Europe: Transparent has revealed its findings from the responses of over 500 European property managers between April and August in the European Vacation Rental Survey 2018.
Its purpose was to provide a breakdown of all the activity of property management in Europe.
The report was co-authored by the Spanish-based specialised data intelligence company for the alternative accommodation market, Transparent, and Simon Lehmann, who is the CEO and co-founder of AJL Consulting, a boutique consulting firm in the online travel technology space.
Key Takeaways:
• Vacation rentals: One industry, two markets
The vacation rental industry comprises two distinct markets, urban and leisure, with different dynamics and opportunities.
The survey found that the urban markets are younger (six years vs. 12 years), faster growing (33 per cent vs. eight per cent growth rate), more likely to employ a fixed rent model (15 per cent vs. eight per cent), and more reliant on the major channels for bookings (83 per cent vs 57 per cent). As such, Urban and Leisure markets are to be considered separately when benchmarking and evaluating market or investment opportunities.
The study breaks down business models, channel distribution and growth rates by market type, country, and PM size to help readers understand the dynamics of their markets of interest.
• Technology-enabled disciplines – revenue management, distribution, connected home – are what separate large from small property managers
Although technology-enabled disciplines can drive property management (PM) performance, adoption varies widely. Larger PMs tend to use more technology than smaller PMs: for example, each size cohort of PMs has greater usage of PMSs and channel managers than the cohort below it.
The study also found the highest adoption of daily pricing updates (33 per cent vs. 18 per cent of all other) and data purchasing (30 per cent vs. 11 per cent of all other) in the largest cohort. Adoption is significant because these technology-based disciplines have the potential to drive performance on a per-listing basis and the study provides adoption rates for seven key technologies in total.
In contrast, operational disciplines, such as cleaning, maintenance, or key handling, showed limited efficiency gains with scale. The largest PMs employ just as many staff per listing mid-sized property managers.
The largest PMs are able to best leverage data and technology-enabled practices and they have shown the highest growth rates in our data.
• Distribution is a two-horse race; can anything change these dynamics?
PMs rely on third party distribution to fill their listings, and the leading two platforms control 60 per cent. While PMs plan substantial increases in their marketing spend – particularly among the largest PMs – it is an open question about what, if anything, will change these dynamics.
The study looks at the current channel mix by country, PM size, and market type to understand where the distribution market remains the most in flux.
• How will regulations impact the sector?
It is inevitable that as the industry matures, some regulation will be placed on the sector though the extent is not yet known. PMs seem to recognise this given that 88 per cent of those surveyed deemed adhering to regulations to be important or very important.
However, regulations are also a major source of uncertainty for property managers with more than 65 per cent of them expressing concerns that new regulations would harm their businesses.
Those who want to read the report in full can purchase it online at https://vr-18-survey.seetransparent.com/
