A luxury vacation rentals market research… at last!

Luxury vacation rentals finally find a spotlight as Luxre step in to analyse and elucidate the market. A sector in their own right, luxury short term rentals are the focus of this quantitative data research and Luxre’s virtual event… Read on!

Photo credit: Iuri Niccolai for Paola Gheis – Luxury Rental Consulting

What are we doing and why?

Imagine working in an industry where a thriving economy exists but everyone thinks it’s niche. You want to know more, you want to study and get training but you can’t find anyone who can teach you what you would like to learn. What would you do?

Having quantitative data on your business sector is important, and is often the most difficult information to obtain. Either roll up your sleeves and invest your time in serious research or contact a company like Transparent and ask for help. Or, a little of both!

My name is Paola Gheis, I am a European consultant specialized in luxury vacation rental and what I have described is part of my story. A few months ago I joined forces with Maurizio Battelli, entrepreneur, marketing expert and a very curious mind too and we founded Luxre – The Luxury Rentals Event. Luxre is an online conference dedicated to owners, investors and professionals of luxury vacation rentals.

Why Luxury Vacation Rentals?

For simplicity, we have have used weekly rental rates ranges to clairfy the definition of luxury, broken down into three luxury levels. These are described in figure 1.1 below (in reality, the exhaustive definition of luxury is also composed of a series of qualitative parameters that we omit for efficiency). This definition represents the basis for selecting our sample of luxury properties.

In this first phase the research focused on the Italian market, our country of origin, which has a vast offer of luxury villas across the national territory. We have estimated that the offering exceeds three thousand homes and as many waiting to enter the luxury rental market. We also estimate that fully operational Italian luxury vacation rentals will have a turnover of around 250 million euros. This is the tip of the iceberg in the entire ecosystem that revolves around high end short term rentals.

To validate and further investigate this data, Transparent’s help was essential. With their data mining and statistical expertise they have helped us to confirm the validity of our pre-research by expanding it to levels of detail that we otherwise could not have achieved.

Transparent has extracted a sample of data from Airbnb, including Airbnb Luxe, considering 2019 for data analysis as it is a more appropriate year to represent the market than 2020. Here are some key findings.

Regional distribution of luxury vacation rentals

The highest concentration of high end Italian rentals is found in Tuscany, followed by the Campania region; home to the famous Amalfi Coast (Positano, Capri, Ischia, Ravello are some of the best known places in the area). Other significant areas include Lombardy for its lakes region (George Clooney’s 2002 purchase of a villa on Lake Como transformed the supply and demand of this beautiful Italian area), Sardinia, Sicily and Puglia.

Luxury vacation rentals’ guest origins

Where do the travellers who rent luxury homes in Italy come from?

Our analysis shows that guests from North Americans lead the way, followed by the British (who we know have a passion for Tuscany and in particular for the sweet rolling hills of Chianti). However, we have also found that the Italians themselves and Germans in addition seem to be significant demographics for this particular market.

Occupancy and growth across luxury vacation rental segments

Transparent has also analyzed the occupancy data which we think should be read together with the supply growth figure from 2018 to 2019.

The luxury and top luxury segments have an occupancy rate of about 40% which compared with the occupancy average for all vacation rentals in Italy (44%) is slightly low. If we consider that between 2018 and 2019, the supply of luxury homes increased by 30% (see below chart); this is a growth figure that is notably higher when contrasted with the growth of Italian vacation rentals generally (25%). 

The supply of specialized training in luxury vacation rentals is virtually non-existent. We believe that an event like LUXRE, dedicated to owners and managers of luxury villas, responds to a real need for professionalization that can help improve performance and in particular occupancy levels.

If you want to learn more…

Paola Gheis is a European consultant specializing in the marketing and communication of Luxury Vacation Rentals. She founded the company that bears her name. Paola created The Villa Italy for a client owner, a brand of exclusive villas between Tuscany, Ischia and Pantelleria, which she now successfully manages. More recently Paola co-founded with Maurizio Battelli,  Luxre-The Luxury Rentals Event, the first online event dedicated exclusively to Luxury Vacation Rentals in Italy.

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