Short-term rental trends: What our property manager surveys have told us

Year after year, our property manager surveys have provided us with short-term rental trends to guide industry strategy. The goal of these surveys is to create a shared pool of knowledge and experience from the boots on the ground. With the 2023 survey report just around the corner, this article serves to summarise just a few of the key trends uncovered, whilst giving a last opportunity to get involved this year.

The prominent trends discovered are as follows: 

Increased frequency of pricing updates in Oceania, North America, & Europe

Through our surveys, we have received answers on how frequently property managers update their rates and discovered that prices are updated more often than before. 

From our Global Vacation Rental Survey 2022, we received information from participants in five major regions on pricing strategies and examined how there has been a shift since previous years. In the survey, 49% of responding property managers use dynamic pricing. In terms of trends across property manager locations, we see that unlike all other types of technology surveyed, Asia has a relatively low uptake (50%). Our “younger” cohorts in Latin America and Oceania are in fact the biggest proponents of dynamic pricing. Europe sits bottom of the pile with over half of its respondents not currently using dynamic pricing. 

67% of Oceanian property managers in 2022 update their rates daily, and the remaining third do so quarterly–the most start pricing strategy. Rates in North America have shifted, as evident in our report of the North American survey of 2019. In this past survey, the number of property managers who update their rates monthly or less frequently was 58%. In the 2022 survey, the number of months of less frequent updates in North America decreased to 34%. 

Meanwhile, in Europe, revenue management strategies also appear more evolved, with respondents in our Europe Vacation Rental Survey of 2019 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).

Increase in technology adoption

Globally, technology adoption such as channel managers, property management systems (PMS), dynamic pricing, keyless entry and data providers has been further structuring the short-term rental industry. This upward trend has been acknowledged since 2018, specifically in Europe. Of the technologies surveyed, we found that the adoption of these systems had all increased from 2018 to 2019. 

In 2022, channel managers are the most adopted technology by property managers of the technologies we surveyed. Property management systems follow close behind but have a lower proportion of respondents with no plans to uptake; potentially due to internal systems. Dynamic pricing and keyless entry are next, with around half of operators utilizing them, but a larger additional cohort expecting to take up dynamic pricing.

Further, in 2022, by region, Asian property managers are the biggest promoters of PMS. Europe and North America–arguably the two more established vacation rental markets–reported the lowest utilization. Even so, the more despondent property managers  (Europe) only have 19% not currently interested in using a PMS.

Consolidation, especially in urban markets, has been growing in North America. According to our 2019 North American survey, we found that large PMs (100+ listings) had greater operational efficiency and more sophisticated operations than their smaller counterparts. Large PMs also had the greatest pricing sophistication, with more daily pricing updates (27% vs. 17% of all others) and data purchasing (82% vs. 63% of all others). They required fewer employees per property than their peers. And they had been more innovative with their commercial model, deploying fixed rent models with greater frequency. This has undoubtedly carried onto the future, as in our Global 2022 Vacation Rental survey, North America was at the top of the pile with 73% of property managers using this feature. 

Channel manager usage

Pivoting from keyless entry usage, let's discuss channel manager usage. On average, 50% of global PM bookings go through a channel manager, and only 18% of respondents are not using or considering using a channel manager. This is a decreased number from our previous surveys. 

Looking at channel management by global region in 2022  below, a very convincing 100% of Asian respondents replied yes to using channel managers. Latin America and Europe also reported a majority level of uptake, with North America a little behind by 65%. Oceania showed a standout level of uptake again with only half of PMs based there utilizing channel management. 

Rise in reliance on short-term rental data

Lastly, we can see from the global 2022 chart that a significant 42% are not tapping into the benefits of professional external data. Nevertheless, this symbolises a big growth over our European survey three years ago, where only 13% of respondents used a data provider. The trend is further illustrated by the fifth of respondents planning to start using a data provider, and together they highlight the advantage to be gained by being part of the 58%.

According to our 2022 global Vacation Rental Survey, we found a stark trend between booking revenue growth and data adoption growth was 4 times higher for data users. Those spending $10k annually saw a huge 66% growth.

Latin American, North American and Asian property managers have adopted data most significantly.

Overall thoughts on short-term rental industry trends

The variety of surveys conducted and subsequent reports have highlighted certain evolving trends to look out for. Regions like North America, Oceania, and Europe have increased the frequency with which they update their rates. Larger companies are raising their number of properties managed. Technology adoption and spending on data are up. Furthermore, there is a consolidation of other operational efficiency systems in more and more regions. 

We await the updates to these trends into 2023 - how will distribution look? How will pricing updates have changed? And what about operational efficiencies and technology adoption? Stay tuned for upcoming reports to be the first in the know.

Leave a Reply

Your email address will not be published. Required fields are marked *