LONDON--(BUSINESS WIRE)--Technavio’s latest report on the global vacation rental market provides an analysis on the key trends expected to impact the market outlook from 2015-2019. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.
The top four emerging trends driving the global vacation rental market according to Technavio research analysts are:
- Increased professionalism
- Proliferation of vacation rental business services
- New entrants from related industries
- Technological advancements
The report states that with a growing number of vacation rental websites emerging and the commoditization of rentals taking place, the market is in a danger of damaging its reputation. In addition, owing to the growing lucrativeness of the market, competition is intensifying from both direct and indirect competitors. Hotels are increasing their amenities and technologies to attract guests. Boutique hotels are also becoming popular. This is leading to increased efforts by players operating in the vacation rental market to offer more value to their guests.
According to Abhay Sinha, a lead research analyst at Technavio for consumer services, “Professional vacation rental managers and websites are leveraging technology, adopting professional tools, standardizing products, and offering personnel training to provide a seamless experience. Airbnb has plans to provide more alternatives and services to its customers, which cater to their needs from the beginning of the vacation to arrival back home. All these factors are expected to create remarkable experiences for the customer.”
Proliferation of vacation rental business services
The vacation rental business is becoming more complex and necessitates micro-management of processes in order to improve competitiveness. Spotting this opportunity, several companies that provide tailored services to managers of vacation rental business and travelers have entered the market. Companies that specialize in marketing vacation rentals across online sites provide a specifically designed general liability insurance for vacation rental providers; optimize listings and profiles; booking and scheduling; household goods restocking; and check-in services; among others.
For instance, Pillow, a technology-based hospitality service, offers the management of the vacation rental property in terms of keeping it clean, providing customer service, taking care of maintenance, and guest turnover for a 15% commission on the rental income. All these factors can increase the rental income for hosts and provide a stress-free travel experience for renters, improving the overall environment of the market.
New entrants from related industries
The vast potential of the vacation rental market and the stiff competition in the traditional lodging industry has enticed vendors from related travel and accommodation industries to adopt the sharing economy model. The market was extremely fragmented with poor service standards. However, with that changing and the market becoming increasingly service-oriented, it would be a viable income stream for players operating in the hotel industry.
For instance, Hyatt Hotels invested in the market by backing Onefinestay in 2014, a provider of high-end vacation rental apartments and homes in New York, Los Angeles, London, and Paris. Booking.com also launched a new website, Villas.com, which provides vacation rental villas. Another case is that of Travelport, which announced its interest in adding vacation rental properties to its product portfolio.
“Technological advancements in the market are taking place on all fronts. Property owners are increasingly investing in smart home devices to simplify and make the vacation rental process more secure while simultaneously catering to the technologically advanced millennials. Home automation, Bluetooth smart locks, smart fire alarms, burglar alarms, and other such devices are being implemented,” says Abhay.
The report states that nearly 70% of vacation rental managers belonging to the under-45-year age group have installed a Wi-Fi or electronic lock installed in their vacation rental properties. They are also more inclined to using business intelligence software and data mining tools to harness their data to improve their decision-making. Also, price optimization by utilizing revenue management software tools is gaining popularity in the market.
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