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🌞 Vacation rental industry update: July 2019

By July 12, 2019 July 15th, 2019 No Comments
Vacation rental industry update

It has been a busy month in the vacation rental universe, starting with Sonder announcing a $1 billion valuation, as well as a bunch of awards from Matt Landau and VRMB—including ‘Best All Around Vacation Rental Software’ going to Hostfully! That’s not all that’s happening however, we will also cover:

  • Booking.com in the media over a management shakeup
  • A rise in real estate investors and a greater push into STRs
  • The most profitable cities for Airbnb rentals are…
  • New local recommendations report for vacation rental managers
  • Local STR regulation news out of Hawaii, New Jersey, Texas, and L.A.

Let’s get going!

A big raise from Sonder

TechCrunch announced yesterday that vacation rental platform Sonder raised $225 million in additional investment, giving the Airbnb competitor the lofty ‘unicorn’ status with its new $1 billion valuation. Sonder’s success is unsurprising given that last year it tripled its units on the platform, and now expects $400 million in revenue in 2019.

VRMB 2019 Awards

VRMB’s 2019 Keystone Awards were announced last week, with Vreasy, Kigo, Streamline, among others, taking top place in various categories. For the ‘Best All-Around Vacation Rental Software’ award, we at Hostfully are extremely proud to announce that we won! Award judge Terry Whyte summarizes the reason for choosing Hostfully:

Matt Landau and the VRMB team used data from 100+ hours of demos, 750+ completions of their PMS Selector Tool, and qualitative feedback to come up with this year’s winners.

Booking.com in the media over a management shakeup

Booking.com hit the news this month, beginning with CEO Gillian Tans abruptly departing with the parent company’s chief executive, Glenn Fogel, assuming her role. Skift notes that “there’s little doubt that Tans’ abrupt departure, without any transition time, points to conflicts within Booking Holdings over the company’s strategic direction.”

The Wall Street Journal also reported that Booking.com will now take a commission on resort and hotel fees amidst a stiff backlash from the hotel industry. Expedia fired back, stating publicly that they would not be collecting similar fees on their platform. The Guardian also published a consumer report that suggests that Booking.com may not be issuing incentives to travelers as promised on their website.

Rise of real estate investors and a greater push into STRs

Vacation rental businesses depend heavily on property owners and investor partnerships. This is why a CoreLogic report is so important to note for VRMBs. Specifically, the report states that real estate investing is on the rise, and that in 2018 investor purchases reached their highest level in two decades. These are not big institutional players either the report states, but rather smaller “mom and pop” investors.

Couple this with Forbes Real Estate Council member Michael Wilson noting last week that in an economic downtown—which may not be far off—real estate investors will increasingly turn to STRs over long-term rental options. VRMBs are at the interesting intersection of rising real estate investing, and a potential push toward greater emphasis on STRs.

The most profitable cities for Airbnb rentals are…

Forbes Contributor Amy Dobson reported last week, using Mashvisor data, on the most profitable cities in the U.S. for Airbnb rentals.

Source: Forbes

New study: What local recommendations vacation rental managers share with guests

We released a new white paper that showcases how locally created recommendations have completely changed the vacation rental industry. We found that local recommendations unite personalization and technology in the vacation rental industry. A full 87% of vacation rental owners said that they want to improve their guidebooks and communication with guests through local recommendations.

In covering the report, Paul Stevens from Short Term Rentalz notes that there is a growing importance of local recommendations in vacation rentals. Download the report and help translate insights from over 77,000 recommendations into action steps for your vacation rental business.

Local STR regulation news out of Hawaii, New Jersey, Texas, and L.A.

Hawaii — Hawaii governor David Ige vetoed last week the vacation rental tax collection bill.

New Jersey — The state Legislature passed a bill to eliminate the 11.6% tax on some short-term vacation rentals.

Texas — Airbnb has started collecting a 7% tax, called the Hotel Occupancy Tax, in Houston. Further, in 2018, Airbnb sent the state of Texas $24 million in tax revenue, as part of the 6% state hotel occupancy tax that Airbnb collects.

Los Angeles — New restrictions have been placed on STRs in Los Angeles, which means only primary residences may be rented out as STRs. See the ordinance here.