of approval to hosts who were up to snuff on their COVID protocols — and it worked. Throughout the year, high cleanliness ratings directly correlated with high occupancy rates. It’s tough to imagine2021 deviating too far from this theme. Expect hotel-like cleaning standards to be the future norm of successful vacation rentals.
The takeaway is clear: with more travelers preferring vacation rentals than ever before, they’ve become far more resilient and insulated from international crises.
Travel experts project that 2020 is turning out to be a catalyst for the travel sector to fully adopt short-term rentals as a primary lodging choice in 2021.
One of the most curious trends of 2020 has been the resilience of rates. Even in the face of a global pandemic, the average daily rates of vacation rentals not only remained strong but grew. While many expected a wave of discounts, demand for vacation rentals meant hosts could price properties competitively.
Average Nightly Rates grew modestly in 2020 by 4%-6%. HostWell project rates to follow a similar path into 2021 as travel becomes more commonplace. The wave of professionalization is by no means a trend specific to 2020.
Today, most units and revenue share are still dominated by hosts with fewer than five properties. However, those with more than six properties have been gaining ground steadily over the last five years. If we were to pick a theme surrounding professionalization in 2020, it’d be its lack thereof. The trends stayed their course, and the pandemic remarkably didn’t cause too much disruption. Look for large-scale property owners to continue growth in 2020, particularly in terms of revenue share.
The supply of vacation rentals saw a significant downturn in 2020 as the pandemic caused many operators to close their doors. However, from a high-level view, total listings are holding relatively flat — a trend we expect to continue in 2021. What does this mean for short-term rental professionals? Fewer hosts mean less competition — but it could also be the canary in the coal mine of an oversupplied industry.