US: More than 2,500 short-term / vacation rental industry professionals from around the world gathered at Disney’s Coronado Springs Resort in Orlando to attend the latest annual edition of the VRMA International Conference, providing the opportunity to discuss the latest topical issues, challenges and opportunities facing the sector.
The 2023 VRMA International Conference also featured 60+ educational sessions covering the latest industry trends and insights and over 100 industry-leading suppliers in the exhibitor hall, following on from a record attendance at last year’s edition in Las Vegas.
STRz was represented at the conference by editor Paul Stevens and head of growth, Jordan Ashford, fresh from the successful launch of the inaugural STRz Summit in London a couple of days before.
I was excited to moderate a session on ‘Gaining a global perspective’ alongside Melanie Brown [Key Data], Jacobie Olin [C2G Advisors] and Matt Varabkanich [Cleveland Research].
To kick off, Brown presented a vacation rental property performance overview of both the US and European markets, which led into a discussion about the micro / macro outlook for the vacation rental sector. While Varabkanich commented on how the short-term rental market mirrored the US airline market in terms of demand and pricing due to the strength of the US dollar, Brown delved into the outlook for Canada and Mexico and spoke about Key Data’s partnership with Amadeus that was announced at the start of the year.
The conversation then progressed to addressing the key trends that property managers are talking about at the moment, as each panellist provided their personal perspective:
- Acquisitions and consolidation of the market will continue to take place, balancing both supply and demand
- In particular, software / property management / legacy companies will become consolidated at the top, leaving sustained fragmentation at the bottom of the ladder as new entrepreneurs continue to enter the space
- Investors and buyers [the investment community] will look at between three and seven KPIs or margins before making important investment decisions, such as staffing margins, marketing margins and employees per unit
- Airbnb is bringing prices down to find an equilibrium between supply and demand – OTA strategies are changing as leisure demand shifts
- As international inbound and outbound travel recovers, airlines are adding capacity again and rerouting routes for permanent travel demand
- Spending trends are recovering to pre-pandemic levels
- The Vrbo platform is increasingly migrating into Expedia, although there are still issues with web traffic and converting for app purposes
- The amount of nights per reservation / length of stay is shortening overall
- Professional property manager inventory is shifting as we see more churn between operators
- There is still a healthy amount of supply out there but the demographic of buyers has changed
As the session drew to a close, each panellist was asked about the prospects they were predicting for the market ahead into 2024.
Varabkanich suggested that, as people finalise their budgets for the year ahead, the short-term rental sector will continue growing at a stronger rate than the hotel segment, even though the growth is not as strong as it was pre-Covid, and short-term rentals now account for one in five [20 per cent] of all lodging stays in the United States.
Brown hinted that pet-friendly stays will not be as hot in 2024 and companies such as Key Data will be keeping their eyes on helpful indicators that will allow them to continue predicting the path of the sector.
Olin predicted that venture capital will continue to pour into the short-term rental industry over the next 12 months but that SaaS-[software-as-a-service]-high business models will continue the trend of getting “obliterated” after going public, as a series of firms have struggled since debuting on the public markets via initial public offerings [IPOs] or SPAC [special purpose acquisition company] mergers in recent years.
Elsewhere, major topics to be covered in general and breakout sessions included ‘Building, marketing and profiting from more sustainable properties’, ‘Balancing growth, M&A and profitability in a time of economic headwinds’ and ‘The future of vacation rentals’, as well as discussions around everything from AI to advocacy, data and revenue management.
Meanwhile, a notable speaker was David Pavelko, global travel business development at Google, as the company announced that it was introducing price comparisons as part of its holiday / vacation rental search experience, building on its existing offering for hotels and flights.
Stay tuned for video interviews with Track, Hostaway and bnbfinder to be released very soon, and contact us at email@example.com and firstname.lastname@example.org if you would like to connect after the 2023 VRMA International Conference.