3 Ways to Stand Out from the “Middle Meh” OTA Market

Jul 21 2023

Get tips on how to use Hostfully to optimize your vacation rental business and make more profit.

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What’s in this article?

As the temperatures rise this summer, so does the demand for travel. And with that comes a surge in short-term rental demand. Travelers suffering from pent-up pandemic wanderlust are eager to make up for lost time and embark on long-awaited adventures. In 2021, the global vacation rental market was valued at almost 75 billion USD — and continues to grow according to the UN Worth Tourism Organization (UNWTO) which estimates that in 2030, it will be valued at over 118 billion USD. But with the demand comes increased expectations. We’ll explore what travelers are seeking and how properties outside of the desired segment (the “middle meh”) can up their game to stand out and meet the demand.

The Extremes Attract

Our research found that in 2022, 80% of short-term vacation rental hosts reported more competition than the year before. Specifically, in 2023 there’s a surge in two categories of short-term vacation properties:

  • those boasting an authentic or high-end feel
  • those that are easy and affordable

These properties represent two ends of the current rental market — let’s look at why.

Luxury Travelers

Many travelers are increasingly over cookie-cutter experiences offered by traditional accommodations. And for those who have the means to vacation in sought-after destinations, without feeling the effects of dips in the market, yearn for a certain kind of stay. These luxury travelers are after authentic experiences that reflect the local culture and environment, or upscale accommodations that satisfy escapist ideals brimming with top-tier amenities. Consequently, properties that exude character, charm, and distinct architectural styles are in high demand. From historic mansions and renovated farmhouses to sprawling contemporary lofts featuring high-end touches in urban centers, guests seek properties that offer a memorable and immersive stay. The priorities in a nutshell: maximum experience, photo perfection, spa-like tranquility, local touches, and unforgettable stays. Therefore, they’re less concerned about budget than quality.

Budgeting Travelers

On the other end of the spectrum, in our post-pandemic era, for those who can work from home, workcations have grown in popularity with those families, couples, and individuals working remotely from vacation destinations. Yet while workcation culture soars, guests may want to save a dollar or two in the process, especially for longer or more frequent stays. These travelers tend to prioritize budget over splurge-worthy amenities, impressive features, or authentic charm. As long as they can escape a home routine, are provided the basics, and have access to a desk and some Wi-Fi, these budget-sensitive guests will likely be happy. Have a nice view and offer discounts for longer-term stays? Even better.

These guests represent two travel extremes. The go-all-outers tend to seek out high-end properties, while the just-get-me-out-of-towners book budget-friendly accommodations. Where does that leave all the short-term rentals in between these extremes—otherwise known as the “middle meh”?

The Middle Meh

The middle market serves an important purpose. There are plenty of desirable stays that offer a compromise between the authentic or spa-like luxury property and the budget-conscious humble abode. However, some recent reports suggest that Airbnb and Vrbo properties in this middle market that are outdated, with archaic (or few) basic amenities, aren’t in touch with guest tastes or interests, and have inflexible rates, just don’t appeal to travelers—at least not right now. While this summer is a hot market, there’s a downturn on the horizon, and managers or homeowners of middle meh properties will be likely the first to take notice.

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Get out of the “middle meh”

So how can vacation managers and homeowners avoid the “middle meh” pitfalls? Here are three key ways you can boost your game.

1. Upgrade (and get sustainable)

If interior design and modern amenities are not your strong suit, but you know that old shag carpet and black and white TV could use an upgrade, a great way to discover desirable furnishings and amenities is to look at popular properties. Peruse listings, their images, and reviews to get a comprehensive idea of what those properties highlight and what guests respond to. You may want to hire an online budget-friendly interior design service, or look at local real estate listings, too.

Say a nearby property is all booked up and you notice they provide a charger for electric vehicles—and that their reviews include a mention of the convenient EV charger. It makes ecological and business sense to future-proof your property for accelerating trends such as the projection that “25–30 percent of new car sales could be electric by 2030.” With growing environmental awareness, sustainability has become a key consideration for travelers. Guests in 2023 are actively seeking properties that prioritize eco-friendly practices, such as renewable energy sources, waste reduction, and water conservation. Sustainable retreats, eco-lodges, and off-grid properties that integrate seamlessly with their natural surroundings are particularly popular among environmentally conscious travelers. Between this competitive research and following sustainability issues that increasingly matter to travelers, you might decide to invest in an EV charger. Paying attention to popular amenities in active properties, reading about renters’ expectations and needs, and looking at the furnishings and photography quality in our listings for design inspiration can give you valuable insights into modernizing your home. This in turn can increase your desirability and even push you into a more upscale (and higher-priced) market.

Think about where your property is located just as much as what modern amenities will attract guests. Even if you’re not catering to an upscale lifestyle, guests have lots of properties to choose from so try to understand what your target customer is seeking. If you’re hoping to capture more workcation bookings, highlight your high-speed WiFi and showcase images of your dedicated workspace in your listing. If you want to appeal to more families, look into baby proofing, provide toys, a dedicated playspace, invest in a travel crib—or if you use a PMS like Hostfully, try integrating with a baby equipment rental service like Babyquip. Implementing these minor adjustments will make your property more appealing to an entirely new market of potential guests.

2. Cater to the custom experience

Extra personal touches go a long way as well. Presumably, you’re a local expert so consider any gestures that might make guests feel welcome. Do you live near a revered winery? Leave a bottle of the local wine with a personal note. Is your property located in an urban coffee oasis? Place a beautiful bag of your favorite beans (or grounds if your property doesn’t come with a coffee grinder!) on a counter for your guests to find upon arrival.

You can also add a curated local welcome packet to elevate an average property to a higher end. You might consider creating a digital guidebook with Hostfully (your first book is free!). And if you want to entice your guests with a truly personalized experience, let them plan the stay of their dreams with an AI itinerary they can fully control. No matter what way you go, extra care and customization is a surefire way to garner great ratings, repeat bookings, and a standout reputation.

Guidebook information on examples
Explore itineraries that prioritize certain priorities — for you and your guests. Source
Hostfullys AI powered itinerary generator
With Hostfully, on top of your own efforts and recommendations, you can even give guests a tool to create their own custom itineraries ahead of time. Source

3. Stay competitive with pricing

When trying to boost your number of bookings and capitalize on both popular and unpopular times of the year, you should consider the incredible benefits of dynamic pricing tools. If you’re using a reputed PMS like Hostfully, most will integrate with a number of dynamic pricing partners like PriceLabs, Wheelhouse, Beyond, DPGO, Nightpricer, or Rented. These software providers automatically adjust your nightly pricing based on a range of factors, including time of year, duration of stay, weekend rates, and more. Not only do these tools help make your listing competitive, they also optimize your calendar so you can stay occupied, even on typically unpopular days or quiet seasons.

Article about dynamic pricing
Learn all about dynamic pricing in this article.

Conclusion

No one wants to get lost in a competitive market. And when it comes to improving your short-term rental business, it’s especially critical to strategize ways to stand out. If your property doesn’t naturally fall into the market’s low or high tiers, consider ways you can better book those properties. You can research market design trends and popular amenities, and make sustainable future-proofing investments. Or try giving guests a personalized stay with local treats, thoughtful recommendations, or even guest-created itineraries. And lean into dynamic pricing tools to help you shift with the season and short-term rental market. Whatever you do this season, make sure you get away from the “middle meh.”

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