This post was written in collaboration with our partners at AirDNA.
Technology has always played a large role in how property management companies run their day-to-day operations. From listing across multiple booking channels and communicating with potential and existing guests to updating homeowners and providing a top-notch guest experience, short-term rental property managers often rely on assistance from tech tools to get everything done.
While we are starting to see signs of recovery around the world, there is no doubt that COVID-19’s impact on the short-term rental space will have long-lasting effects. Property management companies globally are recognizing now more than ever the critical role that technology plays in meeting guest expectations, pricing strategically and even managing staff.
As hosts begin to expand their tech stacks in light of COVID-19, here are a few ways that property management companies can use technology to not only navigate this period of uncertainty but also prepare for the future.
1. Rethink Your Business Model & Pivot Strategically
COVID-19 has caused many property management companies to adjust their business models and adopt new strategies in order to mitigate revenue loss. In fact, we have already seen short-term rental property managers diversify their portfolios to include extended stays of 28+ days in order to meet the needs of today’s guests, including displaced travelers, those who are self-isolating, healthcare workers who need to stay out of their houses and close to hospitals, businesspeople looking for a quiet place to work from home, or families escaping a crowded city.
If you decide to rent out your properties for mid-term stays, make sure you are using the technology available to you to do so smartly. You’ll want to use a yield management tool to ensure you’re pricing right for longer stays, upgrade your direct booking website to enable you to adjust your offering on your own terms, as well as create new automated message flows and task assignments (i.e. mid-stay cleanings) for your longer-term guests to ensure their experience is customized for an extended stay. Don’t forget to automatically offer a discount of 10% or more to those who book longer stays, as guaranteed income for a longer period of time is key to business stability right now.
2. Forecast the Future & Track Travel’s Path to Normalization
It’s impossible to predict the future, however property management companies can rely on data from tech leaders in the short-term rental space in order to understand where the industry is heading.
According to AirDNA’s COVID-19 Data Center, currently, short-term rental occupancy rates in the United States are approximately equal to the same time last year, at approximately 60%. Data collected by Guesty shows we are starting to see other promising signs of recovery in countries around the world. In June, we saw a 28% increase in new reservations globally compared to May 2020 – with the US and UK leading the way. Italy – one of the hardest-hit countries of COVID-19 – has experienced a 70% increase in new reservations from May to June.
There are also signs of recovery, especially for holiday travel plans across the US. July 4th weekend this year was stronger than in 2019, with a 13% increase in reservations. We expect recovery to continue through Labor Day, where current reservations across major booking channels are almost equal to what they were in 2019. We’re also seeing an improvement in reservations for the winter holidays later this year, as bookings for Thanksgiving, Christmas and New Year’s Eve in our system now, are higher than what we saw at this time last year.
Investing in data will also help you forecast trends that you can use to adjust your business and marketing plans. For example, we know that travelers are increasingly booking domestic stays, as some are wary of taking an overseas vacation or staying in a crowded hotel. With this information in hand, you can use social media or targeted messaging to grab the attention of locals who may be searching for a short-term rental at this time. You can also explore posting on additional booking channels rather than solely listing on global channels — look for those niche sites dedicated to driving region-specific bookings. Websites that specialize in offering London or LA-based rentals will already be doing the SEO work for you.
Using a sophisticated data platform like AirDNA to get the details on everything from occupancy to pricing, keeping up to date on Google Trends to track when search patterns around travel start to normalize and following the Chicago Board Options Exchange (CBOE) Volatility Index (AKA “The Fear Index”) are all key to ensuring your business is always one step ahead of the game.
3. Price Smartly & Drive Bookings
Given what we do know about future reservations and travel patterns, property management companies should be pricing their rentals accordingly. Consider working with a dynamic pricing tool like PriceLabs, one of the many partners in Guesty’s Marketplace, to make price adjustments based on real-time data on supply and demand within your local market. Since extended stays are on the rise, you can use such a tool to determine the best rates or discounts to offer to maximize your profit.
Considering the dramatic increase in reservations for fall and winter travel according to Guesty’s data, you need to start thinking about how to price stays booked for end-of-year to secure those bookings. While it may be tempting to price high (especially for holiday travel which usually attracts higher rates), lowering your rates for the future now could help you capture early reservations, even with high supply and low demand. With so many considerations to take into account, making the most of revenue management technology will ensure you’re pricing optimally.
More Resources on COVID-19
There’s no doubt that travel will be transformed by COVID-19, which has already altered social habits, prompted new policies and changed guest expectations. While there is still a degree of uncertainty about the future, one thing is certain: even though it might look different than before, travel will begin again and short-term rentals will regain occupancy.
For more resources to help property management companies navigate coronavirus, visit Guesty’s Coronavirus Infocenter or download our latest, insight-packed guide with tips from property management companies across the globe.