Over the past few months we have worked to survey vacation rental property managers across Europe about their operations and industry experiences in 2019. Subsequently we have analysed responses in many topics including growth, distribution, pricing and technology to produce some informative and directive insights in our 2019 European Vacation Rental Report. Here are a couple of sneak peaks…
Several findings this year indicate that vacation rental markets are being consolidated by growing management operations. First, property managers are getting larger; on average, 2018 respondents managed 61 properties, but this has risen to 324 in 2019.
Indeed, our survey grouping of the largest property managers – those with over 100 units – average a huge 1180 properties, up from just 244 in the 2018 report. The largest property managers are growing faster too: average inventory growth was reported at 39% this year, while our largest (100+) property managers experienced a larger growth of 47%, and average booking revenue similarly grew 15% more for large property managers than for their smaller counterparts. The significant proportion of these large property managers were founded in 2015 or thereafter, and their notable increase in numbers and their growth advantage is characterised by a number of differences highlighted in our analysis.
Likely due to greater resources, large property managers were able to drive more ‘commission-free’ direct bookings than those managing fewer properties; further, 76% of these large property managers expected to increase their marketing spending compared to 53% of smaller property managers.
Meanwhile, revenue management strategies also appear more evolved, with respondents managing more than 50 properties more than twice as likely to update their prices daily than smaller property managers, who were most likely to update quarterly. Additionally, a greater proportion of large property managers spend on market intelligence, with 11% spending more than 10,000 Euros annually.
Technology adoption was likewise stronger amongst large property managers, who displayed significantly more use of property management systems and channel managers. Generally speaking, we also found large property managers to be more likely to outsource services such as cleaning.
Another observation of note; surveyed property managers have indicated a tremendous increase in the adoption of technology within the vacation rental space in 2019. We are witnessing a vast growth in the interest and use of revenue management strategies.
The proportion of property managers buying marketing intelligence data has risen noticeably from 13% to 62% over the last year, while the percentage of respondents updating their prices daily has also increased by 17%. Of the technologies surveyed, we found that the adoption of channel managers, property management systems, keyless entry, smart homes, operations, and guest management systems have all increased from 2018 to 2019.
However, despite the increase in both the frequency of rate updates and spending on data, 63% of respondents do not use pricing tools and 66% still manually monitor competitors as opposed to sourcing professional marketing intelligence. This suggests that there is still room for these trends in technology adoption and revenue management advancement to continue. There is certainly an appetite for these services, with 70% of property managers believing that more technology would help them lower their costs, and over half feeling that costs are rising faster than revenue.
Overall, it appears that large property managers are expanding and consolidating short-term rental markets and are also better-capitalising on the rising wave of technological advancements facilitating property management services. We’re excited to see how these trends develop over the coming year – we will await our 2020 survey!
Many more exciting insights await in our European Vacation Rental Report 2019, which we invite you to purchase here:
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