What a year 2022 was for the Seattle short term rental market. It’s had its ups and downs like any other but what made it different than most is how quickly things changed. We kicked off the year with Omicron flight cancellations and low spirits, but then everything turned around faster than most of us anticipated. From a short-term rental perspective, it went from bad to worse to really good. In January and February hardly anyone was traveling, and nightly rates were at their bottom. Fast forward just a couple months later, and things in the STR world felt completely normal again. With so much inventory disappearing from the market during the core pandemic years, by the time May rolled around things became better than ever. The short-term rental market is one that is heavily dictated by supply / demand trends, and with supply so low, nightly rates over the summer were as strong as ever. Looking forward to 2023, there are some key trends happening in the marketplace that everyone should know about.
The Introduction of the Luxury Hotel Client
As the popularity of Airbnb, VRBO, and similar platforms grew throughout the 2010s, we witnessed the mass adoption of the mainstream of these platforms. The value proposition was simple. Enjoy more space, privacy, home amenities and comfort than a hotel at a competitive price. Consequently, we’ve witnessed the growth of the industry in exponential fashion throughout the last decade as these furnished home rentals have quickly become the lodging option of choice for many travelers. Yet there has always been a segment of the travelers who never saw themselves booking an Airbnb over the four star and five-star hotels they’ve become accustomed to. The reason comes down to consistency. They know exactly what they are getting at the Ritz or St. Regis and with an Airbnb it’s dependent on an individual host to put on a hospitality performance that resembles the world class hotels that they’ve become fond of over the years.
The 2020’s have seen an emergence of the luxury furnished rental space and professional management of these short-term rentals that successfully emulates the five stay hotel experience. As such, that segment of travelers that would previously never have thought about staying at a furnished home or condo has warmed up to the idea and started the adoption process.
For Hosts looking to attract these price insensitive, often mature guests, it really comes down to set up and presentation. How the home is designed, the convenience of the experience, how fully equipped it is, and the professional management all play a part in success.
The Rise of the Mid-Length Stay
The Seattle vacation rental market has historically been a tale of two types of stay – a very short and a very long one. Of course, being in a corporate hub, short conference stays have been quite common even before the pandemic. In terms of leisure travel, the typical Seattle family vacation outside the holidays might have involved a Thursday night landing and a Monday morning departure. Vacationers would take a couple of days off from the office to spend three full days and four nights getting the most out of everything the Seattle area offers. On the other side of the spectrum, there was the classic corporate relocation that would often last multiple months or even half a year.
With the rise of work from home becoming more of a cultural fabric than a pandemic trend, there is unprecedented growing demand for 7-21 day stays. Many people are viewing ‘work from home’ as ‘work from anywhere” and so what used to be a vacation is now an extended trip that mixes pleasure with productivity. The implication is that short term rentals in Seattle that traditionally targeted short vacation stays need to be equipped for “mid-length short term rentals” more than ever. Multiple laptop friendly workstations, kitchens fully equipped for cooking, high-end laundry facilities, and a furnishing set up that feels more like an executive home compared to a vacation home are key success factors in 2023.
Conferences and Business Travel
It was only a few years ago Airbnb was thought of as a place you go to book a vacation. Things have changed quickly, and more companies are deciding to book business travel with short term rental platforms for many reasons and every day it seems to resemble more of a long-term trend. The implication is that short term rental hosts can generate repeat business by catering a high-quality service to corporate clientele. Business travelers are professional, punctual, and often have great communication. They are always working when they travel for business so rarely are they at home, which also reduces overall wear and tear that comes with any type of short or long-term tenancy. When setting up a place with Airbnb in mind, hosts should think about the business traveler as much as they are thinking about the vacationer.
So, there you have it, 2023 will be a great year and there is a lot to look forward to. Like in any business, following the trends and adapting to it will lead to short and long-term success.