By Karen O’Neill
As Malcolm Gladwell points out, “Look at the world around you. It may seem like an immovable, implacable place. It is not. With the slightest push—in just the right place—it can be tipped.” This rings especially true for the vacation rental and timeshare market which simply isn’t what it used to be.
With the emergence of the sharing economy came the subsequent digitization of rental processes and later, the creation of the original vacation rental listing site, VRBO, in the late 90s. Fast forward to today, and the digital rental marketplace is not only alive and well — but utterly transformed. Airbnb and HomeAway have since emerged as key industry disruptors, redefining prospective guest expectations relating to the online rental process, as well as the concept of memorable, niche accommodations.
Today, it is estimated that 1 in 3 travelers currently choose to stay in a private rental when on vacation – and growth is showing no signs of slowing down, with the projected market value estimated to increase to $194 billion by 2021. Experts predict that the segment is growing two to four times as fast as the global economy. Airbnb, specifically, boasts a 150 million user base that includes over 3 million hosts, and the newly coined “Super Host” designation for aspiring, short-term property managers.
Luxury rental sites OneFineStay, HostNFly and Luxury Retreats have raised record-setting funding rounds. Vacasa closed a $64 million Series B last year, while Evolve Vacation Rental raised an $80 million Series D. Wyndham’s European Vacation Rental business was sold off to a private equity firm for $1.3B in February 2018.
In many ways, the rise of alternative accommodations has not only disrupted the hospitality industry — it has created an entirely new ecosystem, breathing life into a once stagnant travel segment with modernized possibilities.
Shifting to an Experienced-Based Model
The term “experience economy” is the concept of consumers spending money on experiences rather than material possessions is particularly relevant to the travel and tourism industry. Hyatt Hotels has added the ability to book custom experiences through its new World of Hyatt loyalty program. Members can now use points to book an AFAR Experience. Viator curates experiences with over 120,000 bookable activities on their site. However, beyond activities, travelers are turning to alternative accommodations and vacation rentals for their getaways, allowing them to live like a local.
With this in mind, the operational and lodging side of vacation rentals is steadily shifting to meet evolving demands and needs, and it’s undeniably an exciting time for owners of rental properties and timeshares. That is, if you understand how to capitalize on it and, in turn, contend with the likes of Airbnb. While Airbnb may have forged the way to a newly popularized rental marketplace, professionally managed properties are quickly rising to the occasion. As vacation rentals become increasingly dominant, property managers have an opportunity to evolve their strategies to effectively scale and more effectively manage their properties with the help of new technology.
The Time for New Tech is Now
We’ve identified the demand for innovative technology that can act as a catalyst to the vacation rental and timeshare market. However, what does that innovation look like? What do property managers and timeshare operators need to run their business while meeting the needs of their renters?
Well, let’s first take a cue from some of the critical technological shifts that have taken place for hotels in the past decade. First, we witnessed the increasing interest in ‘smart rooms’ — hotel rooms equipped with modern, digital amenities that cater to a more personalized environment. Hotels around the globe are outfitting their rooms with smart devices such as voice-activated assistants, complimentary iPads to control room settings, Netflix and Smart TVs, and so much more. In the case of vacation rentals and timeshares, we realize a similar demand. Owners and property managers are equipping their properties with smart controllers (such as Amazon Alexa) which allow guests to order groceries, rental supplies, on-demand programming, and more. Even further, properties are frequently outfitted with smart locks and home automation, as well as HVAC and noise control, providing the owner with enhanced peace of mind.
However, all these conveniences need to be supported by continued maintenance and tracking. Now it is time for the alternative accommodation market to leverage technology on the operational side, much like hoteliers have. New advancements can help previously manual processes to become more efficient, user-friendly, and appealing to the modern renter while delivering efficiencies and cost savings to operations. Technology can streamline anything from check-in and check-out to maintenance requests and guest communications, and even payments.
At Knowcross, we’ve just rolled out KNOW Tenant, a facility management app that caters to the Commercial Office Complex/Vacation Ownership/Timeshare Market space. This intuitive app helps tenants log in requests, maintenance jobs, and complaints (including media files such as photos) directly to the facility’s service management teams, by simply using their mobile phone. KNOW Tenant enables the facility, asset, or property management teams to record this entire process and simplifies the tracking and investigation of the renter’s needs, which enables service requests to be closed in a swift and timely manner. Ultimately, all those processes which once entailed a tedious paper trail of contracts, manual updates, and Excel spreadsheets can finally find a home within a digital platform that advocates for the interests of owners, managers, and renters alike. It is this highly responsive and efficient service model — enhanced by mobile technology — which will set vacation and timeshare properties apart from their competition.
Within an industry so inundated with conversations and technology developments focused namely on advancements for hotels, we’ve reached a tipping point for vacation rentals and timeshares to benefit from an upgrade, wouldn’t you agree?
