United States: Vacation home buyers are, for the first time ever, prioritising rental income over personal use in the United States, according to research from Savills and HomeAway.
The Savills World Research survey, which was carried out between February and March this year, surveyed 4,300 property owners who list their vacation homes on HomeAway’s sites spreading across Europe, North America and the rest of the world.
Savills World Research associate director, Paul Tostevin, said: “Global tourism continues to grow, with international tourist arrivals up by seven percent last year to a record 1.3 billion. At the same time, the rapid expansion of online vacation home platforms, such as HomeAway, opens the market to new target groups and makes it much easier for owners to make their properties income-producing.”
The survey’s findings indicate a significant shift in the way homeowners now view their vacation homes, compared to the 1970s. In that decade, 90 per cent of homeowners kept their second home for themselves but that has all changed in the last 10 years.
According to the survey, two thirds of second home owners who lease their properties to travellers say they rent them out for periods of the year in order to cover high ownership costs.
Tostevin said: “In a low interest rate environment, investors are seeking out income generating assets. Today’s second home buyers want properties to work for them financially and they are increasingly looking not just to cover costs but to turn a profit.”
Of those two thirds of vacation home owners who lease their second homes, one third makes enough to cover ownership costs and the remaining third makes a profit on its properties.
The survey puts this shift down to the foundation of online vacation rental sites like HomeAway and Airbnb. As these have become more popular ways of listing vacation rentals, the demand has increased and therefore a formalised market has been established for travellers not wishing to stay in hotels.
As a result, vacation home rentals are becoming a more appealing alternative to traditional hotel accommodation.
Florida and California have been at the heart of this shift with 14% and 7% of the United States’ second homes found in these states respectively
HomeAway Vice President, EMEA Christophe Pingard, said: “Over the past ten years, the online travel industry has changed significantly. Staying in a vacation home has transformed, moving from an alternative way to travel to a preferred way to stay.
“With the rise in the popularity of the category, vacation rentals are not only attracting more travellers, and perhaps most significantly, a new generation of younger travellers accustomed to booking homes over hotels for their trips.”