This is part of an ongoing VRMA series of quarterly reviews of the top trends in the vacation rental industry. For those new to the series, you can find earlier posts under my VRMA Blog Contributor Page.
This series' intent is to synthesize major trends and developments within the vacation rental industry over the period, not just to summarize them all. My hope is to stimulate discussion and debate, and as such I strongly encourage use of the comments section at the bottom. I would like especially to hear what trends you think I have missed and what vacation rental managers (VRMs) can do to benefit from positive trends while limiting the detriment caused by negative trends.
2015 proved itself to be a big year for the vacation rental industry. Dubbed “The Year of Experience,” the year saw increased success at home and abroad, the mainstreaming of vacation rentals, an emphasis on the inclusion of the business traveler, and much more. The industry is continuing to grow in popularity, but what will 2016 bring?
As expected, increased (and often uninformed) reactionary regulation of the vacation rental industry continued to be omnipresent this year. While fair, enforceable, and reasonable regulation can help ensure legal rentals and help generate tax revenue, recent regulation has attacked property rights and imposed unenforceable regulation upon homeowners. When given the opportunity to do so, most people would prefer to abide by the law, not break it. When myopic local governments make that too difficult, however, history has shown the result is more “criminal activity,” not less of the activity the government attempted to curtail in the first place.
Unfortunately, this detrimental trend will likely continue to grow, which makes it more important than ever for those in the industry to remain vocal, persistent, and organized in regard to the importance of fairly regulated short-term rentals. For resources and more information, get to know the issues at the Short Term Rental Advocacy Center.
Consolidation & Convergence
Between the Expedia acquisition of HomeAway, Hyatt investing in OneFineStay, Airbnb accepting hotel reservations, the Marriott/Starwood merger, and the Accor/Fairmont/Raffles/Swissotel merger, the accommodation industry is beginning to consolidate and converge, proving that we are in the midst of exciting change in terms of shaping travel.
These mergers and acquisitions are not only moving to expand inventory for major OTAs or property managers; we’ve likewise seen consolidation and convergence across accommodation “categories” and across geographies. As we’ve said before, the classification of “hotels,” “motels,” “bed and breakfasts,” and “vacation rentals” are nothing but false constructs, and with the consolidation and convergence of major companies, the accommodation industry appears to be recognizing this.
Distrust of the Big Players
As the major players get larger and change inevitably comes to the industry, it’s only natural to see increased distrust and concern from customers. With talks of HomeAway overselling its performance to Expedia, TripAdvisor and HomeAway enacting traveler fees like those of Airbnb, changing “Best Match” algorithms to favor property managers over homeowners, and HomeAway’s announcement that 100% of listings would be bookable online by 2016, feathers are being ruffled.
As customers of the big OTAs fret over platform changes (for better or worse) and voice their distrust of the big players, we have to ask ourselves, “Who do they really serve?"
2016: The Year of the Customer?
Along with the consolidation and convergence of the industry, OTAs will have to reveal who they view as their primary customer as they are forced to prioritize demands. Is it the primary customer the guest/renters? The property manager? The owners of the home? The answer may surprise, and infuriate, many long-term industry participants, but it also may help take the short term rental industry to heights previously unimagined.
As we see tension in desire from supply, distribution, and demand, will 2016 reveal the vacation rental industry’s true customer? I, for one, can’t wait to find out.