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Industry Update: Vacation Rental Growth & Maturity Taking Shape

By April 9, 2013 12 Comments
VRM vs. Travel Industry?

VRM vs. Travel Industry?

It can often be difficult to fully comprehend changes as we are enthralled in the experience of the change.

How cool did you think you were as a teenager? I had it all figured out…or so I thought. However, looking back, the confused kid trying to find his way is a bit more evident.

As they say, hindsight is 20/20.

The vacation rental industry is in the midst of undergoing significant change. A small “mom & pop” industry is growing and maturing into a multi-billion dollar travel segment.

These changes have far-reaching effects. Perhaps we can’t see it today, but the growth and maturity of the vacation rental industry is starting to take shape.

Vacation Rental Industry News & Trends:

  1. Here’s a great infographic to remind you why vacation rental homes are such a big threat to the hotel industry (and why the hotel industry is taking notice – see point #2 :)): Vacation Rentals Move in on Hotels.
  2. 2013 Starts with a Bang for the Vacation Rental Industry: Wyndham acquires VRM’s & Booking.com starts to list vacation rental homes. These are definitely not “mom & pop” players.
  3. Vacation Home Sales Surge Across America: Just announced last week by National Association of Realtors (NAR). Checkout these highlights (my emphasis added)…
    1. 2012 saw a 10% increase in vacation home sales!
    2. About 34 percent of vacation homes purchased last year were within 100 miles of the buyer’s primary residence, while 46 percent were more than 500 miles away.
    3. Nearly eight in 10 buyers said rental income influenced their decision to buy.
    4. Almost all vacation home buyers (92 percent) said they plan to rent their property within the next 12 months.
  4. The Vacation Rental Managers Association (VRMA) recently released survey results that offer some telling signs for industry trends…
    1. Why Vacation Rental Homeowners Go With a Pro
    2. “Why Vacation Rental Travelers Go with a Pro”
  5. HomeAway Adds Timeshare Inventory to the Vacation Rental Market:
    1. In January HomeAway announced it’s first partnership with a timeshare provider.
    2. Today, HomeAway announced three more timeshare partnerships.

Whew, that’s a lot of action!

Quick Recap…

  1. Vacation rentals offer a significant threat to the hotel industry.
  2. Big hotel companies are increasing their presence in the vacation rental industry.
  3. Vacation homes sales are strong, buyers intend to rent, and the homes are a long distance from the homeowners.
  4. Trends show that homeowners and travelers realize the benefits professional VRM’s offer over VRBO’s.
  5. There is a whole new segment of competition added to the mix – hello vacant timeshare units. Keep in mind, this is no small segment, and these are big players too.

Conclusion:

The entire travel industry has taken notice of the vacation rental industry. But they are not only taking notice. They are getting in the game. Big names and big money are moving towards the growing vacation rental industry.

This is fantastic! Attention from big names and big money will surely help push the vacation rental industry over that tipping point of mainstream acceptance.

However, it’s a double-edged sword. The “mom & pop” industry is going to be forced to grow up quickly as big business enters the game.

But the vacation rental industry – the “mom’s & pop’s” – doesn’t need to sit on its heels and wait for big guys to act. In fact, VRM’s need to get out in front and leverage the expertise they bring to the industry.

It’s great to have deep pockets, but deep pockets don’t create an instant level of knowledge and expertise. VRM’s that have been at this game for 10, 20, or 30+ years know the challenges managing a large number of scattered homes brings. The big dogs still have to figure those challenges out.

At this point smaller VRM’s still have a leg up, but the big competition is gaining momentum. VRM’s need to recognize the challenges and find ways to overcome and streamline their businesses.

To some degree, the vacation rental industry needs to emulate the hotel industry. VRM’s need to be sleek, efficient, and streamlined.

And this is why I am more confident than ever that property automation will have a HUGE impact on the future of the vacation rental industry.

PointCentral property automation offers VRM’s hotel-like control.

With PointCentral home automation, vacation rental managers have the ability to manage a scattered inventory of homes like a hotel! Property control like they’ve never experienced. And to be efficient, VRM’s will need to leverage this type of control.

PointConnect property automation services enable vacation rental managers to improve…

  • Operating Efficiency
  • Guest Experience
  • Energy Management
  • Security

You can reach us at [email protected] to learn how PointConnect can deliver all of these “smart home” capabilities.

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