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Residential Real Estate
Feb 3, 2022

External Influences Transform The Short-Term Rental Industry

Sponsored Content provided by Mike Harrington - CEO & Owner, Carolina Retreats

Part I – How Times Have Changed

It used to be that a clean rental with included linens, enough dishes, and a TV was enough. A few books and/or games was a welcomed extra, but not expected.
 
But that was a long time ago.
 
The short-term rental (STR) industry has gone through major transformations and many factors have contributed to this trend. In fact, the factors are so vast, that we published into three parts – external influences, guest expectations, and design.


The First Transformation of the STR Industry

The first transformation happened as a transition from being a sort of “cottage” (no pun intended) industry to becoming more mainstream. This happened around the time the online travel agency platforms (OTAs), such as Vrbo, Airbnb, HomeAway, etc. began to proliferate.

 
That was the “first wave” of the up-leveling of STR homes. Individuals, groups, and families that decided to give a STR a try wanted the familiar experience of hotel and/or resort stays. This included small and sometimes significant luxuries like bathroom toiletries, upgraded linens and bedding, multiple TVs with cable, game rooms, fireplaces, and even pools and hot tubs.
 
As different types of amenities became available…home theaters, WiFi, smart home systems, just to name a few…the list of expectations grew for potential guests.
 
Many owners were happy to supply these amenities because it meant more bookings and greater revenue.
 
The short-term rental industry was a success.  Things went along happily like this for several years.  And then…Covid.  Covid turned our industry upside down and backward. 


The Second Transformation of the STR Industry 

Guests canceled reservations by the thousands. Some of the OTAs stopped paying their vendors in the STR companies. We saw colleagues wiped out financially. Some businesses didn’t survive. We also saw many STR companies pivot to other business structures, such as long-term rentals, just to stay afloat.

The beginning of the pandemic was at once terrifying and heartbreaking for our industry, as it was for many others.
 
Then, little by little, business started getting better. After the shockwave of the lockdown eased, people were eager to start traveling again. But they were frightened and ultra-cautious. They wanted as little interaction with the world outside their little bubbles as possible.  And, just like that, STRs became the safest option for travel lodging.


The Rise of the Work-From-Home Guest 

This heralded the second major transformation. Guests were no longer traveling simply for pleasure. One of the more interesting byproducts of the lockdown was the explosion of work-from-home employees.
 
These folks soon realized that they were no longer tethered to a specific location. If they had WiFi, and reliable internet access, they could work from anywhere. And so many did.
 
Vacation travelers, business travelers or professionals working from home…our industry has evolved, sometimes predictably…sometimes not. Short Term Rentals are here to stay, fulfilling a demand that benefits property owners and travelers equally. The cottage industry has grown into an important economic engine in society today. Times have changed.
 
Our industry and the world around us have evolved and we see patterns in the amenities that a majority of guests now expect. The bottom line is that short-term rentals must be equipped to serve both “work from homers” and pleasure-seeking vacationers. Amenities are the key to that trend.
 
Part II of these trends will go into the detail of these amenities that range from WiFi to décor.
 
Mike Harrington is the CEO & Owner of Carolina Retreats, a specialty lodging and vacation rental management firm serving more than 300 vacation property owners throughout the Cape Fear region. Before founding Carolina Retreats in 2015, Mike spent 10 years on the Outer Banks as CEO and General Manager of Resort Realty, a high end real estate sales and vacation rental company with 600 properties under management, five offices, and more than 100 full-time employees and real estate agents. Mike is a Past-President and Board Member of the Vacation Rental Manager's Association (VRMA), the largest international trade association for the vacation rental industry, as well as Past-President for the North Carolina Vacation Rental Manager's Association (NCVRMA). He is frequently asked to speak at seminars and trade conferences on the latest vacation rental management trends in marketing, operations, and strategy. Mike holds a MBA from East Carolina University, as well as a Bachelor's Degree in Business Management and serves as an Advisory Board member for East Carolina's School of Hospitality Leadership. 
 

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