Looking Forward: Top Predictions for Short-Term Rentals in 2023
We know that history has a way of repeating itself, so when it comes to predicting what the short-term rental industry will do next, looking at what it’s already done is a great place to start (check out our 2022 recap). However, to get the full picture, we asked our industry experts to give us their short-term rental industry predictions for 2023. Here’s what they said:
What is one thing you expect to see from the short-term rental industry in 2023?
Last-Minute Bookings To Increase
As remote work decreases, the demand for short-term rentals will likely decrease. However, as remote work declines, working from home will become more last minute and as a result, we will see more last minute bookings.
“Working from home will decrease which will decrease demand, but also increase last-minute bookings. (Guests won’t know if they can work from “home” until closer to arrival.)” – Andrew Bate (CEO, Safely)
More International Travel
Expect to see more Americans traveling internationally in 2023. This means that we will likely see an increase in demand for short-term rentals abroad. However, this doesn’t necessarily mean that demand domestically will drop. Travel across the board will likely be up, which means that the demand for short-term rentals will be as well.
“Depending on whether or not there is a recession/continued inflation, I would expect Americans to travel overseas quite a bit in 2023. Pent up demand from the pandemic and even perhaps a sense of life is short – go to the places you want to see.” – Heather Lewitt (Director of Customer Onboarding, Safely)
No Increase In Direct Bookings
Even though we will continue to see a growing demand for short-term rentals, property managers shouldn’t expect that to correlate to an increase in direct bookings. With more guests seeking short-term rentals, property managers will be focusing their attention on the operational side of the business rather than the complicated infrastructure and effort needed to do direct bookings correctly and effectively. Additionally, we are still seeing multiple indicators, such as an increase in last-minute bookings, that tells us that guest behavior is still showing a strong trend towards online travel agencies (OTAs).
“Direct bookings won’t take off for most property managers, because it takes time and effort to build the infrastructure to acquire bookings and guests will have more buying power next year.” – Andrew Bate (CEO, Safely)
Growth Will Be Marginal
Don’t expect the average daily rate to grow as significantly as it has recently. Like so many industries, short-term rentals have seen monumental growth over the past few years. While we don’t expect to see that kind of growth continue at the same rate, we do expect to see slight but significant change over time.
“I do not expect to see the average daily rate (ADR) grow by leaps and bounds as we have seen over the last couple of years. I believe it will be a marginal gain over previous year.” – Jamey King (VP of Travel Partnerships, Safely)
More First-Time Hosts
With the number of first-time hosts on the rise, there will be more short-term rentals available. This increase in inventory will cause a shift in supply and demand, giving the consumer more personalized options when selecting a short-term rental. As a result, property managers may see a decrease in occupancy and pricing.
“We will see more first-time hosts and outside investment into short-term rentals. This will allow professionals to differentiate based on quality, personalization, and hospitality, but will lower occupancy and pricing power.” – Andrew Bate (CEO, Safely)
Short-Term Rental Portfolios To Grow
Since we expect to see an increase in first-time hosts, we should also expect to see homeowners adding more properties to their portfolios shortly after. Additionally, as property managers shift their approach to be more automated, we can expect growth to their portfolios as well.
“I expect to see more homeowners and PMs expand their portfolios. And I see even more of an opportunity for us to get them all.” – Amber Harris (Head of Insurance Claims, Safely)
More Automation Demand
As the short-term rental market becomes increasingly saturated, expect property managers to rely more heavily on automation. This shift will allow for more time to focus on personalization and differentiating themselves among competitors.
“I expect to see more demand for automation as PMs grow and look for ways to differentiate themselves from new entrants. Automation gives them more time to focus on and give a personal touch to their guests and homeowners.” – Lui King (Head of Partnerships, Safely)
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