Everything You Need to Know About the Vacation Rental Industry | Part 1
Part of being a vacation rental owner is knowing the history of the industry and how it can change. The vacation rental market is expanding, and online instant bookings are becoming more popular.
Understanding the history and industry trends allows vacation rental owners to seize future opportunities.
A History of the Vacation Rental Industry
The history of the vacation rental industry teaches rental property development, associations, and advertising.
Where the Vacation Rental Industry Began
The mid-1600s dates the earliest record of vacation homes. The first vacation property being Louis XIV’s Palace of Versailles.
The Palace of Versailles was first built as a hunting lodge for Louis XIII. Predecessor Louis XIV expanded to lodge into the palace we know today. This palace became a location for entertainment and various political figures to vacation in.
By the 1800s, the idea of vacationing in friends’ homes grew in popularity. Yet, the termTimeshare wasn’t coined until the 1960s (UK) and 1970s (US).
Technology and Advertising Increase Visibility
The telegraph was invented in 1837. This creation expanded vacation rental bookings. The telegraph allowed faster communication between renters and homeowners.
The pre-internet area relied on paper advertising. Such as real estate agents, mailing lists, and catalogs. In the 1950s, vacation rental owners use the popularity of newspapers for advertising.
Professionalizing the Industry
The vacation rental industry expanded professionally in 1985, with the creation of The Vacation Rental Management Association (VRMA). But what does VRMA do?
- VRMA is an “International, professional trade association.”
- It is used by property managers and other hospitality industries.
- Being a member connects you to other vacation rental managers and vendors globally.
- Provides professionalism, networking, and educational opportunities.
In 1995, the creation of the internet lists the first Vacation Rental by Owner (VRBO). This Colorado property expanded the ability for vacation rental owners to advertise their properties.
The establishment of online marketplaces (such as HomeAway and Airbnb), become popular sites for vacation rental bookings.
By 2015, “[The] vacation rental industry is worth an estimated $85 billion. HomeAway alone has more than 2.8 million rooms. This is more rooms than the four largest hotel chains in the world.”
The Future of the Vacation Rental Industry
How is the vacation rental industry changing?
- Vacation Rentals increased 57% and continue to grow.
- Vacation Rental revenue is expected to have an annual growth rate of 9.7%.
- (Instant) online bookings and vacation rentals become more mainstream options.
- Increased Professionalism — To compete with hotels, vacation rentals have to offer the same values to their guests.
- More Vacation Rental Services — More micro-management tools. Such as check-in/check-out tools, marketing services, and business practices.
- Smart Technologies for Vacation Rentals — Home automation, smart locks, burglar alarms, etc.
Changes in Language
As VRMA points out, the idea of “vacation” rentals is changing. For example, why is your property labeled “vacation?” Are you booking more than just “vacations,” such as work or social travels?
Changes in language can be a positive shift for the vacation rental industry.
By renaming your property you can “broaden your perspective, or broaden the guests you attract.” This means finding new travelers to market to. Thus, increasing vacation rental revenue.
Changes in the Industry: What to look out for
Education with vacation rental trends can positively impact your property. However, it is just as important to be up-to-date with changes in the industry.
To understand the complete timeline of the vacation rental industry, check out part 2 of this blog and our infographic!
A popular topic in the industry is how large companies like Expedia is buying smaller vacation booking sites (like HomeAway, Orbitz, and Travelocity).
Be aware of new changes when companies merge. Identify if there are changes in bookings. Do your fees increase? Where and how are your properties advertised? Is this positive or negative?
Understanding the new expectations of the platform prevents surprises with money (fees/property rates), booking practices, or changes in your properties bookings.
The hotel industry has called for government regulations for [short-term] vacation rental properties.
The hotel industry wants the vacation rental industry to follow the same regulations that they do. This includes regulating areas such as:
- Provisions of the Americans with Disabilities Act
- Occupancy rules
- Tax reporting
Stay up to date on local and state regulations/rulings. See the ways this can affect your vacation rental property.
What Do You Think?
Is it important to know how your industry began? If you’re a vacation rental owner, how did you learn the tricks of the trade? Who taught you the specifics of the industry?
Share your experiences or knowledge of the vacation rental industry in the comments below.
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