5 Years Since COVID: The Evolution of Vacation Rental Management

Hal Conick
9/8/2025

The past five years have been a wonderful, fruitful, and sometimes frustrating time in the vacation rental industry.

At the beginning of 2020, many travelers knew of vacation rentals, but most had never booked a stay. After the initial uncertainty amid the COVID-19 pandemic, travelers booked vacation homes in droves, hoping to avoid hotels stuffed with strangers.

“The short-term rental industry became a recognized vertical in a smack-bang one year,” says Simon Lehmann, CEO and co-founder of short-term rental consultancy AJL Atelier. “We needed to deal with guests who had a different expectation because they’ve chosen hotels over STR all their lives.”

Data from travel research firm Phocuswright research shows that 43% of short-term rental users in 2020 were first-timers. It was the biggest tipping point in industry history — what was once a foreign concept to travelers became real.

This was also when vacation rentals became real for major investors, new entrants, and city lawmakers concerned about what happens when neighborhoods become filled with vacationers rather than residents.

Through this all, the industry has evolved. To understand how far the vacation rental industry has come these past five years, it’s important to first look back just a few years further.

The Start of the Ascent

In 2007, Brooke Pfautz opened his first vacation rental in Ocean City, Maryland, and noticed that no other vacation rental company in the area provided sheets or linens for guests.

“It didn’t matter if you were coming for three days, a week, or a month, you literally had to bring your own sheets and towels,” Pfautz says.

At this point, vacation rentals were a mystery to most Americans, slowly gaining recognition. In a 2007 post by real estate agent Paul Oster, he marveled at a newly popular website called Vrbo. “I think this is on the verge of coming to the forefront,” Oster wrote of vacation rentals. “And slower economic times tend to drive these sorts of things out of the closet.”

Then, amid the Great Recession, the industry was novel and nascent. There was little industry competition, so curious travelers booked what they could get, even if it meant BYO sheets. Still, booking a vacation rental had perks hotels couldn’t offer: coziness, lower prices, and proximity to untrodden areas. Guest awareness and expectations were low, but those adventurous enough to book were often blown away by the seemingly new option of a vacation rental.

Still, Pfautz recalls feeling like the industry needed to evolve, given its steadily rising profile. Research of the time backed him up. In 2011, PhocusWright reported that only 10% of Americans had rented a vacation home, leaving most of the country as the industry’s great untapped market.

But could a branch of the hospitality industry really attract new guests if its beds had no sheets and its closets no towels? At his properties, Pfautz offered amenities that came standard at hotels, including those elusive towels and sheets. They even made the beds at his properties — very cutting edge, Pfautz says with a laugh. The industry was poised for growth, and he wanted to ensure his company would grow with it.

In 2013, PhocusWrigh reported that the industry had a $24 billion opportunity in the US alone, with awareness growing. Over the next few years, as more booked, amenities and services became standards in the industry. Vacation rentals weren’t hotels, but managers saw that if they could provide services to guests, guests were more likely to book again. The industry evolved, as managers implemented strategies to make guests comfortable.

“Now towels and linens are table stakes,” says Pfautz, now founder and CEO of sales and marketing platform Vintory, as well as Comparent. “Everyone expects it. That’s the evolution.”

The Next Evolution

Like the Great Recession before it, the 2020 pandemic offered an economic and social opening for the growth of vacation rentals.

Travelers may not have been willing to fly across the country or world, but they could drive to a city a few hours away, escape stress, and seek comfort in a vacation home. And as they did, revenue exploded. Data from Statista shows that the US revenue for the vacation rental market in 2020 was up to $12.2 billion.

This time, rather than a slow transition, guest expectations seemed to mutate in an instant. People wanted cleaner spaces, no contact with other humans outside their families, and a stress-free environment to escape a stressed-out world.

The industry worked en masse to meet their expectations. Properties, once analog, became festooned with digital locks, app-controlled temperature systems, and voice-activated everything. Online booking and automated check-in largely replaced phone calls and face-to-face interactions. And cleanliness, always important, became essential, as guests wanted to be assured their atmosphere was free of viruses.

Guest expectations rose and continue to rise today. Guests often expected services that had been standard at hotels for years but never quite on the vacation-rental radar. Data from Breezeway in 2022 found that 31% of vacation rental managers felt that rising guest expectations made it harder to deliver good service, while 54% had noticed increased questions and demand from vacation rental guests over the previous two years.

And over these past five years, as revenue and awareness of the industry grew, so, too, did the number of listings and new entrants to the industry. The number of available listings grew from just over 1 million in 2020 to 1.6 million in 2023, according to AirDNA, and Statista reported that the US revenue in the industry was up to $19.4 billion.

“We had this craziness, and it got a lot of people into the business that probably shouldn’t have been in the business,” Pfautz says. “There was a mad rush of every person who even thought about renting a place or watched a TikTok.”

An expanding number of homes may not have been a problem, but new entrants — many desiring easy income — often were. New entrants didn’t quite know what they were doing, in conflict with rising guest expectations. This sometimes led to awkward situations where guests, new to the industry, arrived at a property managed by a new management company. Often, simple things went awry — damaged furniture, well-worn linens, a lack of anything in the kitchen cupboard — and guests felt underwhelmed or put off entirely. Some began posting online screeds about their bad experiences, often saying that they’d be choosing hotels during future travel. Many of the industry’s new entrants came and went in these past five years, Pfautz says, realizing managing a property wasn’t exactly passive income.

As new entrants have left, bigger vacation rental companies have bought them out and even increased mergers and acquisitions among themselves. This includes a $128.6 million deal at the end of 2024 when industry giant Casago acquired Vacasa.

While the industry has grown, many cities — fed up with investors buying up housing to rent to travelers — have introduced regulations and restrictions. In 2023, New York City essentially banned short-term rentals for stays less than 30 days. Palm Springs, California, limited the number of permits for short-term rentals to 20% of the total dwelling units in a neighborhood. And in New Orleans, new regulations in 2024 limited short-term rentals to one per square block.

These past five years have wrought numerous changes in the industry. Some trends will become table stakes, becoming the next industry evolution like providing sheets and towels of years past. Others will disappear, like many entrants in search of passive income. And some things, like the fundamentals of providing great guest service, will likely never change.

Despite the hiccups, and even after the boom has flattened, industry revenue is still rising. By 2029, Statista reports that the industry could bring in as much as $24.8 billion stateside. What can vacation rental managers learn from the past five years to ensure they’re part of that growth? And what can they expect going forward?

More Consolidation

Before 2020, Sheila Hauser doesn’t recall any businesses leaving the vacation rental business in her local area of St. George Island, Florida. But Hauser, director of marketing at Collins Vacation Rentals, watched three years ago as their biggest local competitor was bought out.

The buyout ended up helping Collins Vacation Rentals, as they took a lot of the properties into their inventory. But she’s also heard of smaller, boutique companies selling to large companies like Casago. “We’ll probably end up getting a few more from them as the merger moves forward,” Hauser says. “It’s going to be interesting to see where that goes.”

Vacation rentals are a highly fragmented industry, Pfautz says, and it likely always will be. Even so, he expects to see even more consolidation and M&A in the industry in the coming years.

One reason for consolidation is that it’s simply an easy way to grow. “With the compression in ADR, the best way to grow your top-line revenue is just to add inventory,” Pfautz says. “If you add one more property, it’s like four to six times the impact of other efforts. Adding one property is like getting 100 guests.”

Combine Technology with Service

Throughout 2020, many vacation rental managers quickly adopted new technology. Entrepreneurs took notice — Simon says that what was once a smattering of technology and software options for the industry has ballooned into 450 companies offering tech to manage revenue, content, smart home settings, customer relationships, and whatever else can be automated or tinkered with from a screen. Tech stacks have grown more useful, but also more complex.

The explosion of technology has made it easier for vacation rental managers to market and reach out to guests, integrate channels, and automate previously arduous tasks. All of this after a not-too-distant era where Pfautz can recall vacation rental managers using colored markers and dry-erase boards to manage their calendars.

At Collins, Hauser says that new technology has also allowed them to better communicate with guests, showcase new property information (like floor plans), and add unique perks to a guest’s stay. Now, for example, Collins prompts travelers booking a stay if they want to add unique tours and experiences via the company’s property management system. They can also more easily market to guests via customer relationship management systems, software that has become essential for vacation rental managers hoping to brand themselves well and grow a relationship with guests away from the OTAs.

While technology is here to stay, it can’t solve everything. Dynamic pricing, for example, hurt Collins when it was still on OTAs, as it often made pricing too expensive for guests. “Maybe people are going to have to step back to how business was done four or five years and not out-price themselves,” Hauser says.

And technology can’t replace good service, she says. During the pandemic, Collins employees couldn’t welcome guests face-to-face; everything was forced to be done through emails, texts, and phone calls. Some vacation rental managers may have held onto this hands-off approach, but Hauser says that she’s noticed travelers once again long for human connection.

“People still want that local contact and a face,” she says. “You still want to be the local knowledgeable expert, where they can come in or call you. Just yesterday, I was talking to this couple who stays with us for two or three months. They just like to come in and talk to the girls — it makes them feel more at ease. … We have to be cautious how we move forward so we don’t lose personal contact with guests.”

AI, the Next Disruptor

Vacation rental managers looking for the next big industry disruption won’t have to look far, Pfautz says, as he believes that artificial intelligence is about to be the biggest technology disruption since the internet.

Already, some vacation managers have adopted AI chatbots, dynamic pricing to set prices via AI, and tools like ChatGPT that use AI to write blog posts, home descriptions, and responses to reviews. Pfautz believes that this technology will burrow deeply into the industry, and it will be each company’s duty to ensure they learn about AI and integrate it to get left behind.

“The OTAs are probably going to end up building out systems with AI, so it will probably solidify their dominance,” he says. “If you don’t build AI functionality into your website, property management software systems, or have a tech stack that allows for AI agents, many companies are going to get eaten. What needs to happen is the property management software systems need to build that and integrate it into their platforms, or else all the reservations are going to be directly through the OTAs.”

Professionalize the Brand

The issue with the vacation rental industry’s reliance on OTA platforms, as Simon sees it, is that it has made vacation rentals seem like a commodity. Most travelers still book by platform, not by brand. With this perception come increased regulations, which have often hampered the vacation rental market.

To fight commoditization, Simon believes that the industry needs to strive for better branding and professionalization. “Everybody needs to up their game, that’s absolutely clear,” Simon says.

Professionalization will mean introducing standards, Simon says. New entrants muddied the waters, sure, but long-term vacation rental managers also lack standards. This doesn’t mean that each home needs to have the same furniture and décor, he notes, but managers should be sure that they’re stocking necessary items in homes, like dishes, toilet paper, and dishwashing liquid, so guests aren’t scrambling for necessities during their stay.

“When I took a hotel, I know exactly what I’m going to get, depending on the brand,” Simon says. “But if I book a short-term rental, I’ll see a picture and always wonder: Is there a toaster? Are there tea kettles? Is there an umbrella in the closet?”

Professionalization is challenging to scale, but Simon believes that the industry will likely see greater use of the franchise model going forward. In this model, a franchisee operates locally but pays a fee to a larger organization and gets access to the larger company’s systems and processes. Pfautz agrees that franchising will grow, perhaps helping standardize the industry.

“If you look at other industries, like real estate brokerages, the franchise model has been successful,” he says. “You have this thin layer up top — marketing and support, systems and processes, sometimes software — but the real P&L is managed and owned at the local level. That’s why I do think the franchise model works.”

Move Toward Direct Bookings

For Hauser, professionalization at Collins Vacation Rentals has meant improving their marketing efforts and moving entirely toward direct bookings.

In 2023, Collins Vacation Rentals stopped using OTAs, relying completely on direct booking through its website or reservation staff. While this likely won’t work for newer companies, as many need the large platform of OTAs to earn a customer base, Hauser says that moving to direct booking has been a success for Collins. She believes it could be a useful goal for other long-standing vacation rental managers, to improve marketing, cut costs, and have a better relationship with return guests.

“You don’t have any of the fees with direct booking,” Hauser says. “Vrbo and Airbnb’s building fees cost more, so it costs the guests more money to use a third party than go directly to the property management company itself. There’s not a middleman.”

Tend to Your Reputation

Even for brands that escape OTAs, Pfautz says that it’s essential to ensure that guest reviews are positive. Brands that use OTAs rely on having good ratings, but so, too, do brands that offer direct bookings.

Reviews have made managers step up their service, Pfautz says. Previously, he may have ignored a call from a guest at 9 p.m. on a Sunday night. Now, he’ll respond, concerned that one bad review may put off future guests.

The average guest now has a lot of data on properties at their fingertips, and few pieces of data are more vital than the experience of past guest. “It’s more important than ever to manage your online reputation,” Pfautz says. “Homeowners and guests have access to more information, so it’s critically important now. They’re all going online and looking at you’re looking at your reviews, your online reputation, before deciding.”

This is one of the reasons why Pfautz created Comparent, which is a directory of more than 6,000 management companies, alongside all their reviews from Google and the OTAs, the number of properties, and metrics like ADR. This makes it easier for property managers and homeowners to have all the information in one place.

Going forward, Pfautz suggests that property managers provide as much information as possible for those who are searching. “Make it easy to retrieve,” he says. “People are going to try to find it anyways. The information is out there. Providing it elevates the industry.”

What We’ve Learned and What’s Next

With ascendant growth over the past five years has come vivid lessons. Technology helps but feels cold when not combined with good service. Guests want more consistency and service from vacation rentals but still want a unique experience. New entrants have often come and gone, finding that there’s nothing passive about vacation rental income.

And the industry grows, but growth comes with obstacles. One of the big lessons of the past five years, Simon says, is the need to professionalize while planning for more regulation. Already, he says that the industry has become “the devil” in many cities because people simply don’t understand.

“One thing that the property manager industry didn’t do very well, especially in regulatory environments and lobbying, is communicating a value proposition of short-term rentals to regulators and legislators,” Simon says. “If you have 500 units in a town, can you imagine how much value you provide to the local communities, restaurants, shops, cleaners, maintenance people, and everything else?”

And no matter what regulation comes, managers must continue to learn, grow, and professionalize their brands. Learning and growing in marketing has helped Hauser win new guests and partners at Collins Vacation Rentals. For Pfautz, learning and growing has meant dedication to bringing AI into his businesses, sensing its impending disruption.

Growing into the future will mean keeping up with rising expectations from a larger base of people. Vacation rental managers should always be asking themselves: Who are our guests, and what do they want on their stay? What are our guests telling us? How can we learn from previous guests to make future stays better?

“On the macro level, the biggest change is that we are now messaging a different customer, a larger customer base,” Simon says of the past five years. “Now, the industry is recognized.”

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